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1.Choose two organizations which have each used a different open innovation strategy and present a brief profile of each one .

2.Evaluate the effectiveness of their strategies:

By comparing organization practices with reference to the literature of open innovation and strategic innovation theory.

Checking the companies’ financial results to support your analysis

3.Summarize and compare the results in a table showing the main elements discovered.

4.According to the results, present a conclusion based on your findings.

Open Innovation Strategy in Coca-Cola

The concept of the open innovation strategy acknowledges the strategic approach that goes opposite to the silo mentality in any organization (King & Lakhani, 2013). The modern organizations are widely observed to follow higher level secrecy with their projects and the business approaches. The organizations are forced to do so in order to make sure that the product and the services that they offer to their customers do not get exposed to their competitors (Schjelderup, 2016). In that case the competitor organization will get the benefit of introducing an excellent concept in their products which they never invented. The concept of the open innovation strategy breaks both the top level secrecy and the silo mentality of the management (Chesbrough & Brunswicker, 2013). The paper will describe two organizations which employed the open innovation strategy in their operations and how they restructured their business with the introduction of the mentioned open innovation strategy.

The chosen organization for the paper will be Coca Cola and the National Aeronautics and Space Administrations (NASA). The Coca Cola Company is an American organization which is known for manufacturing, retailing and marketing the non-alcoholic beverage along with the syrups ("Coca-Cola Global", 2018). The organization has it’s headquarter in Atlanta, Georgia, United States and is currently managed by Muhtar Kent (Chairman), James Quincey (CEO and President) ("Coca-Cola Global", 2018). The organization was founded by John Pemberton as Coca-Cola and later it was founded by Asa Griggs Candler as The Coca-Cola Company. The organization is currently having its stocks listed on the New York Stock Exchange (NYSE), S&P 500 Index, The Russell 1000 Index and in the Dow Jones Industrial Average (DJIA) ("The New York Stock Exchange | NYSE", 2018). The organization being a multinational organization, is currently experiencing the expertise of 61800 employees and enjoying an operating income of 7.501 billion US dollars in the financial year 2017. In the same financial year, the organization expressed the statistics of their revenue reaching 35.410 billion US dollars ("2017 Integrated Annual Report", 2018). The organization is significantly focusing on extending their product chain with the introduction of the products like green tea, vitamin drinks and many more. Along with this the organization focused on the mergers and acquisitions over the years in order to find the scope to enter new market in order to expand their business. Glaceau or Huiyuan Juice are those organizations which enabled the concerned organization in entering a new market along with the access into a new product as well (Company et al., 2018). The organization largely focuses on the digital selling methods along with the presence of the in-store in order to provide the customers with the added relaxation in finding their refreshments.

NASA is the second organization which inherited the open innovation strategy. The concerned organization is an independent part of the Federal Government of the United States which is responsible for the aerospace and aeronautics research and civilian space program ("Branches of the U.S. Government | USAGov", 2018). The organization was established by the American President Dwight D. Eisenhower in the year 1958 ("National Aeronautics and Space Administration", 2018). The organization is currently having its headquarters in the Washington D.C., United States with a number of employees exceeding 17381. The organization is currently managed by the Administrator of NASA, James Frederick Bridenstine and the Chief Financial Officer, Jeffrey DeWit ("National Aeronautics and Space Administration", 2018). The organization is one of the premier agency in the concerned field and is currently having a budget of 20.7 billion US dollars in 2018 ("2017 Annual Report", 2018). The organization from the initiation is having several manned programs starting from X-15 rocket plane (1959-1968), Project Mercury (1958-1963), Project Gemini (1961-1966), Apollo Program (1961-1972), Skylab (1965-1979), Apollo-Soyuz Test Project (1972-1975), Space Shuttle Program (1972-2011), International Space Station (1993- present) to Beyond Low Earth Orbit Program (2010-2017) ("NASA Missions A-Z", 2018). Apart from the manned programs the organization is able to conduct several unmanned programs as well in order to explore the atmosphere and geography of the earth and solar system. Along with the exploration the organization is able to launch several communication satellites. The organization is having clear motive of extending the human activities around the solar system, creation of the new inventive space technologies along with the advancement in the aeronautics research. The organization is also having several field centres in Florida, California, Maryland, Texas, Alabama and Mississippi ("NASA Centers and Facilities", 2018).

Coca-Cola Accelerator program

The Coco-Cola Company was observed to implement two open innovation strategy in their organization. The concept of open innovation and the strategic innovation theory states the ignorance of the silo mentality in the process. The innovative framework of the strategy is believed to confirm that the association of the internal and external sources in the formation of the strategy or the processes will strengthen the base of the strategy. The organization is a significantly important name in the beverage industry and in order to cope up with the market pressure, the organization needs to make sure that the strategy goes well with the customers. The concerned organization constructed two open innovation strategies in the selling and processing part respectively. The first one was the Coca-Cola Accelerator Program which generally helped start-ups of eight cities like San Francisco, Bangalore, Sydney, Buenos Aires, Berlin, Istanbul, Rio de Janeiro and Singapore ("The Bridge by Coca-Cola", 2018). The organization had the aim to build a happiness brand and with the formation with the start-up, the organization was sufficiently capable in converting the start up into scale up. This was instrumental in spreading their business and that too be in very small segments. The next open innovation strategy that was implemented by the organization was the Freestyle Dispenser Machine. This was a unique strategy to involve the customers in the processing of the product and that was a significantly crucial idea in order to create the brand loyalty among the customers of the organization. The organization in their strategy was able to provide the customers with the chance of mixing their own flavours and creating a new one for the organization ("Home Page", 2018). The new flavour was recorded by the organization in order to implement that in their freestyle machines which are located in the several parts of the world. This was crucial for the organization in order to assess the favoured flavour by their customers and the customers seemed to enjoy their participation in the process of production as well.

The organization NASA was significantly planning to incorporate the open innovation strategy in their operations for some time but they adopted the mentioned form of strategy in order to build the mathematical algorithm which will be able to determine the optimal content of the medical kits for the manned programs that will be initiated by the concerned organization in future. The importance of the product was significant for the concerned organization as the attention from the part of the organization regarding the healthcare of the employees was of immense priority. The organization made sure that the solution be highly cost effective and the quality of the solution never get compromised and in doing so they collaborated with the nominated agencies like TopCoder, Harvard Business School and the London Business School ("Design & Build High-Quality Software with Crowdsourcing | Topcoder", 2018). This enabled the organization to incorporate professionals of different fields like coders or software enthusiasts in providing the innovative software. With the mentioned innovation the organization was able to obtain the advantages of the theoretical framework of the open innovation strategy.

Freestyle Dispenser Machine

It will be controversial to acknowledge the success of the open innovation strategy only in terms of the financial perspectives as the concept that were introduced by the concerned organization Coca Cola was capable of getting rated by the customer acknowledgement as well. The background of the organization before initiating the strategy was bit vulnerable with the limited amount of products and the increasing amount market competitors. The organization was not going well financially. The strategy enabled the organization to reduce the huge amount of expenses for the research and the concerned organization was observed to utilize their available freestyle dispenser machine. The annual report of the organization in the financial year 2008 claimed the organization had a revenue of 31.94 billion US dollars from the previous year’s 28.86 billion US dollars (Company et al., 2018). But in the following year the organization observed a sharp decrease in the revenue which came down to 30.99 billion US dollars (Company et al., 2018). This was the financial situation of the organization when the considered the plan of introducing the freestyle dispenser machines into the market. Initially the organization felt some issues with the presence of technology in the innovation as the operation of the machines was bit confusing for the customers who were trying it for the first time but the innovation went well for the company and that was visible with the annual report of the financial year 2010. The organization claimed a rise in their revenue and they recorded the revenue of the financial year 2010 to be 35.12 billion US dollars (dollars), 2018). The organization went on with the plan of the freestyle dispenser machine plan and in the following year the organization claimed an increment in their revenue which for the financial year 2011 reached to 46.54 billion US dollars (dollars), 2018). Thus the organization was able to generate increased amount of revenue with the new strategy along with the customer satisfaction.

Topic

2009

2010

2011

2012

20113

2014

2015

2016

2017

Net Operating Revenue

30.99

35.119

46.542

48.017

46.854

45.998

44.294

41.863

35.41

Operating Income

8.231

8.431

10.173

10.779

10.228

9.708

8.728

8.626

7.501

Basic Net Income Per Share

0.0029

0.0051

0.0037

0.002

0.0019

0.0016

0.0016

0.0015

0.0002

Diluted Net Income Per Share

0.00293

0.00506

0.00369

0.00197

0.0019

0.0016

0.00167

0.0014

0.0002

(Information Courtesy: Annual Report of The Coca Cola Company)

(All Figures are in Billion US Dollars)

The organization NASA is not a completely profit making organization and their strategy was not meant to increase the amount of revenue for the organization rather the organization used their strategy to increase the amount of the comfort and the quality related with the medical kits of the concerned organization. The assessment of the success of the new strategy for the concerned organization was to be carried out by the internal study of the responses of the employees who used the product. The organization in their report was observed to acknowledge the impact of the software in assessing the optimal content of the medical kits for their future manned missions ("National Aeronautics and Space Administration", 2018). The amount of safety that the medical kits inherited with the introduction of the new product was appreciated by the members of the organization in their general meeting which itself clarifies the success of the new strategy for the concerned organization.       

Topics

Coca-Cola Company

NASA

Cost Effective

The organization had the responsibility to spread their product with the new shops and supply chains but with the support to the start-ups, the organization was able to reduce the operating and initialization cost. Along with that the organization was significantly reducing the amount of money that were to be associated with the research regarding the new products and flavours.

The solution for the organization was significantly important and the organization was able to cut down the amount of money that were related with the research by sharing the responsibility among many well decorated researchers.

Improved Productivity and Product

The organization was able to provide a customer designed product to the customers of the organization and as the product was composed according to the wish of customers, the organization was able to align their product according to the market trends.

The concept of closed thinking or the innovation, generating from the thoughts of a limited amount of people had the possibility of making the quality of the product limited. The organization justifiably employed several agencies in providing an improved solution and the organization observed quality works from the countries like UK, Japan and Indonesia.

Customer Involvement and Market Targeting

The concerned organization was significantly smart in involving their customers as the organization enabled the customers to form the appropriate mixture of their preferred flavours and create a new one. The organization was instrumental in aligning their product according to the market trends and in doing so the organization was not in need to do any sort of intense market research as the customers with their preferred mixture of flavours were meeting the need of the market research.

In this case the incorporation of the customers were not visible in such an extent rather the association of the different agencies in providing a quality solution was observed. The cooperation from the different responsible organizations was visible in making the product of optimum quality.  

On a concluding note it can be said that the finding of the impact that the freestyle dispenser machine had on the company’s financial status is described in the previous section with the increment in the generated revenue. The implementation of the plan also acknowledged the importance of association with the customers. The organization was incredibly good at involving the customers with the production by the concept of customer designed flavours and it increased the brand association of the concerned organization. The strategy by the NASA was found to be a precautionary step for the betterment of the medical kits of the concerned organization and the organization was significantly impressive in considering the scope of involvement of more than one agency for the better quality of the solution. This also made sure that the preliminary research cost of the product does not affect the concerned organization.

References:

2017 Annual Report. (2018). Retrieved from https://www.nasa.gov/langley/overview/2017-annual-report2017.

Integrated Annual Report. (2018). Retrieved from https://coca-colahellenic.com/en/investors/reports/2017-integrated-annual-report/.

Branches of the U.S. Government | USAGov. (2018). Retrieved from https://www.usa.gov/branches-of-government.

Chesbrough, H., & Brunswicker, S. (2013). Managing open innovation in large firms. Stuttgart: Fraunhofer Institute for Industrial Engineering.

Coca-Cola Global. (2018). Retrieved from https://www.coca-cola.com/global.

Company, O., Main, O., Journey, A., Mission, V., Inclusion, D., & Rights, H. et al. (2018). Glacéau Vitaminwater. Retrieved from https://www.coca-colacompany.com/brands/glaceau-vitaminwater

Company, O., Main, O., Journey, A., Mission, V., Inclusion, D., & Rights, H. et al. (2018). 2008 Annual Review. Retrieved from https://www.coca-colacompany.com/investors/2008-annual-review

Company, O., Main, O., Journey, A., Mission, V., Inclusion, D., & Rights, H. et al. (2018). 2009 Annual Review - The Coca-Cola Company. Retrieved from https://www.coca-colacompany.com/investors/2009-annual-review

Design & Build High-Quality Software with Crowdsourcing | Topcoder. (2018). Retrieved from https://www.topcoder.com/

dollars, T. (2018). Coca-Cola's net operating revenues worldwide, 2017 | Statistic. Retrieved from https://www.statista.com/statistics/233371/net-operating-revenues-of-the-coca-cola-company-worldwide/

Home Page. (2018). Retrieved from https://www.coca-colafreestyle.com/

King, A., & Lakhani, K. R. (2013). Using open innovation to identify the best ideas. MIT Sloan management review, 55(1), 41.

NASA Centers and Facilities. (2018). Retrieved from https://www.nasa.gov/about/sites/index.html

NASA Missions A-Z. (2018). Retrieved from https://www.nasa.gov/missions/

National Aeronautics and Space Administration. (2018). Retrieved from https://www.nasa.gov/

Schjelderup, G. (2016). Secrecy jurisdictions. International Tax and Public Finance, 23(1), 168-189.

The Bridge by Coca-Cola. (2018). Retrieved from https://thebridgebycocacola.com/

The New York Stock Exchange | NYSE. (2018). Retrieved from https://www.nyse.com/index

FTSE Russell. (2018). Retrieved from https://www.ftserussell.com/

Harvard Business School. (2018). Retrieved from https://www.hbs.edu/Pages/default.aspx

Home | London Business School. (2018). Retrieved from https://www.london.edu/

Standard & Poor's | Americas. (2018). Retrieved from https://www.standardandpoors.com/en_US/web/guest/home

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