A Strategic Approach for Creative Product Development

Question 3

Henry Chesbrough coined the term ‘open innovation’. What does he mean by ‘open innovation’ and in what type of business did he first observe this practice?

Henry Chesbrough has created the theory of open innovation where the main focus is to analyse external ideas and technologies for better performance. Open innovation creates a network with the stakeholders of the business and develop creative technological base for running the business activities strategically. As per the Henry Chesbrough open innovation model, the major focus of the business is on the creative product development and ensures technological innovation. Through developing creative products and utilising the latest technology, including software, ICT and other IT framework are effective to enhance business innovation and serve the customers in a unique way. Henry Chesbrough focuses on the engaging the external stakeholders for analysing the market structure and gathering more information for open innovation so that the corporate leaders can ensure high tech and this open innovation has crucial impacts on the consumer electronics industry across the globe, for example, IBM, Intel and AT&T and Xerox are efficient to manage open innovation and develop new technology and consumer electronics product with technical innovation and creativity. Traditionally, the organisations conduct own research and development which is known for closed innovation where they try to enhance corporate innovation as per their analysis and evaluation about he market. There is lack of involvement of the external stakeholders where the companies try to strictly keep developed Intellectual Property (IP) to protect own innovation out of the external reach. In such situation, there are slow innovation pace, limited market share and larger risk of the companies during new innovative process as well as lengthy process of resource allocation, high level of patent cost, internal management of research and development and large investment, which have adverse impacts on the organisational operational activities. Recently for example, the corporate firms like Coca-Cola also choose open innovation process for better innovation management.

The new concept of open innovation is effective for the business firms to enhance innovative process and activities where there is free flow of information and the organisations also encourage the external stakeholders to be engaged with the company and exchange information and latest technological solutions for improving the business uniqueness to be innovative and technically advanced. Open innovation is hereby beneficial to engage all the stakeholders including business partners, shareholders, suppliers and distributors, producers and management, as well as public institutions, government and customers, who can share important information and data successfully. There are also effective management of IP and copyright where the organisation can protect own innovation and creativity in developing their products ad services. The other business firms can acknowledge latest innovation and design own process for creative product development. As per the figure above, the closed innovation was utilised traditionally, where the corporations limits their innovation with internal research and development and utilising own organisational resources. Open innovation in this regard provides a scope to enhance external business activities, grab new knowledge and technological solutions to design own organisational products and services. For example, the electronic company Apple is considered as great innovative company for launching creative electronics products and services for the benefits of the customers, where agile technology, creative design of the products, good features and latest software design are helpful to serve the consumers uniquely.

Hence, the open innovation model is beneficial for the business to share the information about latest innovation and technological advancement, where open research and developmental activities, communication with external stakeholders and investment opportunities create suitable business path for the organisations. The organisations can reduce the cost of the latest innovation and adopt agile technology to represent the brand in the global industry. The organisations like Apple, IBM, Intel and AT&T and Xerox are successful to gain high competitive advantage in the market and secure future sustainable growth by retaining the long run customers. Through open innovation, it is also possible for the companies to enhance sales volume and profitability in long run where the business representatives can develop efficient customer service to satisfy the clients across the international markets. Open innovation is considered as high speed innovative process with latest IT framework and agile technology which further ensure that the organisations would be successful to conduct new product development and market expansion to fulfil the brand aim of securing future sustainable development.

Question 5

How useful do you think patents are in protecting innovations from imitation?

It is necessary for the multinational corporations to protect own innovation and creativity in designing the products and services and in this regard for registering own innovative practices of the business, there are Intellectual Property (IPs) known as the Intellectual Property Rights (IPRs) to maintain the brand creativity and innovation. The organisations must register in IPR for maintain own creativity and innovation and the elements of the patent within the intellectual property rights will be explained efficiently. Social bargain in this regard encourage innovation by maintaining balance between public interest and private benefits and in this regard to protect own innovation and business creativity, there is monopoly rights of the organisation, having patent rights. novelty, inventive step and industrial application are necessary to be maintained under patent rights as well as there is requirement of adequate funding for the organisations to enhance innovation and creativity to ensure that the organisation utilise patent rights for avoiding imitation. Through patent laws and legislations, the companies like Apple, Microsoft and other open innovative companies try to maintain their authenticity in product and service design. It is also possible for the organisations to protect own invention even under open innovation process where they are successful in handling their international operations safely and protect own products and services through patent laws, IP and copyright principles.

The individual or company utilise the patents for holding the right to prevent others from selling, making and retailing the products of the organisation or importing the technology. The organisations also have the licensing to conduct the business ethically and protect own invention under national IP laws. A patent can last up to 20 years and it remained valid. PCT – The International Patent System is hereby effective to get grant by the government authority and there are legal effects in the country, where the organisations can runt heir innovative process safely. It is advantageous for the organisations for holding the national patent application as well as the user’s benefits from a common set of rules and regulations which are effective for the organisations to run their business activities safely. Copyright is necessary for protecting artistic expressions like music, photos, artwork, company logo and work of architecture which are effective for the organisations to manage own creativity. The design rights are also necessary to protect the products and services created by the organisations. Trademarks provide a scope to the business firms to distinguish the products and services of open enterprise to another and it is beneficial to conduct international trade safely so that the consumers can identify the products of the particular brand in the international markets. The average time for processing a patent is three and half years in the UK and seven years in the European Patent Office and the patent are valid up to twenty years. Hence, the patent law and rules are effective to protect the company’s innovation and creativity ion product development and service design.

The Patents Act, 1977 is hereby effectively executed in the organisation for better managerial practice and the organisations apply for patent and copyright to maintain authenticity of the organisational products and services. Patent protection is easier to enforce in the company, and the advantages are it has greater recognized value, protecting disclose inventions and protect the organisational practice and innovation of product and service development. The major disadvantage of patent is high cost, disclosing inventions and limited term. The organisations must focus on patent and copyright principals in order to compete with other competitive business firms in the market where the patent laws are effective for the company to maintain authenticity of their products and services. It is considered as revenue stream from licensing and the organisation can have the access to others technology via cross licensing. It further demonstrates the viability and value to the investors where the organisations have the ability to collect thee damages via litigation. Hence, through the patent laws and legislations, the organisations can maintain ownership of the innovative design of their products and services. It is possible to avoid imitations in such an intense competitive market where the organisations are able to manage their operational excellence to serve the consumers with latest innovative products and services.

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