Problem Statement. This Paper Studies The Correlation Between

854 WordsMar 8, 20174 Pages
Problem Statement This Paper studies the correlation between competitiveness in various industries to the degree and type of innovation model (closed or open) used in those industries. Background Firms today are continually faced with the task of achieving a competitive advantage over competitors. A rapidly changing business environment creates numerous challenges for firms to stay above the opposition. An integral part of a competitive strategy is innovation. Competition creates strong rivalry between competitors which forces firms to continuously evolve and innovate to keep market share and competitive edge. Firms that do not aggressively and continuously improve products and production methods will fall to innovative firms…show more content…
This study will research and analyze the existing literature on closed and open innovation models to determine the effect each has on competition. Conceptual Framework Open and closed innovation models can be used to explain the ways in which firms bring changes to products or services and/or new products and services to market. Essentially, open and closed innovation models determine how a firm introduces new technology to consumers. By studying both models and the impact both models have on the competitive advantage of various firms, one can determine which model to incorporate into a firm’s competitive strategy. A closed innovation model is defined as “the situation where companies generate, develop, and commercialize their own ideas, innovations, or technological breakthroughs” (Salvatore, 2015, p. 730). A closed innovation model acts as a catalyst for innovation. Firms that use a closed innovation model often set a precedent for other firms, especially if the products or services are successful within the market. A closed innovation model focuses on consumer needs and customer feedback to determine a competitive innovation strategy. In addition, a closed innovation model does not involve licensing agreements, joint ventures, and other arrangements between firms as in an open innovation model (Salvatore, 2015). Therefore, there is minimal chance of conflict because innovation occurs internally within the firm. However,
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