Open Innovation and Strategy - Focus on Communities

Remember Porter's Five Competitive Forces?

1. Rivalry
2. Buyer power
3. Supplier power
4. Substitutes
5. Barriers to entry

Nowadays, if a company only focuses on them and misses communities, it may be counter-productive.

In the latest CMR article Henry Chesbrough and Melissa Appleyard point out:

"All of the tradional views are based upon ownership and control as the key levers in achieving strategic success. All focus largely within the firm, or within the value chain in which the firm is embedded. Non take much notice of the potential value of external resources that are not owned by the firm in question, but may nonetheless create value for the firm"

To illustrate the difference between Open and Closed Innovation, they differentiate Value capture and Value Creation in a company and in a community:

"The lingering questions for the business strategist are: Who actually is capturing the value created by open invention and coordination? How are they doing it?"

Finally, Chesbrough and Appleyard introduce a new concept, Open strategy.

"Open strategy balances the powerful value creation forces that can be found in creative individuals, innovation communities, and collaborative initiatives with the need to capture value in order to sustain continued participation and support of those initiatives"

After all this, I welcome you to take also a look at Michael Porter's newest work, " The Five Competitive Forces that Shape Strategy" from HBR, January 2008. A miss-match?!?