Three new business models for “the open firm”

Abstract

Purpose

The authors found that as more firms participate in open business ecosystems, the borders between an individual firm and its stakeholders – customers, suppliers, workers, partners and innovators – have become much more permeable and reconfigurable. This paper aims to address this issue.

Design/methodology/approach

The paper shows how new open business models enable firms to maximize the benefits of openness while limiting the risks.

Findings

The authors propose three “open firm” models based on their research, experience and observation: the harbor and fleet; the demand forum; and multivalent sourcing.

Research limitations/implications

Case studies are provided. For example, the supply chain tracing firm Historic Futures has developed an online application called String that enables participating companies to monitor products hour by hour and mile by mile along the supply chain.

Practical implications

The ability to establish and maintain appropriate networks is central to the success of open‐firm strategies.

Originality/value

As technological advances spur firms toward an era of greater openness, companies will increasingly need to examine the potential economic benefits of digitally linked clusters of businesses. The authors' framework can help executives decide which type of open‐firm model can work best.

Citation

Purdy, M., Robinson, M.C. and Wei, K. (2012), "Three new business models for “the open firm”", Strategy & Leadership, Vol. 40 No. 6, pp. 36-41. https://doi.org/10.1108/10878571211278877