QUESTION: Applying the moves and competition

What are the main factors that would affect a company competitively?

For example, let's say Company A chooses to spin off a new project to former employees who form a new company, Company B. Since Company B management would have inside knowledge of Company A and potentially be able to exploit this knowledge to their advantage, Company A would do well to understand fully it's own core competencies in relation to potential future threats from the new competitor.

I think that in terms of competition, each move could make the company gain a first mover advantage, especially move 2 in which you let others develop your non-strategic initiatives...above all if you bring the technology back inside afterwards

taniapaola_gutierrez wrote:When a company decides to apply inside-out open innovation strategies and as a result has the creation of new suppliers, a new company or new technologies, which are some of the main factors that will affect the company in terms of competition, is it worth to apply the moves or would that be a threat to the company´s profits and market position?

"By breaking down traditional corporate boundaries, open innovation allows intellectual property, ideas, and people to flow freely both into and out of an organization". inside out open innovation can save much of the time and money being invested in new projects, i don't think it can be a threat for the company in applying moves because they can benefit from new innovative knowledge without spending huge amount in R&D

I think the company needs to carefully handle the process of inside-out moves, because once the wall has been turned down, the company might share its IP or resources with its former competitors. Without careful caculation, perhaps the strategy benefits the other parties rather than the company itself.

With an inside-out move resulting to the creation of a new companies, one of the risk could be human.
The new company resulting by the move are often managed by former high managers of the creator, with a lot of strategic knowledge about their former employer.
Without appropriate non-competition contracts - and even with, in the long term - it could be really risky.

In continuation to what Shirley said, it's important for the comapny to distinguish between the core competencies and IPs that unused or projects that don't fit the firm's strategic strengths. By doing so the company could choose more carefully which projects to move outside the company without creating a competitive threat, and which activities or knowledge are too close to the core and should therefore stay inside the company.

I agree it can be a huge R&D cost saving for the company to apply inside-out open innovation. But I think it has to be done carefully, using some non-competition contracts - as Felix said. An other issue is your company might use the employees who were meant to work on the concerned projects and innovations.
It might be necessary for the company to find a way to analyse if the returns from applying open innovation is going to be higher than if it is done by itself.
And regarding the customers and depending on the products the company is selling, it might be better to do it by itself, to avoid some important issues such as quality problems...

I do not agree wth everybody saying that the only innovation one company can share is based on the second core competencies.
Sometimes, and it has been the case in the car industry and tire industry, some companies will share some innovation with competitors to get some new innovation from them as well. It is also possible to share a part of its core competency as long as it is not the major advantage of a company. Of course, this can't always be done, and management teams have to think really carefully about it.

I think that we also should consider the innovation-friendy environnement: European Comission for example, is concerned about the impact of the competition law. It can be considered as a threat because it will change the market position,, the company's profits and the degree of the innovation activities as well if it's really difficult to enter the market.

In terms of the threat of competition as a result of the creation of a new company, or from processes that you have offloaded to other market players, it is unlikely that you will face unexpected competition causing problems. This is due to the fact that from day 1 you have had decisive control over which processes you have taken out and given to others. You will certainly carefully consider which activities could potentially become a threat once you go 'open', and act accordingly.

Is it worth to apply the moves or would that be a threat to the company´s profits and market position?

It depends on the degree of the threat. Smaller, tactical threats may foster competition and not have any impact on the overall strategic market positioning of the firm. In this case, it is worth using Inside-out open innovation moves.

Sharing information is always a threat if the company doesn't know how to manage it, but using the inside-out innovative moves the company actually could improve its positiong.
Of course, like many of you already said, before to make a move is necessary to evaluate very carefully the advantages or disadvantages of implementing an inside-out open innovation.
I think all the moves said on the reading we are stuying are focused in how to improve the company's competitiveness, specially thinking in the limited resources a company has for implementing its projects.

the innovation-friendy environnement: European Comission for example, is concerned about the impact of the competition law.

Hi Kathia, could you elaborate more about the aspects of the competition law? How EC create a innovation-friendly environment?

I agree with what most of you said. I think that of course there are threats that exist, but in the end, these open innovation options could earn profits for little to no work. So, in a downturn economy, when they money isn't there for R&D, licensing your IP (for ex) is definitely something to consider.

By applying some moves and opening the company to other partners at the moment of sharing information will be risky, but it depends how this is managed. It can be a total thread or benefit for the company depending on the core competencies of the company. Is very important to define if the company is ready to open itself to share its knowledge and projects with other partners and evaluate if it will be a benefit or a loose. I think the most important fact is to evaluate if the company has enough strenghts not to be affected by competition and take advantage of applying the moves.