The customer base of online gamers. The company

The term absorptive capacity refers to the ability of the firm to
identify new value both internal and external, assimilate the information, and
apply it so that the innovation capabilities can be increased. The application
of different capabilities in the innovation capacity is considered as absorptive
capacity of the firm (Pedro, 2010). In the present case, the companies should focus
on the dynamic capabilities of the organization so that they can innovate not
only for the present but also expand their capabilities in the future.

c). Currently, the firms categorize themselves in different
categories to define their innovation capabilities. The business organizations
can be categorized as ambidextrous organizations, focused on the dynamic
capabilities and absorptive capability organization. The ambidextrous
organizations are those organizations, which can efficiently manage their daily
operations along with coping with the future demands of the organization
(Kortmann, 2012). These organizations focus on both exploration and
exploitation techniques to be successful. The concept of dynamic capabilities
is associated with both resource-based and action-based view for creating an
environment related to knowledge and innovation. The dynamic capabilities are
focused on integrating, building, and reconfiguring the capabilities of an
organization to address the changing environment. It includes the
identification and adaptation to internal and external competencies (Giniuniene
& Jurksiene, 2015).

The company also has to concentrate on making alliance with the
translating companies, which can translate the computer games in different
languages. It is called localization in which the computer game is adapted
according to the local language.

Similarly, bigpoint is another video game programming company, which
is based on innovative business model and product development. The company is
tapping on the new customer base of online gamers. The company developed a
lucrative business model in which it did not create a new server, but made the
customers pay some money some money as rent. There are several benefits of
online games such as users do not have to buy new consoles, they can test
online games free and can pay if they like the game. The company has to
collaborate with the retailers such as Mediamarkt and Nintendo for the
promotion and distribution of the online games. The game manufacturing
companies have to pay a fee for using the service of the online server. With
open innovation, the companies can collaborate for the distribution of the

Beyond cooperation in terms of technology, the companies can also
seek alliance for market research and customer base development. Today, the
companies are creating new customer base as per the product. It uses marketing
to create new customer needs and offer products to address these needs.

b). In the present competitive area, the companies need to
collaborate in different areas to foster innovation. In the case of Sony, the
company needs to collaborate in different phases of the product development.
The company deals with high-end technology and requires extensive investment in
terms of finances and other resources. It can be critiqued that novel
techniques can be developed with the support and collaboration of different
business organizations. However, the firm should also consider other strategies
to foster innovation. The company should also collaborate with other leading
organizations for the innovation. The firms of same size and resourcefulness
should come together to develop new products and services (Sloane, 2011). Sony
can make alliance with its suppliers and other business partners to invest in
research and development.

The collaboration of Sony with medium and small enterprises can be
considered as open innovation as the firm is collaborating for the research and
development of the new product and technologies. There are several models of
open innovation including government collaboration and product platforming. The
collaboration of Sony with other small firms can be considered under the model
of product platform. Under this model, the firms collaborate to develop a new
product. It requires collaboration for the development of partially complete or
new product.

The open innovation is based on the fundamental that in the world of
distributed knowledge, different companies, and business organizations should
collaborate with each other for innovation. The open innovation extends to the
external sources of innovation such as customers, rival companies and other
institutions. There are several benefits of open innovation such as lesser cost
for research and development, increase in productivity, customer awareness, and
increase in the market research accuracy.

2 (a). Open innovation is a term that promotes information age and
promotes innovation in the business organizations. It encourages external
cooperation in the research and development of the organization. The term open
innovation promotes a paradigm, which enhances external and internal ideas,
collaboration in terms of market connection and advancements in technology. It
is a distributed innovation process, which can manage information flow between different
organizations (Chesbrough, 2006). Open innovation is not focused on developing
the abilities of customers, but also it should also create creative customers.
The separation between a firm and the customers blurs and the innovation can
transfer between different firms, between creative firms and it can affect the
consumers, industry, and the society.

Although patent protection is beneficial in several ways, there are
also several drawback of patent protection. The patent infringement is
enforceable by the company itself. It means that if someone infringes the
patent idea, the company has to invest more in terms of time and money to
rectify the situation. In addition to it, the patent laws are very specific;
therefore, it is not very difficult to design similar products be the competing

However, if the company is trying to give license to another
company, patent can be beneficial in creating favorable negotiation terms in
future. It can reduce the risk of legal cost to the company. The patent also
increases the confidence of the company that they are not intruding the
invention of other companies. Patent are also beneficial in the marketing of
the products. The patented products hold a high value in the eyes of the
customers (Praag & Versloot, 2008). It indicates high quality, technically advanced
products and a highly innovative company. It is also an easy way to attract
different investors to invest in the research and development division of the
company. Patent claims are also beneficial in the tax savings of the company.

1 (b). In the present case, there are several benefits of patent
protection. If a business organization is trying to manufacture and sell the
product itself without giving license to another company, patent will be
beneficial in future. It can protect the company in terms of its investment in
design, production, and marketing. It also increases the assurance that the
product is protected by the law and the government protection can be enforced
by the government.

Bigpoint is another gaming organization, which is focusing on the
development of online games. It is making huge profits due to alliance with
several companies. The company is making high profits as its games are played
by millions of users all across the globe. However, the company has to operate
in scrutiny with other companies and freelancers; therefore, patent of core
technology is very important for the organization.

There are several reasons because of which
the business organization engages in patents. The first reason is exclusive
rights, which allow the companies to exploit or reap the benefits of invention
for the upcoming years. It also assists the companies in achieving strong
market position. When an organization is bestowed with the patent, it prevents other
companies from using the invention and thereby reducing competition in the
market. In such situations, the companies can establish themselves as a strong
player. Other than that, patent also provides opportunities to sell the
invention (Anderson, 2006). If the company does not exploit the invention
itself, it can sell the product or its license to another enterprise, which can
commercialize. It can become a source of income for the enterprise. The
business organizations invest a considerable amount of money in developing
innovative products. With commercialization, the companies can get returns on
the considerable amount of time and money invested in the invention. In the
first case study, it can be critiqued that Sony was did not made efforts to
patent several of its technologies and inventions, which includes liquid color
display and Walkman. As a result, several of the competitors entered into the
field and exploited the benefits of early invention. However, several of the
technologies required high investment, which is only possible through the
collaboration of several companies. The production of LCD was only possible in
Sakai which was possible with the alliance of the two companies.

(a). The patent refers to the exclusive rights,
which are essential bestowed upon the inventor or the assignee for a limited
period. It is granted by the government or a sovereign state as a form of
protection of the intellectual property. The patent is provided in exchange for
the detailed disclosure of the invention to the public or the state government.
The patent is granted to an invention (OECD, 2011). The invention should be a
solution to a particular technical problem and should provide detailed solution
to the public-related problem. It should be as product or process.

Patenting and Possible Motives for the Companies