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〔ASM〕G4-BGS-Growing through Innovation (Innovation (Strategy…
〔ASM〕G4-BGS-Growing through Innovation
Organizing for Innovation
Concurrent
Helps with learning and improving
Faster than the sequential
Very resource intensive
Best for the evolving incremental products
Require a big time commitment
Sequential
Ensured each step will be executed
Good when high uncertainty about project
Good when lots of time and the market environment is stable
Bad for speed and responsiveness,
Bad for accumulated learning
overlapping
Very motivating
Requires a large amount of effort to implement
Limits hand-off problems
Chaotic
Little bureaucracy
More creative
Disorder and conflict
Very difficult to control
Loosely structured
Innovation
Why innovation is important?
Economic growth
Creative destruction
No strategic position is sustainable in the long run
Difficulty
Spending on R&D
ROI is difficult to access.
Definition: The development of new ways to create and deliver value.
who innovates?
Strategy
Follower(second mover) strategy
Avoid some costs and risks
Imitate the first movers
which is best?
Whether a firm has innovative capability to begin with?
Firm's ability to appropriate the gains
Innovator(first mover) strategy
Create new products and services
Developing an innovative Capability
Ideal development path
Investigate
Develop
Concept
Product
What drives an org innovation capbility?
Create a climate to generate &persude ideas
clear the product concept
org of tasks
team composition and tenure
alliance
Designing an effective development ideas
provide incentive to innovate
provide mechanisms for information exchange
give freedom to fall
encourage free flows of information
Open innovation
Acquisition(M&A,Licensing)
R&D,NPD
CVC,Alliance
Intellectual Property
when IP Strong?
Legal Protection
patents
copyright
Trademark
First mover
Learning curve effect
customer loyalty
network externalities
Why IP often difficult to protect
Legal Protection
secrecy is hard to maintain
knowledge get diffused
value collection of advance
Determining an Innovation Strategy
Thinking questions to decide for innovation
Do we have an innovative capability
Yes
Is intellectual property regime strict
Yes
Complementary Assets have or not
No
Are widely assets available
2 more items...
Yes
Commercialize
No
imitate strategy
No
Second mover strategy
Who get the profit?/Innovator lacking the assets can do
Party with Bargaining Power/ License or Integrate
Strong IP Protection,Held specialized Assets
No one/No good option
Weak IP Protection,Generic Complementary Assets
Innovator/ Use market
Strong IP Protection,Generic Complementary Assets
Complementary Assets holders/ Integrate
Weak IP Protection,Held specialized Assets
Who has bargaining power?
Two factors decision
Ratio of dependence of Innovation on assets
The degree to which non-innovators own assets
Who
Assets holders
Innovator
Keys to innovation
Provide motivation for innovation
Share responsibility
Give greater ownership for managers
Encourage divetsity
Invest in creative search
Build absorptive capacity
Invest in basic or leading edge search
Joint venture
Integrate diverse knowledge
Broad vision and share values
Cross functional teams
Effective communication
Manage expectation
Complementary Assets
Definition
The assets are necessary to translate an innovation into commercial returns
Role of complementary assets
Degree of the dependence between the assets and innovation
Co-specialized
Bilateral dependence
Generic
Low dependence of the assets and the innovation
Specialized
Unilaterally depends on the assets or innovation
How to get the complementary assets
Tightly held
Rare
Hard to imitate or substitute for
Freely available
May be purchased on the market
Easy to develop
Team members
Flora
Willy
Vendy
Debby
Sharon
Iris