L05 L: INNOVATION STRATEGY

Question 1

Innovation activities are influenced by four elements which are (clock wise)

Answer 1

• strategic intent
• market pull
• Autonomous initiatives
• technology push

Question 1

Innovation strategy

Answer 1

• provides direction for organizations future
• important as a framework to guide innovation process

Why: value creation
What: innovation opportunities
How: Innovation approach

Question 2

Sources for strategy:

Answer 2

Internal:
- strength
- weaknesses

External:
- threat
- opportunities

Question 3

Mintzberg argues that two thing lead to the “realized strategy” What are these two things?

Answer 3

1. The intended strategy splits into deliberate (done consciously and intentionally) strategies (strategic intent) and non-realized strategies –> (strategic intent
2. emergent strategies –> (autonomous initiatives)

Together they form the realized strategies

Question 4

Strategic intent (Deliberate)

Answer 4

• formulating opportunity areas (emergent business areas; strategic context)
• shaping organizational context
• direction through resource allocation
• portfolio management

Question 5

autonomous Initiatives (emergent)

Answer 5

• ideas to realize opportunity areas
• shaping strategic direction

Question 6

Explain using what a portfolio its role and on what the structure can be based.

Answer 6

Portfolio is an overview of innovation activities.

Role of portfolio:
- evaluate current innovation activities
- guide resource allocation decisions
- Identify areas for improvement

Structure on which portfolio can be based:
- Incremental vs radical
- Time horizon (long vs short term)
- opportunity areas
- progress in the innovation process
- risk
- potential rewards

Question 7

What are the four sources of uncertainty?

Answer 7

• Technological uncertainty
• market uncertainty
• organizational uncertainty
• resource uncertainty

Question 8

What are the three types of uncertainty?

Answer 8

(1) Risk
- known distribution
- unknown draw

(2) Uncertainty
- Unknown distribution
- unknown draw

(3) Radical uncertainty
- “unknown unknowns”

Question 9

Uncertainty and resource allocation

Answer 9

The higher the uncertainty the lower the amount of resources will be allocated. Over time as uncertainty decreases more resources will be allocated to the innovation.

Question 10

4 APPROACHES FOR DEALING WITH UNCERTAINTY
(BASED ON WILTBANK ET AL. 2006)

Answer 10

Four key approaches for strategic managers:

(1) Planning (causation) (GO: H / MB: Low)
(2) Learning & adaptation (discovery driven planning)
(3) Visionary (breakthrough)
(4) Transformative (effectuation & bricolage)

Question 11

Goal oriented prediction

Answer 11

This concerns whether strategic management assumes if the future is either predictable or not. (What does the future look like?)

Question 12

Means - based control

Answer 12

This concerns whether strategic management assumes if the future environment is controllable or not (Can we change the environment?)

Question 13

Goal oriented prediction high / means-based control low

Answer 13

Planning (causation):
The management assumes the environment is beyond their control and predictable, investing in predictive techniques that allow them to position favorably for the future –> planning strategies

Question 14

Goal oriented prediction low / means-based control low

Answer 14

Learning & adoption (discovery driven planning)
The management assumes the environment is not predictable and can not be influenced. Here management shortens their planning horizons, and invest in flexible strategies that effectively respond to changes in the environment –> adaptive strategies

Question 15

Goal oriented prediction high / means-based control high

Answer 15

Visionary (breakthrough)
Here the management assumes the environment is predictable and is malleable. They impose their vision of the future, shaping the environment to achieve the desired outcomes. –> visionary strategies

Question 16

Goal oriented prediction low / means-based control high

Answer 16

Transformative (effectuation & bricolage)
They assume future environmental factors are largely non-existent, and seek to create them through cooperation and goal creation with others to imagine possible futures extending from current means—we call these transformative strategies.

Question 17

SCALING FOR DIGITAL VENTURES

Answer 17

Need for scaling
▪ Low margins
▪ Network effects

Enabling scaling
▪ Building upon digital infrastructures
▪ Limited human involvement and material use

Increasing speed
▪ Rapid scaling
▪ Blitzscaling