Global Open Innovation Case Study - Mercedes Autobahn Flashcards
Define Creative Destruction
Involves new entrants radically transforming the industry, in a way that the incumbent firms and technologies are made obsolete
Define Open Innovation
Is a situation where an organisation does not just rely on their own internal knowledge and resources for innovation but also uses multiple external sources
Explain how open innovation can be mutually beneficial
For startups - in their nature have scare resources, so benefit from interactions and partnerships with other resource actors
For incumbents - have been found to engage with startups for the purpose of boosting their own innovation
Give a brief background on Mercedes Benz as a company
- Formed in 1925 in a merger between DMG and Benz with growth occurring from the production of combustion engines in WW1
- Has become synonymous with high craft German engineering, with a now iconic range of luxury and semi-luxury cars
Explain how the downfall of closed innovation occurred (Chesbrough,2003)
Growing mobility of skilled and experienced workers who would spill knowledge
Growth of venture capitalists who would make startups more competitive
Growth of external competition outside of the US
Explain how the growth of open innovation occurred (Chesbrough,2003)
Abundant knowledge and idea of collective intelligence
Mutually beneficial for incumbents and startups
Creates new meeting places
Explain how Mercedes Autobahn came to fruition
In 2016, Mercedes realised the need to embrace open innovation and the opportunity to collaborate with startups
This was needed to reduce the time to identify, develop, test and implement promising technologies and solutions
Startup autobahn involved Play tech centre, the University of Stuttgart and 30 large corporate sponsors
Give and example of a success in the Startup Autobahn process
What3Words was a startup that collaborated with Mercedes to jointly develop a voice activated navigation system that guides users to precise locations by dividing the world in 57 billion squares
Took less than a year to move from the first interaction to the integration of the system in Mercedes A class car models
Explain how a Open corporate accelerator works
Emphasises and accelerates the strategic fit between sponsors and startups by only integrating innovations that fill a gap in the sponsors needs
Involves inviting the participation of multiple sponsors and stakeholders rather than establishing exclusive sponsor - startup relationships
Explain the steps in the open CA process and how did startup autobahn implement this
Step one - scouting and selection - involves matching startups to business unit needs, making sure the right fit is acquired. Mercedes do this through deep dive events where startups can meet interested BU’s
Step two - solution adaption - involves proving startups can fill the sponsors needs. Mercedes does this through helping startups and BU’s jointly design their project with strict goals to ensure startups critically focus on whats needed
Step three - solution integration - involves implementing the solution at scale. Mercedes do this through holding an expo day where representatives of the startup and BU share results and make a decision to integrate or terminate
Define the advantages to mercedes of open innovation
- Explore new markets - cooperation with startups can provide new opportunities in emerging markets
- Entrepreneurship culture - idea of mentoring startups can be projected throughout the company to employees, fostering a culture of thinking like an entrepreneur
- Reduces innovation cycle time - takes less time than closed innovation method at 3-6 months
Define the disadvantages to mercedes of open innovation
Potential competition - startups and sponsor may be reluctant to share knowledge and intellectual property
Closed mindness - lack of global startups with the majority from Germany. May close off potential global innovation opportunities
