2. WHY COMPANIES SHOULD HAVE OPEN
BUSINESS MODELS (AND WHY SHOULDN’T),
5 SPECIFIC EXAMPLES
“Why companies should have open business models”, H. Chesbrough
3. Lego:
how a company can combine different
approaches in order to get external ideas
and input into their innovation process.
revisit its innovation policy and its relationship
with their users, including turning to open
innovation and crowdsourcing
“Bringing open innovation to services”, H. Chesbrough
4. Lego:
- 1998 experienced the first loss in its history
- 2003 recorded a historic loss of 188 million
replacing the number one priority “taking care of children” with
“making money for the company”.
• relocation, removal of variations on the LEGO people
• removal of a significant number of activities they had
developed over the years but that did not correspond to the
core-business
• Stop diversification, the group now focuses on profitability and
competitiveness.
“Bringing open innovation to services”, H. Chesbrough
5. Open innovation and crowdsourcing
• Stop fighting the hackers that made
unauthorized modification
• Start to benefit from crowd sourcing
“Bringing open innovation to services”, H. Chesbrough
6. Xerox and PARC:
The ability of rescue “false negatives”
PARC : developing computer hardware and
software technologies
Ethernet and
Graphical Users Interface
not promising
inside Xerox
commercialized by
Microsoft and Apple
e.g.
“The era of Open Innovation”, H. Chesbrough
7. http://archive.icommons.org/articles/cafune-breaking-
the-limits-for-open-business-models
Open business model in movie
distribution: an example
• Bruno Vianna released his first full-length
feature film, Cafune (2005). He licensed his film
under a Creative Commons licence.
• in accordance with the distributors (Estao
group), released the film in cinemas and on the
web, with two different endings. The audiences
can create their own finales to the movie.
• This strategy provided more exposure to the
movie than if it had been traditionally released.
• Cafunè made it onto the list of the 20 most-
watched movies in Brazil on certain weeks (Film
B data)
8. http://archive.icommons.org/articles/cafune-breaking-
the-limits-for-open-business-models
Limitations to the approach
• The industry of distributors and producers can impose limitations on the
distribution of open films -> the Director selected a distributor that was making
every effort to discover and develop new distribution formats which are both more
creative and compatible with the market reality; and more attractive and accessible
to the public.
• Cases of films boycotted by exhibitors in the U.S., like Steven Sordenbergh's
"Bubble", which was simultaneously released on cable TV, DVD and in cinema
theatres -> Estao is both a distributor and exhibitor.
Proposes to ensure access to culture while still earning profits
• to make available low-resolution versions of the film, but charge for a better
resolution version
• to involve incentives for the users to participate in a viral network. Spectators
would also become distributors and would participate in the work's income.
Open business model in movie
distribution: an example
9. • Google entered the smartphone industry in 2005 through the
acquisition of Android Inc., a company that built an OS for mobile
phones
• The Nexus One, launched in 2010, was the first physical device
shipped by Google for consumers since the inception of Android.
The device was built by HTC, a device manufacturer, and sold
directly via a web shop by Google
• Android gained the third-largest market share of operating systems
for smartphones in 2010
Open business model:
“A Comparison of Inter-Organizational Business Models of Mobile App Stores: There
is more than Open vs. Closed ”, Roland M. Müller, Bjorn Kijl and Josef K. J. Martens
10. TOYOTA:
Expansion vs Sustainable Development
“Large enterprises disease: "Toyota recall" the deep-seated reasons”
Wen Wei Po, Su Yong
• Toyota is the largest automotive company in the world
• “lean” manufacturing techniques and culture of continuous
improvement were the envy of the business world of Toyota
• The company has been quickly expanding overseas the last
three decades
• In order to facilitate the parts procurement, a large number of
local parts procurement was opened
11. TOYOTA:
Expansion vs Sustainable Development
“Large enterprises disease: "Toyota recall" the deep-seated reasons”
Wen Wei Po, Su Yong
THE PROBLEM OF QUALITY
• The current establishment of global parts supply system had
difficulties to maintain the production philosophy of the company
In 2009, problems with “unintended acceleration” of its cars,
which the firm has only belatedly taken seriously, have
triggered an escalating crisis and the recall of a whopping
8m cars. This exceeded their total sales in 2009 of 6.98
million cars. This decreased Japan’s GDP by 0.12% .
