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OVERVIEW:Business model innovation is vital to sustaining open innovation. External technology partnerships allow open business models to accomplish even more. One important mechanism for innovating one's business model is through establishing co-development relationships. The proper character of these relationships varies, depending on the context for the relationship. To sustain co-development relationships, one must carefully define the business objectives and align the business models of each firm. One should also determine whether the various R&D capabilities are core, critical or contextual. The decision to partner externally will have different implications for each of these.
Chesbrough et al. (Mon,) studied this question.