Journal of Strategic Management Studies
Online ISSN : 2434-124X
Print ISSN : 1883-9843
Invited papers
Platform Strategy under Psychological Resistance to Open Source—Toward Software Innovation among SMEs
Jun Nakamura
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2020 Volume 12 Issue 1 Pages 27-40

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Abstract

It has been a while since Japanese enterprises experienced downturns and faced issues due to low profitability. In the field of software, it is generally acknowledged that open source concepts are desirable in terms of both cost reduction and effectiveness. However, companies tend to have a certain degree of ‘psychological resistance’ to the use of open source tools. In comparison to western enterprises, Japanese businesses lag far behind in this regard.

Therefore, referring to the case of Google, the author analyzed how open source can be used as an open strategy based on a framework comprising strategy and resources (capability). The author found that Google adopts both open and closed strategies. The open strategy makes sure that Google can thoroughly utilize contributions, and this provides a mechanism by which stakeholders can reduce costs and use Google apps without transferring money along the supply chain. The closed strategy clarifies which elements can be differentiated to maintain market competitivity and concentrates profit sources in these areas.

The implication of this is that Google ambidextrously uses both open and closed strategies, and that the management responsible for the realization of these strategies is functioning well. In other words, the business model promoted by Google is admirable, comprehensively using both platform and dynamic capability strategies, thus combining sources of revenue and resources to make the most effective use of open source.

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© 2020 The International Academy of Strategic Management
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