3.1 Open Business Model (OBM) Factor

With the increased adoption of open innovation practices, “open business models” (OBM) have emerged as a new design theme (^{Chesbrough, 2006}). As we’ve see, exist a lot of definitions to be analyzed depending the point of view of the researcher, for example ^{Weiblen (2014)} refers in its study of open business model definitions, among 13 papers and three groups of concepts: “a) Same: for seven of the papers, it was not possible to spot a notable difference between open innovation and open business model. The concepts are used almost synonymously .b)OBM = BM based on OIN: in two of the papers, the authors see a firm using open innovation principles as one that implements an open business model but the differentiation is made. c) OBM = BM adjusted to OIN: four papers adopt a slightly different standpoint. Here, certain adjustments to the firm’s business model have to be made to accommodate for the incorporation of open innovation into R&D.

As the last two groups show, there is a slight difference in meaning, but the border between open innovation and the open business model concept is hard to draw. Before taking up this point in the discussion of the results, the remaining papers of the literature base, which take a broader perspective on the open business model, are presented.”

Despite the mentioned above, to facilitate our point of view of conceptual OBM, in this paper, we porpose to use the ^{Osterwalder & Pigneur (2010)} definition of business model: “A business model describes the rationale of how an organization creates, delivers, and captures value”. If we see the Table 4 we found out in an implicit form ,the 9 blocks of the ^{Osterwalder & Pigneur’s (2010)} model: VPR, MKS, PTF, KA,KR,CRM,RIPR,CST and therefore we can call these group of variables the business management (BMG) factor. Although some authors, such as ^{Euchner and Ganguly (2014)} comment about this part of the model: “it misses the key dynamic elements of working business models- it does not represent coherence (or the relationshipamong elements); it does not represent the competitive position (which is off the canvas); and it does not quantify the economic leverage points”.But, we consider that it can be well complemented, with the remaining variables which are grouped, as follows: TECM, TECP variables group we can call as a tecnology (TEC) factor; SOBM, SIPR variables group as a strategy (STR) factor; IPR, DIV variables group we can call as a new entrepeneurships (NWE) factor and finally, ORBM, GOV variables group we can call as a open innovation orientation(OIO) factor.

3.1.1 The Business Model Management (BMG) Factor

As we mention above, this article is based and adapted to the ^{Osterwalder & Pigneur (2010)} model, more recognized as Business Model Generation. See Table 4.

The proposed conceptual OBM is adapted and explained as follows:

-The market segmentation (MKS) as the basis to define the services and products specialized to offer to the customer according ^{Osterwalder & Pigneur (2010)} and being: mass market, niche market, segmented market, diversified market, multi-sided platforms (or multi-sided markets). The key questions to be solved are: For whom are we creating value? Who are our most important customers?. It represents the opportunity to analyze, different application of the technology besides the current market such as the discovering and developing new markets or for licensing other firm’s market (^{Osterwalder & Pigneur, 2010}; ^{OECD, 2008}).

-The value proposition (VPR) is the core of any business and is characterized by: newness, performance, customization, “getting the job done”, design, brand status, price, cost reduction, risk reduction, accesibilty, convenience /usability. The key questions to be solved: are: what value do we deliver to the customer? which one of our customer’s problems are we helping to solve?, which customer needs are we satisfying?,what bundles of products and services are we offering to each Customer Segment? (^{Osterwalder & Pigneur, 2010}). The model includes the user a source of innovation to create value, as a tool to capture value (^{Von Hippel 2005}). A growing number of research and development-driven companies are located in knowledge-based ecosystems. Value creation by these ecosystems draws on the dynamics of single firms (interacting and partnering) as well as the ecosystem at large (^{Van der Borgh et al. 2012}).

-The customer relationship management (CRM). This section describes the types of relationships it wants to establish with specific customer segments, being for instance: personal assistance, dedicated personal assistance, self-service, automated services, communities, co-creation. Special attention represents the co-creation relationship because in the world of Web 2.0 has considerably increased the possibilities of user involvement in the production process and, thereby, has given rise to new forms of co-creation (OBM with customers). Because the roles of consumers, (or prosumers) have radically changed, specific challenges have emerged, being the main challenges: incentives, risks and costs, IPRs. (^{Rayna & Styriukova, 2014}).The types of relationships might be driven by the following motivations: .customer acquisition; customer retention; .boosting sales (upselling). It includes key questions to be solved: through which channels do our customer segments want to be reached?, how are we reaching them now?, how are our channels integrated?, which ones work best?,which ones are most cost-efficient? how are we integrating them with customer routines? (^{Osterwalder & Pigneur, 2010}).

-The channels based on platforms (PTF). This block describes how a company communicates with and reaches its customer segments to deliver a value proposition. It´s used for raising awareness among customers about a company’s products and services, helping customers evaluate a company’s value proposition allowing customers to purchase specific products and services delivering a value proposition to customers and providing post-purchase customer support. It involves key questions to be solved: through which channels do our customer segments want to be reached? , how are we reaching them now? , how are our channels integrated? which ones work best?,which ones are most cost-efficient?, how are we integrating them with customer routines? . It´s highly recommended, to be close to customers and providers follow the channel fases, such as: awareness, evaluation, purchase, delivery and after sales with the own (or with partners) resources and capabilities (^{Osterwalder & Pigneur, 2010}; ^{OECD, 2008}).

-The revenues streams (RIPR) is adapted from the original ^{Osterwalder & Pigneur (2010)} model representing the cash a company generates from each customer segment (costs must be subtracted from revenues to create earnings) specially differenced here, from IPR due the intellectual capital of the firm (mainly based on technology) and taking different forms, such as: assets sales, usage fee, subscription fee, lending/renting/leasing, licensing, brokerage fees, advertising, and several forms of pricing (static/dynamics) (^{Osterwalder & Pigneur, 2010}).This variable represents a great chance, for the organizations based on de IPR protection as: patents, trademarks and copyrights, for commercialising them using patent pools or cross-licensing portfolios, for instance (^{OECD, 2008}).Based on IPR, some key question to be solved are: for what value are our customers really willing to pay?, for what do they currently pay?, how are they currently paying?, how would they prefer to pay?, how much does each RIPR contribute to overall revenues?

-The key resources (KYR). In OBM there’s no more the most important assets required to make a business model work (^{Chesbrough, 2006}) due the capability of the firm to access to the external resources of its partners. But every OBM, requires it. These resources allow an enterprise to create and offer a VPR, reach markets, maintain relationships with MKS, and earn revenues involving tangible (buildings, infrastructure, labs, etc) and intangible (data, information, talent personnel, etc.) assets. KYR can be physical, fi nancial, intellectual, or human; also can be owned or leased by the company or acquired from key partners (^{Osterwalder & Pigneur, 2010}). Some key questions to be solved are: what key resources do our value propositions require? , our distribution channels? customer relationships?, revenue streams based on IPR? If we opening up, we see that a conceptual OBM might includes various perspectives: (1) globalization of innovation, (2) outsourcing of R&D, (3) early supplier integration, (4) user innovation, and (5) external commercialization and application of technology (^{Gassman, 2006}) in own or partners labs (^{Asakawa et al. 2010}) to apply the KYR in optimal conditions

-The Key Activities (KYA) there’s no more the most important assets required to make a business model work (^{Chesbrough, 2006}) due the capability of the firm to access to external activities of its partners. It describes the most important things a company must do to make its OBMs work as the most important actions a company must take to operate successfully. They are required to create and offer a VPR, reach markets, maintain CRM, and earn revenues. Some key activities for instance are: production, problem solving and platform network. Key questions to be solved are: what key activities do our value propositions require?, our distribution channels?, customer relationships?, revenue streams? (^{Osterwalder & Pygneur, 2010}). For instance, about the key activities involving knowledge, exists an spatial clustering of economic activity and its relation to the spatiality of knowledge creation in interactive learning processes. It questions the view that tacit knowledge transfer is confined to local milieus whereas codified knowledge may roam the globe almost frictionlessly. Some studies highlight the conditions under which both tacit and codified knowledge can be exchanged locally and globally (i.e. cluster and network innovation systems) (^{Bathelt et al. 2004}). There is currently a broad awareness of OBM and its relevance to corporate R&D. The implications and trends that underpin OBM are actively discussed in terms of strategic, organizational, behavioral, knowledge, legal and business perspectives, and its economic implications as key activities (^{Enkel et al. 2009}). Previous studies have firmly established the technological gatekeeper to be a key node in the innovation process as key activities (acquiring, translating, and disseminating external information throughout the R&D unit) (^{Whelan et al. 2010}). Besides, several studies argue that a key activity of a firm is to recognize the value of new, external information, assimilate it,and apply it to commercial ends is critical to its innovative capabilities (^{Cohen & Levinthal, 1990}; ^{OECD, 2008}) called commonly as absorptive capacity in an OBM. Some special conditions for instance, the pool of scientist, clusters and academic institutes, near to markets and production facilities are key factors to do investments for activities aimed to R&D, in other countries (^{Schwaag 2006}; ^{INSEAD et al., 2006}). Companies base their decisions to locate R&D as the key activities on a variety of factors, principally: market potential, quality of R&D staff, university collaboration, and intellectual property protection. While lower cost can be a consideration (i.e. outsourcing) this is generally less important than other factors. (^{Thursby & Thursby 2006}; ^{Kuemmerle 1997}; ^{Dunning & Narula 1995}). Exists acknowledge that some degree of outsourcing can further corporate creativity and that virtuality makes sense under certain conditions. But every company, they contend, needs to tailor its organization to its own operations and its unique sources of innovation (^{Chesbrough & Teece, 2002}).

-The Partnerships (PTS) represent the network of suppliers and partners that make the business model work companies forge partnerships for many reasons, and partnerships are becoming a cornerstone of many business models. Companies create alliances to optimize their business models, reduce risk, or acquire resources. There are four diffeerent types of partnerships: a) Strategic alliances between non-competitors, b) Coopetition: strategic partnerships between competitors; c) Joint ventures to develop new businesses; d) Buyer-supplier relationships to assure reliable supplies (^{Osterwalder & Pigneur, 2010}). The motivations to do it are: reduction of risk and uncertainty, optimization and economy of scale, acquisition of particular resources and activities. Our conceptual OBM is completely supported by partnership especially in the partnership with sub-national or regional innovation systems (OECD , 2008b; ^{Cook, 2005}; ^{Beckan et al. 2004}) as well as the relationship of University-Government-Organization (Triple Helix) (^{Etzkowitz & Leydesdorff, 1995}), and recently, the society (^{Miller et al. ,2016}).

-The cost structure (CST) determines all costs incurred to operate the OBM. Creating and delivering value, maintaining customer relationships, and generating revenue all incur costs. Such costs can be calculated relatively easily after defining KYA, KYR, and PTS. There are several types of costs, such as: cost-driven, value-driven, fixed costs, variable costs, economies of scale, economies of scope. Some questions to be solved are: what are the most important costs inherent in our OBM?, which KYR are most expensive?, which KYA are most expensive?. Some authors (^{Remneland-Wikhamn & Knights, D. 2012}) have called thistransaction cost economics (TCE) and consider that has had a strong impact on theories of economic exchange but also on OBM, even though the relationship is often implicit rather than explicit. The key questions to be resolved are: who are our key partners? who are our key suppliers?, which key resources are we acquiring from partners?, which key activities do partners perform?

Hence, our hypothesis is:

H1. Higher level of BMG higher level of OBM at ITSZMG.

3.1.2 The Strategy (STR) Factor

The strategy (STR) in regard of the match to OBM is likely to be an important antecedent to open innovation performance, because the “… essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit” (^{Teece, 2010}). These set of manners are proposed in our model to be implemented as:

SOBM.- Which is aimed to determine 4 OBM strategies, according ^{Saebi & Foss (2013)}. See Table 5.

However, it still has a lot to study and learn about the implications of these strategies because, for instance user-centric OBM in the specific context of project-based firms can show negative interactions are related to the client’s attempts to reduce costs through tender-based competition to push down prices, or through contracts that push the risk onto the contractors, owing price competition with negative impact in innovation (Hopkins et al. 2010).

SIPR.- National surveys of R&D labs across the manufacturing sectors in several industrialized countries (i.e. USA and Japan) show that intraindustry R&D knowledge flows and spillovers are greater, and the appropriability of rents due for patents and intelelectual property take an strategical importance for innovation (Coehn et al. 2002). The value of the open innovation approach is now widely recognized, and the practice has been extensively researched, but still very little is known about the relative impact of firm-level and laboratory-level open innovation policies and practices on R&D performance (^{Asakawa et al. 2010}) that most be involved in an OBM, to get competitive advantage (^{Rohrbeck,et al. 2009}). Even more, the secrecy of vital process of the firm must be protected (^{OECD, 2008}).

Hence, our hypothesis is:

H2. Higher level of STR higher level of OBM at ITSZMG.

3.1.3 The Technology (TEC) Factor

It’s one of the most important factors in OBM. It’s an asset that firms use such as: technology in-licensing, technology licensing, and technology out-licensing (^{Chesbrough & Kardon-Crowter, 2006}). Based on the results, we distinguished the next variables around TEC:

TECM.- How the technology is created by the own firm's capabilities and resources, or how the firm uses its own capabilities to do alliances to get external technology and the fact to aim to own market or other markets, represent the core of the open innovation in this matter (Chesborough, 2003) and is strategic integrate it onto the OBM. Besides, acquiring external knowledge, many firms have begun to actively commercialize technology, for example, by means of out-licensing. This increase in inward and outward technology transactions reflects the new paradigm of open innovation. Most prior research into open innovation is limited to theoretical considerations and case studies, whereas other lines of research have focused either on external technology acquisition or exploitation (^{Lichtenthaler & Holger 2009}).

TECP.- Companies have historically invested in large research and development departments to drive innovation and provide sustainable growth. What is emerging is a more OBM, where companies recognize that not all good ideas will come from inside the organization and not all good ideas created within the organization can be successfully marketed internally. To date, Open Innovation concepts have been regarded as relevant primarily to “high-technology” industries. Even more, without knowing it, there are several companies that are already applying many concepts in a wide range of industries (^{Chesbrough & Kardon -Crowter, 2006}). So, it’s an important matter the regulation of how to use the technology, by mean of firm’s policies.

Hence, our hypothesis is:

H3. Higher level of TEC higher level of OBM at ITSZMG;

3.1.4 The New entrepeneurships (NWE) Factor

-The new entrepreneurships (NWE) successfully achieved are a good indicator of any OBM, such as the spin-in, spin-out and spin-off in certain period. Hence, we propose in our conceptual OBM:

-The intellectual property rights (IPR) supported by the activities, policies, process, etc. involved in the firm to create: patents, trademarks and copyrights. The effective management of IP is crucial for identifying useful external knowledge and particularly for capturing the value of a firm’s own IPR; hence, the protection of IPR attracts more attention, especially in emergent countries, because their weak reinforcement. Empirical studies on the impact of IPR of foreign R&D have generally provided evidence that the protection has a positive impact on inward R&D, especially in largest companies. However, the opposite occurs in in the SMEs that they may face greater risk in collaborations with largest companiesbecause they tipically have fewer resources and limited expertise in this issue (^{OECD, 2008}). As we saw, the IPR must be included in our conceptual OBM, because is one of the most important outcomes.

-Lean start-up (LST). It’s a term that brings together the principles of customer development, agile methodologies and lean practices. By using short and frequent cycles for tests and corrections, this approach aims at changing the way firms are built and products are designed, helping companies to succeed in a business landscape riddled with risk. Particularly, it seeks to minimize costs, waste and time to market, giving new products the best possible chance to get off the ground and into the hands of customers. Even though the lean start-up approach is still in an embryonic stage, it has attracted much attention in recent years among entrepreneurs, technologists and investors. Yet, this research topic certainly constitutes and interesting research stream to better understand the process of starting up a new venture. According to ^{Ries (2011)}, the rationale behind the lean start-up approach is to optimize the utilization of scarce resources by using smaller and faster iterations for testing a vision continuously so as to get a desired product to customers' hands faster. To accomplish this goal, lean start-ups strive to minimize the expenditure of resources for anything but the creation of value for the customer. (^{Trimi & Berbegal-Mirabent, 2012}).

Hence, our hypothesis is:

H4. Higher level of NWE higher level of OBM at ITSZMG

3.1.5 The Open Innovation Orientation (OIO) Factor

-The OI orientation (OIO). We consider is one of the most important factors in our conceptual model, because is here, where the executives can decide at the beginning with the OBM, the course of the firm of in OIN process. To achieve this, we propose

-The orientation of busines model (ORBM). Some studies show that OIN usually falls into lower performance by the definition of how the knowledge flows. In this sense, for OIN is categorized into knowledge exploration, knowledge retention, and knowledge exploitation (^{Lichtenthaler, 2009}). Firms integrate knowledge exploitation and knowledge exploration to maximize their technological capabilities and competencies (^{Lichtenthaler, 2008}). In this sense ^{Chien-Tzu & Wan Fen (2014)}, summarize that knowledge exploitation reflects: the innovation practices to systematize purposive outflows of knowledge as well as the firm’s behavior to be efficient, implementing and improving the production. By other hand, the knowledge exploration refers to: purposive inflows of knowledge as well as the firm’s behavior for discovering and experimenting due the risks that are being taken. Other exploratory studies have examined the corporate venturing as an effective means of technology acquisition (spinning in) and technology divestment (spinning out) establishing the drivers for, and benefits of, these approaches as strategic tools for deriving greater value from R&D; identifying current good practices; and understanding the barriers to progress (^{EIRMA, 2003})

-Governance (GOV) might be one of the most important variables due the participants in the OBM process may belong to organizations with different structures and goals. For instance, several large companies with R&D are usually managed through central governance system. Some OBM governance issues that may need to be addressed include ownership and decision rights, issue escalation, organizational estructure, resource commitments and potential timming, termination rights and conditions. Patners may wish to develop operating procedures thainclude standards for collecting, storing and sharing data. Establishing clear roles and responsabilities for collaboration team leaders and members for each step of the joint discovery, development, and delivery process are also important. (^{Deloitte, 2015}). Finally, all governance system must be regulated by rules of ethics. The part of ethics in our conceptual OBM consists of three principal components: expectations, perceptions and evaluations that are interconnected by five sub-components: society expects; organizational values, norms and beliefs; outcomes; society evaluates; and reconnection aspiring (Svensson & Wood, 2007).The model aspires to be highly dynamic due the continuous and an iterative process. There is no actual end of the process, but a constant reconnection to the initiation of successive process iterations of the business ethics of conceptual OBM. The principals and sub-components of the model construct the dynamics of this continuous process. Hence, our hypothesis is:

H5. Higher level of OIO higher level of OBM at ITSZMG

3.1.6 The Key performance Indicators of each factor

It is essential that measurement be timely. Today, a KPI (key performance indicators) provided to management that is more than a few days old is useless. KPIs are prepared in real time, with even weekly ones available by the next working day. Many KPI project teams will also, at first, feel that having only 10 KPIs is too restrictive and may wish to increase KPIs to 30. With careful analysis, that number will soon be reduced to the 10 suggested unless the organization is made up of many businesses from very different sectors; in that case, the 10/80/10 rule can apply to each diverse business, providing it is large enough to warrant its own KPI rollout. In this article we only require to the firms if they use some KPI because most of them are financial and confidential. Hence we propose a KPI for each factor such as: strategy (PSTR), technology (PTEC), business model management (PBMG), new entrepeneurships (PNWE) and finally, open innovation orientation (OIO) (^{Parmented, 2010}). The mentioned KPI’s could establish the relationship between outbound open innovation (indicating an inside-out process) and firm performance. In particular, it suggests that outbound open innovation may have positive and negative effects on firm performance based on potential benefits and risks of transferring technology. To what degree these effects materialize depends on internal factors .Consequently, a proficient internal management of outbound open innovation is critical to avoid its potential risks and to capture its substantial benefits. In this regard, future research may substantially deepen the insights into the relevance and role of outbound open innovation (^{Lichtenhauler, 2015}). In order to promote and ensure the performance of OBM, an assessment framework and the evaluation indicators are required (^{Chien-Tzu & Wan Fen, 2014}). All mentioned above would be serve as a feedback to control the OBM process as an Innovation Busines Model (^{Mejía et al. 2014}).

Please, see Scheme 1 for the general conceptual model and the Appendix 1 for the final detailed questionnaire.

Source: -Own

Scheme 1 General Conceptual Model