Please enable JavaScript.
Coggle requires JavaScript to display documents.
[ASM] G2_Growth Through Innovation (Determining an Innovation Strategy…
[ASM] G2_Growth Through Innovation
Introduction
Definition
Develop new ways to create and deliver value
Importance
Hallmark of market based economies - Drives economy grow
Opportunity to grow and avoid creative destruction precess
Difficulty
R&D is large capital investment - 80% are spent by established firms
Hard to calculate ROI of R&D
NPV is hard to predict
More capital expanse can't guarantee more innovations
Breakthrough products are rarely mandated
Innovation strategies
Innovator Strategy
Creating new products and service
Capture a valuable market position
Fast follower strategy
Avoid some costs and risks of innovation and imitate first mover
Leverage complementary capabilities to out-compete rivals
Which strategies is best???
A firm's innovative capability
A firm 's ability to approprite gains from innovation
Developing an innovative capability
What drives an organization's innovative capability???
Creating a climate to generate and pursue novel ideas
provide mechanisms for information
provide incentives to innovate
need to encourage free flows of information
give freedom to fail
Designing an effective development process
it includes selecting and articulating clear product concepts
need to think organization of tasks
team composition and tenure of people????
think about coordination(alliances)
Assimilating knowledge generated outside the boundaries of the firms
it's recognizing that important knowledge
basic research is often a public good residing
Keys to innovation
integrate diverse knowledge
establishing effective lines of communication
create cross functional teams
create broad vision and shared values
manage expectations
Provide motivation for innovation
invest in creative search ( ex:R&D)
establish high-powered upside incentives for innovating
give greater ownership to managers
encourage risk taking by sharing responsibility
Build absorptive capacity
invest in basic or leading edge research
Reward individuals on the basis of their standing outside the firm- and to allow publication
Take part in joint ventures or industry concortia that keep the firm
in the loop
Give away key ideas in order to be a player
Encourage diversity
Organizing innovation
Caution
No single beat way to organize
Each way of organizing has pros and cons
Beat way depends on competition, rate of technological change, industry, complexity of product, time to market
Can be organized in a number of ways
Chaotic
easiest way, starups
more creative
best for breakthrough products
less control
too much conflict
Sequential
ensures that each step will be executed
good when high uncertainty about project
good when lots of time is available
good when market environment is stable
bad for speed and responsiveness
bad for accumulated learning
concurrent (project)
learning improves within team and firm
much faster than sequential processes
best for evolving incremental products
big time commitment from team
front-loaded resource intensity
not a
home run
strategy(?
Overlapping
motivates team
limits hand-off problems
large amount of effort to implement
Appropiating value from innovation
Ability to protect intellectual property
Control of important complementary assets
IP Protection
Ability to protect IP is strong when
Legal protection is strong
First-mover advantages are substantial
Diffusion among customers is fast
Imitation by competitor is difficult
Often Difficult to Protect because
Secrecy is hard to maintain
Tacit knowledge gets diffused eventually
Legal Protection can be difficult to acquire & enforce
Values may be created by a collection of advance
Complementary assets
translate an innovation into commercial returns
With the cooperation of certain assets, the product to be developed has the value to be used.
importance
asset
specialized
innovation unilaterally depends on the asset
asset unilaterally depends on the innovation
cospecialized
bilateral dependence
both rely on each others
innovation
whether that asset is tightly held
tightly held
rare and hard for someone to substitute for
freely available
easy to build or develop
Determining an Innovation Strategy
strong IP protection,
generic complementary assets
Innovator
weak IP protection,
specialized complementary assets
party with bargaining power
Asset degree held
by non-innovator
low
innovator
asset depends on innovation
high
asset holder
innovation depends on the asset
weak protection,
specialized complementary assets
holder of complementary assets
weak IP protection,
generic complementary asset
difficult to earn profit
Innovator lacks off assets
strong IP Protection
integrate (acquisition, licensing)
weak IP Protection
decision tree
the importance of innovation
innovative capability
IP regime
the right complementary asset
wether complementary asset is widely available