CHALLENGES FOR PRODUCT AND SERVICE PROVIDERS IN OPEN INNOVATION WITH CUSTOMERS IN BUSINESS-TO-BUSINESS MARKETS

Abstract

The purpose of this paper is to empirically study challenges faced by product and service providers when innovating openly with customers in business-to-business (B-to-B) markets. The study aims to fill the research gap of how the challenges vary in different types of customer involvement in innovation. The work applied the qualitative methodology of multiple case studies, and the material was collected in semi-structured interviews with management personnel at 48 companies in Finland and in the Netherlands that are practicing open innovation with their customers in one form or another. For the analysis of challenges identified from the empirical data, a typology of open innovation with customers was built, resulting in four distinct types to categorise product and service providers through their dominant business and innovation logics and related customer involvement. The typology gave the context in which strategic and operational challenges of open innovation with customers were explored. Each of the four types seems to have specific and characteristic challenges of open innovation. The findings of the study will help managers of product and service providers in guiding their open innovation practices with customers in B-to-B markets.