Globalization creates competition between global companies and local companies. Global companies are at an advantage because they are richer and can easily solve most challenges. Local companies have to prepare to eventually compete against global companies. Open innovation is an effective tool in this competition for both parties.
Open innovation collects feedback from local customers, analyzes it, and makes products which match that feedback. Local companies can use open innovation easily because they have better access and are more agile. Global companies have a harder time using open innovation locally – even with all the resources to collect all the feedback, they can not make or customize all the products.
Both global and local companies should use open innovation because it is an element of customer relationship which is quickly gaining traction. Global companies must prepare to customize products and be more valuable to customers in different localities. Local companies must use open innovation as a strong competitive advantage against global companies, but they also must make sure their customers recognize their effort.
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