presentation5 (2)

21
Agenda Objectives of the paper Highlights on open innovation Case study: Collaboration between NMB and Vodacom Lessons from the case study Conclusion 30.05.2014

Upload: otto-muba

Post on 26-Jan-2017

119 views

Category:

Economy & Finance


0 download

TRANSCRIPT

Page 1: Presentation5 (2)

AgendaObjectives of the paper

Highlights on open innovation

Case study: Collaboration between NMB and Vodacom

Lessons from the case study

Conclusion

30.05.2014

Page 2: Presentation5 (2)

Redefining distribution channels through open innovation

Lessons from Mobile Financial Services in Tanzania

Authors:Otto M. Muba and Deodat E. Mwesiumo

Valenova Foundation

THE 14TH INTERNATIONAL CONFERENCE ON AFRICAN ENTREPRENEURSHIP AND SMALL BUSINESS (ICAESB)White Sands Hotel May 29th and 30th 2014, Dar es Salaam, Tanzania

Page 3: Presentation5 (2)

To illustrate open innovation in a developing country context

To draw lessons from the case relevant for SMEs

1

2

Page 4: Presentation5 (2)

Highlights on open innovation

What is it?

Commercialization of external (as well as internal) ideas by deploying outside (as well as in-house) pathways to the market (Chesbrough, 2003).

Page 5: Presentation5 (2)

The mechanism

Systematic acquisition and exploitation of resources and capabilities for innovation undertaken both internally and externally (Lichtenthaler, 2008)

Page 6: Presentation5 (2)

Potential benefits of open innovation

Potential for reducing innovation costs and risks (Belderbos et al., 2004)

Potential for reducing challenges of adaptation to dynamic environments (Dittrich and Duysters, 2007)

Potential for accessing and leveraging external complementary resources (Miotti and Sachwald, 2003)

Potential for generating higher revenues(Faems et al., 2005)

Page 7: Presentation5 (2)

Potential pitfalls of open innovation

Source: Enkel et al. (2009)

Leakage of knowledge

Higher coordination costs

Loss of control

Increased complexity

Page 8: Presentation5 (2)

Case study:

The partnership between NMB and Vodacom

Page 9: Presentation5 (2)

Key facts

Fully-fledged commercial bank listed on DSE

149 branches: present in 124 of 134 administrative districts

The largest branch network: 34% of all bank branches in Tanzania

Page 10: Presentation5 (2)

NMB old innovation approach

Closed innovation

Page 11: Presentation5 (2)

Key facts

Leading telecommunication company in Tanzania by number of subscriptions.

10,288,972 subscriptions as per December 2013.

The first to introduce Mobile financial services in the country: M-Pesa.

Extensive network of agents: of over 40,000 agents countrywide.

Page 12: Presentation5 (2)

The partnershibetwp

Rapid growth of Mobile Financial Services changed business landscape in retail financial services

NMB realized that in order to cope with the changes innovation was inevitable

NMB could hardly develop on its own a fully-fledged Mobile Financial Services

Being the leading mobile network operator, Vodacom became an obvious choice for NMB

Page 13: Presentation5 (2)

The partnershibetwp

The partnership became reality on 28th February 2013

This meant over 40,000 agents of Vodacom M-Pesa became part of NMB distribution chain

The service would enable more than 729,000 NMB customers to make transactions via M-Pesa

Page 14: Presentation5 (2)

The mechanism o of the partnershi betwp

Open innovation model

Page 15: Presentation5 (2)

Implications of the partnership

The collaboration demonstrates how firms can exploit external linkages in persuasion of market opportunities

The case illustrates feasibility of open innovation in a developing country and service sector contexts.

All parties involved will benefit from the partnership: NMB, Vodacom, Customers and regulatory authorities

Page 16: Presentation5 (2)

Lessons relevant for SMEs

SMEs should tap into the external knowledge and expertise.

Open innovation works even for SMEs (van de Vrande et al. 2009).

Through collaborations SMEs can mobilize their technological and marketing opportunities (Chesbrough, 2003, 2007).

Collaborations can increase the chances of SMEs to access financial resources.

Page 17: Presentation5 (2)

Lessons relevant for SMEs

Type of innovation

Motivations of the potential partners

The business model.

SMEs that intend to collaborate on innovation should carefully assess the potentiality and feasibility. Things to watch:

Source: Boudreau and Lakhani (2009)

Page 18: Presentation5 (2)

Other sources of open innovation for SMEs

Academic institutions

Research centers

Government agencies

Liefner et al.(2006); Biggs and Shah(2006); Kaminski et al. (2008)

Page 19: Presentation5 (2)

Lessons for policy makers

SMEs need deliberate policy-based support for creating the right atmosphere for innovation

Public procurement could promote innovation by prioritizing innovative offerings tabled by SMEs

Encouraging SMEs to submit bids in groups

Page 20: Presentation5 (2)

Conclusion

The case shows that open innovation is one of the ways firms can use to exploit market opportunities

And even SMEs in developing countries can access and leverage resources beyond their boundary thus accelerate their growth and indeed their role in economic growth

Page 21: Presentation5 (2)

THANK YOU!