| dc.description.abstract | Under the circumstance of the market globalization, the importance of innovation has gained gradually, but the innovation can be difficult and complicated. And it is also the core business competency for the 21st century. ＂The open innovation paradigm” brought forward by Professor Henry Chesbrough, offers a new framework of thinking for the knowledge management. The open innovation describes a model shifts from a closed to an open innovation. It breaks the boundaries among enterprises, so that the sources of innovation can be acquired exteriorly. Besides, it takes intellectual property transactions as a strategical application and creates higher added value through knowledge exchages as well.
This paper adopts individual case analysis and uses the leading companies of beauty industry, L’’Oréal and P&G, as examples, exploring the effects of open innovation business model. According to this study, L’’Oréal brings in resources of innovations and technologies exteriorly by purchasing many beauty brands. On the other hand, P&G uses the C&D strategy to connect with sources of global innovations on purpose of enhancing the efficiency and the effectiveness of business performance, to go from an closed condition to an open one, to become partnerships, and to grow together with clients outside the company, researchers and even the competitors. This paper also provides the further understanding of how L’’Oréal and P&G, which were once small companies that produced hair dyes and soaps, become famous international enterprises eventually.
Open innovation is a two-way circulation of knowledge and technologies for both inside and outside the enterprises. It evaluates the qualities of products and services, changing the way how enterprises grow. It is truly a revolutionary key point that solves the problem of deficient resources and it is not constrained by boundaries and time.
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