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Open Innovation for Business Leaders

This document discusses open innovation as a competitive strategy for companies. It begins by explaining how closed innovation models are no longer sufficient in today's environment where ideas and knowledge are shared more openly. It then reviews relevant literature on open innovation and collaborative models of innovation. The literature discusses how competition has changed and favors more open systems where companies can benefit from external knowledge and ideas. The document uses Apple as a case study to show how open innovation strategies helped develop successful products.

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0% found this document useful (0 votes)
154 views20 pages

Open Innovation for Business Leaders

This document discusses open innovation as a competitive strategy for companies. It begins by explaining how closed innovation models are no longer sufficient in today's environment where ideas and knowledge are shared more openly. It then reviews relevant literature on open innovation and collaborative models of innovation. The literature discusses how competition has changed and favors more open systems where companies can benefit from external knowledge and ideas. The document uses Apple as a case study to show how open innovation strategies helped develop successful products.

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ajax980
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Open Innovation as a Competitive Strategy

Abstract In todays age, the pace with which technologies become outdated is rapid as compared to previous eras and organisations have to continuously innovate to stay in business. Innovation, which was initially planned and put into practice in the isolated silos of the R&D labs of big firms, is now moving away from these structures and is being incubated in hubs outside the walls of the traditional firm. This logic of closed innovation models as a means of sustaining a competitive advantage has been increasingly challenged by a new paradigm of open innovation. A host of factors have contributed to changes in the innovation models pursued by companies. This paper looks at the concept of open innovation in detail and how companies can effectively use this model to stay in competition. It will take Apple as a case study, to help understand how an open innovation strategy can help build successful products and subsequently take them to market.

Contents
Introduction Literature Review Theoretical Framework Case Study Apple Analysis Discussion Conclusion

Introduction In a significant paper, Chesbrough (2003) asks a rather simple question, Why is internal R&D no longer the strategic asset it once was?. The R&D labs at one point represented the closed structure of innovation systems pursued by firms. The philosophy that dominated this methodology of closed innovation was that of selfreliance. The investment in knowledge was a private exercise and the fruits of which were fiercely protected by intellectual property regimes. Ideas were generated within the firms and were then subsequently taken to the market as products by the ideaholding firm itself. The leading centres of the commercial application of scientific knowledge were not universities or governments, they were the firms themselves. Competing firms had no option but to invest more in their own research laboratories if they wished to unseat the dominating players in the market. Fig 1 gives an illustration of a closed innovation model.

Fig 1 Closed Innovation Model (Chesbrough, 2003) This model worked for the better part of the 20th century, and was able to foster many innovations that changed the market and brought significant benefits to consumers. However, a cycle of changes in the business environment in the past 30 years have rendered this model as insufficient for companies wishing to remain competitive. In 3

todays market, newcomers with absolutely no R&D investment can draw upon research and knowledge available in the market to challenge the economies of the incumbents. Innovation, no longer has to be incubated and brought to life within the traditional firm. An idea can be generated at one end of the market spectrum and can be successfully translated into a product at the other end. This is the age of open innovation and this paper will attempt to explain how open innovation models have changed the business landscape. It will begin by taking a look at the literature within academic circles which dominate the discussion on open innovation and then proceed to explain its basic tenets as formalised by Chesbrough (2003). It will then use the case study of two successful commercial products launched by the company, Apple, and try to explain how the ideologies of open innovation helped in the development of these products.

Literature Review Cantwell (2004) sets the basis for innovation as a competitive strategy, by arguing that in the modern economy which is very much driven by knowledge and its effective application, innovation is vital in the pursuit of competiveness. Competiveness is marked by the creation of differentiators by firms, either in their products or their processes, which sets them apart from their rivals. Such differentiators can only be created by innovation, and he goes on to state that it is a positive sum game that consists of the efforts of many to develop new fields of value creation. He quotes Nelson (1992) to state that the independence of firms is slowly fading as the market forces them to become more collaborative. This implies that an array of different actors across an industrial sector can participate together in innovation activities. Intercompany interaction has received a renewed focus in relation to its role in fostering innovation and the creation of knowledge. One of the earliest papers discussing the open innovation ideology as a competitive strategy is by Garud and Kumaraswamy (1993). While studying the open systems strategy employed by Sun Microsystems, they try to provide some insight on the changing nature of competition in network industries. Network industries are industries where there exist interrelated markets, such as the computer industry having sub-markets in hardware and software. Changes in one market could affect the interrelated markets as well. They suggest that the motivation for an open culture of knowledge sharing in these industries has in part to do with the desire to build compatible systems. Their study on the strategies employed by Sun Microsystems leads them to state that the dynamics of competition in closed system networks is very different from that in open system networks. In open system networks, companies have to continuously innovate. They quote Macmillan et al. (1985) and state that even though companies share their knowledge with other companies in an open system, they benefit from first-access to the same and therefore enjoy a transient monopoly position. Hippel and Krogh (2003) list the models of innovation that currently exist, one being the private investment model where innovation is inward focussed and the other one being the collective action model where innovation has a broader collective focus. While the private investment model results in products or processes that are 5

privately owned and are protected by strong intellectual property rights, the collective action model results in a collaboration of innovators to produce a public good. They then proceed to use the example of open-source development as a model of private-collective innovation which combines the best traits of both models. They suggest that such a model, as exemplified by open-source development, is capable of addressing the incentive structures that are in place in both models. They leave a few questions open for further research such as what are the incentives that will encourage private firms to engage in a collective action model and what is the role for leadership and management in a private-collective model. Porter (1980), in an article published in 1980, provides support for the closed innovation paradigm when he recommends the setting up of entry barriers by companies as a competitive strategy. Teece (1984) further explains the rational behind such a strategy when he states that the economic rents in the competitive forces framework are monopoly rents. However, in a change in philosophy that is symbolic of the times, Porter (1998) when explaining the emergence of clusters and the changing dynamics of competition in clustered markets states that the opportunities for innovation in such an environment are more visible as companies within a cluster can often find the resources it needs more easily. Suppliers and partners are more collaborative and thereby more connected to each other in the process of innovation. A cluster has a better view of market conditions as knowledge within the cluster is more easily available, which supports a more open and inclusive model. He states that innovation within a cluster can be carried out at a lower cost as it allows for greater collaboration with suppliers and partners. Vertically integrated companies on the other hand will find the innovation process more expensive and fraught with risk as the innovation process is completely in-house. Cohen and Levinthal (1990) define the absorptive capacity of a firm as its ability to assimilate external knowledge, realise its value and apply this knowledge to develop products. They draw a relation between the absorptive capacities of a firm and its subsequent potential to innovate. They claim that the ability to exploit external knowledge is thus a critical component of innovative capabilities. While supporting the existence of the basic functions of an R&D laboratory in firms, they claim that while breakthroughs in research would be available from an open system, an R&D lab 6

that conducts basic research would give them a deeper understanding which would help them exploit external knowledge in a better fashion. Laursen and Salter (2005) add to the work done by Cohen and Levinthal (1990), and in an empirical study of more than 2500 UK manufacturing firms discover that the firms that search for external knowledge more extensively are more innovative. Hargadon (1998) contends that one has to look towards the knowledge brokers to understand the secrets of continuous innovation. Knowledge brokers are firms that engage themselves in diverse markets and differing technological platforms and innovate by transferring knowledge across these dispersed domains. Their key to innovation lies in recombining already existent technologies in innovative ways to address problems. Their unique position which gives them a vantage point from where they can view a wide range of industries, and when industries face similar problems it is this position which enables the transfer of knowledge across them. While further making the case for the recombination of existing technologies as an innovative tool, he quotes Rosenberg (1982) and Basalla (1988) to emphasize that the most dramatic impacts of new technologies have often come in industries other than the ones in which they first emerged. He states that the organisational culture that exists in these knowledge brokering companies such as the sharing of information, the steady flow of problems requiring solutions across varied sectors helped defeat the traditional boundaries of industries and enables the transfer of ideas across them, thereby becoming an aid in constant innovation. The literature reviewed takes a look at certain aspects of open innovation and not in its entirety as a business model. There is a lack of extensive literature which proposes or opposes the adoption of open innovation business models as a valid competitive strategy. The next sections of this paper will attempt to make a case for open innovation as a strategic part of the business models of firms.

Theoretical Framework Various academicians have discussed some of the features of open innovation, albeit in differing contexts, however Chesbrough (2003) was the first to formally define the various aspects of open innovation. He explains how open innovation structures are gradually replacing the earlier innovation systems that that followed a closed and insular model. The essence of the open innovation model is that valuable ideas can emerge from within the organisation or from outside it as well. And in the same vein they can be taken to fruition either by the company or by someone outside it. Fig -2 illustrates the open innovation model.

Fig 2 Open Innovation Model (Chesbrough, 2003) Chesbrough explains that this change in paradigms has taken place because of the following factors Phenomenal growth of university led education over the world, which has in turn led to a vast pool of highly trained and knowledgeable people. Earlier there was a scarcity of knowledge which led companies to build their own R&D labs to assist in the creation of new knowledge. However, with the 8

knowledge residing in public domains and universities increasing rapidly, companies now have access to this knowledge without having to invest in specific R&D labs Availability of venture capital. Before 1980 there wasnt too much venture capital available for start-ups. From around $700 million in 1980, the amount of ventured capital invested in America grew to $80 billion. The availability of this capital allowed individuals with ideas the option of starting their own companies instead of being dependent on the R&D labs of big firms. External Suppliers. Previously companies couldnt rely on external suppliers to provide them with integral components of their products. This forced them to develop the required capabilities to develop these components within their organisations itself. However, more recently, external suppliers have become more capable at providing specialized offerings to big firms and are able to provide them at equal, if not higher, levels of quality. In the open innovation landscape, the monopolies of knowledge enjoyed by traditional firms are lost. However, this does not imply that the R&D labs instituted by large firms have lost their relevance; it informs companies that the role of the R&D lab will have to change within the new environment. In its new role R&D labs within organisations will serve to assimilate and extract value from the vast amount of knowledge that lies external to the organisation. Their interaction with external researchers is more collaborative and therefore will involve the further extension of knowledge that has come from an external resource. This extension could be a recombination of knowledge to form a more complex framework. Organisations have to be more nimble in the fast paced market of today, and this implies that they access research conducted outside their perimeters if it will help them bring products to the market quickly. An indication of this new philosophy is implied in a statement by Merck, a leading pharmaceutical firm, in its 2000 annual report which states Merck accounts for about 1 percent of the biomedical research in the world. To tap into the remaining 99 percent, we must actively reach out to universities, research institutions and companies worldwide to bring the best of technology and potential products into Merck.

While in the closed innovation paradigm, venture capital firms were seen as a threat that could lure valued employees away from firms, in contrast, in the open innovation paradigm firms see venture capitalists as partners in the development of new technologies. With the increase in scientific knowledge, firms realise that they can no longer, by themselves, finance the necessary research required to convert scientific knowledge into its practical application. Venture capitalists provide the necessary capital to fund this research. Firms increasingly understand that having an open innovation strategy helps them build compatible systems; this compatibility at times is imbibed by past employees working on external research projects. In some cases, firms themselves take part in funding capital for start-ups, in a process known as corporate seeding. Open Business models Chesbrough (2006), in continuation to his work on open innovation argues that for companies to effectively tap into this new regime they will have to open up their business models. A business model achieves two main objectives The creation of value, by creating a product or a service from a set of raw materials through an array of activities, each activity adding value in the process The capture of a portion of that value, by asserting a unique position in the array of activities where there exists the possibility of a competitive advantage An open business model, while adhering to same objectives, sets itself apart by including a host of external ideas and concepts to create value. It can further capture portions of that value, by assuming unique positions in another companys business. Innovation activities are being affected by the increasing costs of innovation and revenue streams becoming shorter due to shorter product life cycles. An open business model effectively addresses these two issues by leveraging the expertise of external R&D resources, by saving both money and time. Fig. 3 illustrates the open innovation business model.

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Revenues

Sale/divestiture Spin-off

New Revenues

Own Market Share


0 Own Market Share

License

Internal development costs

Internal and external development costs


Cost and time savings from leveraging external development

Costs

Fig 3 Open Innovation Business Model (Chesbrough, 2006)

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Case Study Apple Apple was founded in 1976 by Steve Jobs and Steve Wozniak with the intent to manufacture computers. They revolutionised the computer industry by launching some of the most successful personal computers such as the Apple II series and the Macintosh series. In 2001, Apple entered the digital music market and spawned a cultural phenomenon with the iPod, the worlds best selling portable media player. This case study will look at two Apple products specifically, the Macintosh and the iPod, and will try to uncover the open innovation practices that were followed to help bring these products to market. Macintosh The Macintosh was envisioned at Apple in 1979, but it took five years for it to be finally launched in the market. What was initially designed as a low cost and easy-touse personal computer went though a lot of design changes for it to finally become the worlds first commercially successful personal computer featuring a graphical user interface (GUI), a mouse and a floppy drive. But the innovations of the GUI cannot be attributed to Apple alone as they had their origins in the Palo Alto Research Centre (PARC) facility of Xerox. Xerox (originally known as Haloid) was started in 1906 and initially was involved in the manufacture of photographic equipment. However, in 1959 they launched the worlds first plain paper photocopier, and as a result of the phenomenal market success that they achieved Xerox began to grow exponentially. By the end of the sixties Xerox had established itself in the photocopier business and was a billion dollar empire. In 1970, Xerox, sensing the potential in the nascent computer industry, launched the PARC facility in Palo Alto, California. It was intended as a research incubator for Xerox where scientists carried out research on semiconductor chips and computers. It was in this research environment that the laser printer, the ball mouse and the GUI were invented. In 1973, the scientists at PARC built their first computer and it was called the Alto. It was the first computer to feature a GUI and use a mouse for screen control. Intended to enhance the visual appeal of computers it sported innovative features like overlapping windows and bit-mapping of the screen. Working with computers then was very much command driven, user input was 12

recorded in input mode, editing took place in edit mode, etc. Computer users could work only on one single mode at a time and could not switch between different pieces of work on their computers. The bitmap display changed the way users could interact with the computer and brought in the era of windows, cursors and icons. The modern computer desktop as we know it was designed at PARC. In 1979, Apple was starting new projects to build the next generation of computers and which led Apple to seek investors to fund its growth. Xerox was one among the many venture capital firms and private investors that invested in Apple; they bought 100,000 shares of Apple. This investment gave Apple programmers access to Xeroxs PARC facility and were able to view the path breaking features of the Alto. Xerox was used to having visitors at its facility and mostly the visitors were unable to comprehend the technology that was displayed. The Apple engineers, on the other hand, were working on a project called Lisa, and had more than one insightful query for the researchers at PARC. A few months after the visit, a few PARC employees joined Apple frustrated with Xeroxs inability to harness the technology in a manner that would better address the market. The Lisa was positioned as a business computer and featured a graphical user interface and had high end hardware specifications which made it a very powerful computer for that time. The Macintosh project, on the other hand, was intended to be low cost and a simple-to-use machine. It was initially led by Jeff Raskin who had spent some time at the Xerox PARC facility and was very much influenced by two traits that he saw in the Alto. They were its bit-mapped display and its lack of command modes, two ideas that would go into building the Macintosh. Raskin left the Macintosh project midway and then Jobs took over the Macintosh team at Apple. He insisted on using a more powerful processor and hence the Macintosh was built with the same processor as that of the Lisas. The Macintosh was released in 1984, and after two years of sluggish growth became the first commercially successful personal computer featuring a GUI and a mouse. iPod The iPod wasnt the first portable media player to be introduced in the market and it had its predecessors like the Personal Jukebox (PJB) and the Diamond Rio which 13

were available in the market as early as 1998. But not only did these products have shortcomings such as inadequate interfaces, bulky appearances and performance issues, they were taken less seriously in the corporate boardrooms as well. In 1999, a few independent Apple developers had built a digital jukebox to play digital music, something that was missing on Apples computers. It was called SoundJam and after it was released it caught the attention of Apple who bought the application and decided to turn the third-party program into an official Apple application. SoundJam was rebuilt and renamed as iTunes, and was launched in 2001. It gave Apple users the ability to easily organise their digital music libraries. The successful launch of iTunes triggered off a train of thought within Apple and they were soon considering a re-entry into the consumer electronics industry (Apple had a bad history with the consumer electronics industry with products such as the Newton) with a portable media player. However Apple did not have the in-house capabilities to start designing such a product and began looking outside its walls for expertise. Anthony Fadell was an engineer working at Philips and was vice president for business development, and was specifically responsible for the companys digital audio strategy. He saw the possibilities for products related to digital audio, but was unable to get any further support within Philips. Fadell quit Philips and ventured to start his own company to take his ideas forward. Around that time, Apple got in touch with him and offered him an eight week contract to build a prototype for an mp3 player. The prototype got Apple interested enough to pursue it a as a full-time project and Fadell was offered a position at Apple to build the iPod. Another company in Silicon Valley called PortalPlayer was working on mp3 players, after noticing the possibility that the small hard drives that were used in notebooks could be used to build small mp3 players. Without having adequate support from any of the big technology companies in America, they were trying to develop a product in collaboration with Asian companies. When Apple approached them to assist in the development of the iPod, they were more than glad to be of assistance as subcontractors in the project. This collaboration with PortalPlayer gave Apple crucial access to networks of chip manufacturers and hard disk manufacturers in Asia. While

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PortalPlayer gave the structural basis for the iPods hardware Apple still needed software that would run on the player and help interface with iTunes as well. Pixo was a company founded by a former Apple employee which wrote operating systems for hand-held devices. Apple approached Pixo to develop the required operating system for the iPod. Pixo fit the bill because it had developed software that was portable and could be easily adapted to custom chips. Also, since Pixo followed similar design principles as Apples when it came to software development the integration with iTunes was relatively easier to achieve. Pixo therefore developed the operating system for the iPod along with its user interface with inputs from Apple. The iPod was released in 2001 and received a lukewarm reception from the industry. It was initially built keeping Apple users in mind and therefore had no support for Windows users. A popular third-party utility that came out later was an application that allowed iPod owners to synchronise their playlists with their digital music libraries on Windows PCs. Taking note of this development, Apple worked a deal with a company called MusicMatch to provide the software required for iPods to work with Windows platforms and in 2002 iPods could connect to Windows PCs through MusicMatch. However, there was a lack of synergy as compared to the seamless integration of the iTunes and the iPod. Recognising the potential to access a much bigger market, in 2003 Apple introduced a version for iTunes on the Windows platform. From sales of 1 million in 2003, the iPod took the world by storm and became the worlds best selling digital media player by achieving sales of more than 140 million iPods to-date.

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Analysis The commercial success of these two products, have to be seen in relation to the open innovation strategies that were pursued at Apple during their development. While there is no doubt that both the products mentioned were robust and of a high quality, a closed innovation model would not have helped contribute to their development, and subsequent success in the market, in the same fashion. It will be an exercise in clarity, to understand the open innovation concepts employed in the development of these two products. Macintosh Before we begin our analysis of the Macintosh, it will be a good idea to take account of the situation at Xerox. The innovation paradigm followed at the Xerox PARC facility was in tune with the popular convention at the time which was the closed innovation paradigm. Xerox had invested heavily into the PARC facility, and the scientists working at PARC had produced some path-breaking inventions. But the insular approach of Xerox towards innovation, resulted in them failing to revise their business models to support the technical innovations. When Xerox finally went to the market with a computer called Star (which encompassed many of the technical innovations developed at PARC), their business model was unable to support it and was deemed a commercial failure. Apple, on the other hand, leveraged the investment that Xerox had made in them and used the opportunity to gain an understanding of the innovations happening at the PARC facility. The Apple engineers, who visited PARC, had specific queries about the Altos capabilities and technical features. It should be noted that the visit did not entail any transfer of technology. While Apple publicly refuses to acknowledge that it gained useful ideas from that particular visit, it can be safely said that what the Apple engineers saw at Xerox, PARC helped mould their thought about the future of computers and computing. Also, the influx of a few PARC employees into Apple gave it access to the culture and ideas at PARC. The knowledge that was thus gained was more tacit than anything else, which Apple converted into explicit knowledge when it developed the LISA and the Macintosh. This is one of the earliest examples of open innovation in the computer industry, which helped Apple sustain a competitive advantage over its rivals. 16

iPod Unlike the Mactinosh, the Apple was developed at a time when open innovation strategies had gained a greater acceptance in the industry. For this very reason, it serves as a better example to portray aspects of the open innovation business model. Both the iTunes and the iPod were ideas that originated outside the company. In the case of iTunes, it was even developed outside the company. But in both cases, these ideas were absorbed by Apple and further nurtured and turned into the popular products that we know them to be today. When Apple decided to proceed with the development of the iPod, it realised that it would be able to deliver a product much faster if it looked for possible contractors in the market who were already working on mp3 players. The decision to use the PortalPlayer as the iPods structural basis and Pixo as its operating system is a classic case of a firm leveraging external development to save time and money. The fact that Pixo was developed by a former Apple employee only helped Apples case further as it made the Pixo more easily compatible with iTunes, having similar design principles. The decision, taken after the iPods launch, to develop iTunes for the Windows platform helped establish the dominance of the iPod across the entire industry.

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Discussion The case study discussed in the previous sections helps display the potential of open innovation models as a competitive strategy. The two separate products, while both having flavours of open innovation in their development, iPod more strongly than the Macintosh, broadly represent the shift that has taken place in the industry. In some ways Xerox, PARC represents the end of the closed innovation paradigm and the Apple Macintosh represents the beginning of the new open innovation paradigm. Over the span of the next 20 years, the open innovation model gained increasing credibility in the industry. Therefore, when Apple decided to build the iTunes on the Windows platform, an idea that would have been scoffed at in the closed innovation regime, it was a strategic move by Apple to further its competitive advantage, a move that makes perfect sense within the open innovation regime. The decision to employ the research assets of partners and suppliers is no longer an isolated phenomenon, and is widely accepted as a standard practice in many industries today. Conclusion Open innovation is an accepted phenomenon today and is practiced industry-wide across different levels and in varying degrees, which ranges from the mere exchange of knowledge between firms to partnering to produce more complex products. However, open innovation is not an end itself. Companies have to strategise accordingly, to make financial gains and build competitive advantages, when they employ open innovation models. One of the limitations of the paper has been that it has not addressed the intellectual property rights that have to be taken care of when companies engage in the sharing of knowledge and resources. Further research can be carried out to study the same and explore the options available to companies and propose options if none exist. The ideologies of the creative commons project and how it can be applied to open innovation will make for an interesting study. It is true that if companies need to consistently deliver value to their shareholders and customers, then they will have to foster the ability to continuously innovate. The open innovation regime and the corresponding open innovation business models can assist

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the process of innovation. Firms that are successfully able to leverage competitive advantage based on this model stand to gain. References 1. Basalla, G. (1988) The Evolution of Technology, Cambridge University Press, New York. 2. Cantwell, J. (Ed.) (2005) Innovation and Competitiveness, Oxford University Press, Oxford. 3. Chesbrough, H. (2003) Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, 4. Chesbrough, H. (2006) Open Business Models: How to Thrive in the New Innovation Landscape Harvard Business School Press, 5. Chesbrough, H. W. (2003) "The Era of Open Innovation", Mit Sloan Management Review, 44 (3), pp. 35-41. 6. Cohen, W. M. and D. A. Levinthal (1990) "Absorptive-Capacity - a New Perspective on Learning and Innovation", Administrative Science Quarterly, 35 (1), pp. 128-152. 7. Garud, R. and A. Kumaraswamy (1993) "Changing Competitive Dynamics in Network Industries - an Exploration of Sun Microsystems Open Systems Strategy", Strategic Management Journal, 14 (5), pp. 351-369. 8. Hargadon, A. B. (1998) "Firms as Knowledge Brokers: Lessons in Pursuing Continuous Innovation", California Management Review, 40 (3), pp. 209-+. 9. Kawasaki, G. (1990) The Macintosh Way, Scott, Foresman, 10. Laursen, K. and A. Salter (2006) "Open for Innovation: The Role of Openness in Explaining Innovation Performance among Uk Manufacturing Firms", Strategic Management Journal, 27 (2), pp. 131-150. 11. Levy, S. (1995) Insanely Great, Penguin Group (USA) Incorporated, 12. Levy, S. (2007) The Perfect Thing: How the Ipod Shuffles Commerce, Culture, and Coolness Simon & Schuster, 13. Macmillan, I., M. L. McCaffery and G. Vanwijk (1985) "Competitors Responses to Easily Imitated New Products - Exploring Commercial Banking Product Introductions", Strategic Management Journal, 6 (1), pp. 75-86. 14. Moritz, M. (1984) The Little Kingdom, W. Morrow, New York. 15. Nelson, R. R. (Ed.) (1992) What Is "Commercial" And What Is "Public" About Technology and What Should Be?, Stanford University Press. 16. Porter, M. E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors Free Press, 17. Porter, M. E. (1998) "Clusters and the New Economics of Competition", Harvard Business Review, 76 (6), pp. 77-+. 18. Rosenberg, N. (1982) Inside the Black Box, Cambridge University Press, New York. 19. Teece, D. J. (1984) "Economic-Analysis and Strategic Management", California Management Review, 26 (3), pp. 87-110. 20. von Hippel, E. and G. von Krogh (2003) "Open Source Software and The "Private-Collective" Innovation Model: Issues for Organization Science", Organization Science, 14 (2), pp. 209-223. Internet Resources : 19

21. http://www.landsnail.com/apple/links.htm - Online resources covering the history of Apple 22. http://apple2history.org/index.html - Apple II history 23. http://www.apple-history.com/ - Brief history of Apple products 24. http://www.theapplemuseum.com/ - History of Apple 25. http://lowendmac.com/orchard/index.html - Articles on history of Apple and its products 26. http://query.nytimes.com/gst/fullpage.html? res=950DEFDF1F3AF935A15751C0A96F948260&sec=&spon=&pagewante d=1 New York Times article on Sculley (Feb, 1989) 27. http://www.macnn.com/ - Mac News 28. http://www.macworld.com/news.html - Apple product reviews and news 29. http://www.appleinsider.com/ - Apple news

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