**1. Introduction**

The disruptive changes of the 4th Industrial Revolution (4th IR) era have resulted in fierce competition between companies, big or small, focused on supply chain management activities, such as transporting primary and secondary products. However, these activities are non-valve adding to products; instead, there are significant opportunities for cost reduction. On the other hand, Global Original Equipment Manufacturers (OEMs) seek advanced operational strategies that capacitate the approach towards their target markets while reducing distances, decreasing production costs, on-time delivery, reducing cycle times, and thus improving the overall process and product quality [1]. To respond to the disruptive changes caused by the 4th IR, these big international players have established local subsidiaries to support them in producing automobiles in other countries and position themselves better to access their markets. The benefits derived include government subsidies from the host country, local skilled labour, appropriate infrastructure, and low production costs [2].

Since ACMs are pivotal in the manufacturing supply chain, they face unique challenges of lack of resources, dynamic capabilities, and vulnerabilities in the industry. These challenges result in technical stoppages or unplanned shutdowns, leading to loss of working time, hindering workers from keeping their jobs and companies from retaining skilled human resources. Thus, besides ACMs maintaining their employees, their revenue is significantly compromised and negatively impacts competitiveness. This problem has necessitated management to develop alternatives such as new products and services. This new product development process enables companies to increase their income, become more competitive, and avoid the frequent loss of highly skilled workers, curtailing unintended knowledge transfer.

## **2. Problem statement**

The main markets for ACMs have diminished due to financial crises and the numerous operational challenges they have to overcome. These firms face impermanent shutdowns or technical stoppages in avoiding job losses and retaining valued skilled human resources, notwithstanding the challenges of the 4th IR, which emanate from adopting a big-picture perspective of business and processes to integrate different needs across departments and workers into one common goal. Industry 4.0 brings entirely new capabilities to operations managers, allowing them to respond faster to critical situations and improve on multiple KPIs. The price of holding on to their human resources reduces financial income or risks total work stoppage. This problem has resulted in top managers adopting innovation and developing new products manufactured with the existing infrastructure, robust organisational structure, advanced production systems and competent workforce. Inevitably, the benefits of new product development are an increase in income, competitiveness and retention of highly skilled workers, and managing knowledge transfer. As such, this study sought to compile and categorise the application of OI in the context of the new product development in the 4 IR era by answering the following Research Questions RQs:

RO1: What impact of open innovation strategies on new product development prospects in the 4 IR era?

RO2: What proposed contextual open innovation strategies model will apply to automotive component manufacturers?

The study contributes to the current body of knowledge by addressing the gap that exists in the literature on open innovation strategies by exploring how ACMs in a developing country such as South Africa approach new product development initiatives to escape the intense competition of today's global economy when responding to the competitiveness issues. Open innovation strategies identified in the study impact the competitiveness of the ACMs industry, which plays a vital role in the overall South African economy. The study also identifies how South African ACMs adopt open innovation strategies and the benefits. The field of competitive strategies is dynamic;

*Open Innovation Strategies on New Product and Process Development Prospects: A Case… DOI: http://dx.doi.org/10.5772/intechopen.105035*

thus, the study provides new insights into new product development and the concept of open innovation strategies, which can assist practitioners in developing appropriate open innovation strategies to mitigate new product development challenges and boost competitiveness.

The chapter first reviews available literature on ACMs, open innovation strategies and the benefits to new product development, followed by a description of the research design and methodology, a report of the findings, recommendations and subsequent conclusions.
