Lecture 4 Flashcards Preview

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Flashcards in Lecture 4 Deck (15):
1

What does sustainable competetive advantage mean?

  • Sustainable in the long run
  • Offshoring for example is not sustainable in the long run as it can be easily copied
  • originally it is defined as a military leader
  • Strategy gives the big picture
    • fog of war - picture not always clear
    •  

2

What is strategy defined for a company?

  • Streategic intent is the current is the long term future of a company that provides a strategic theme filled with emotions for the whole organization
    • where do we want to be in 10, 15 and 20 years?
    • What are the resources to get there?
    • How do we get there? corporate & business strategy
  • Streategy therefore defines the baseline for innovation and R&D

3

What are the main pillars of Strategy

  • Capabilities 
  • Resources

// What assets and resources for innovation do we own?

  • Technology fields
  • degree of innovation
  • Type of technology acquisition

//What technology do we use and how shall we acquire it?

  • Organizaiton of R&D

// Can we/How do we create this value internally?

  • Markets
  • Type of profit appropriation

// What value do we create for whom, and how do we appropriate it?

4

What is the innvoation framework?

  • Innovation Strategy
  • Innovation capabilities
  • Innovation process
  • Resources for innovation

5

How are resources of innovatoin defined?

  •   Financial resources

      Human resources

      Technological resources: both tangible and intangible

      Marketing resources: ownership and value of brands & access to lead markets

      Organizational resources: routines, procedures and practices

      Networking resources: partners and level of trust within them 

6

How is innovation capabilites defined?

  • Capability: organizational and managerial skills necessary to organize resources and deploy them strategically (intangible)
  • Core capability: VRIN capability (see next slide)
  • Innovative capabilities
    • Searching: seeking and assessing market and technology opportunities. (Find new things - production - maximize efficency)
    • Selecting: choosing amongst future options (Select important stuff)
    • Configuring: ensuring the coordination and integration of innovation efforts (Like Smartphone, put elements together)
    • Deploying: delivering internally generated and acquired innovations on time and to budget
    • Learning: improving the performance of innovation processes
  • Dynamic capability: capability to purposefully create, extend, modify existing resource base and capabilities. (Capability to adapt to new things) 

7

What does VRIN mean and why is it important - explain why they might be inimitable?

Which resources and capabilities have the potential to be a source of sustainable competitive advantage? 

  • Valuable

  • Rare

  • //Give competetive advantage

  • Inimitable (patents)

  • Non-substitutable (invent around)
    //sustainable advantage

  • Inimitable:

    • Tactic

    • Path dependent

    • Socially complex

    • Patents

    • Secret

    • Unique by their nature

8

Why do some companies make money while others do not?

  • market perspective (like monopoly)
  • Resource perspective (resource based view)
    • Valuable
    • Rare
    • //Give competetive advantage
    • Inimitable (patents)
    • Non-substitutable (invent around)
    • //sustainable advantage

9

What are core competencies?

  • Example honda:
    • Apples are: cars, motor cylces...
    • Technology: Electronics, CAD, mechanics
    •  

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10

What have been the core competencies of Sony and 3M?

3M:

  • applying coatings to backings
  • adhesives

Sony:

  • Rice boilers
  • electronics
  • entertainment
  • design
  •  

11

What is innovation strategy?

  • Statements on the role of innovation in creating value and building sustainable competitive advantage
  • Understanding of market trends and technological environment
  • Articulation of the firm’s innovation ambitions and long-term objectives
  • Recognition of gaps
  • Plans for developing and mobilizing resources 

12

What is not strategy?

  • Outsourcing
  • Internazionalize
  • Raise R&D budget

They are only steps for a strategy. 

Maybe goal is cost leader. Therefore high production volume and internationalization may be needed.

13

Technological Push vs. Market pull

  • Problems w. Technology Push:

     Focus on what can most easily be researched

      Scientists might be too focused on one particular solution to a problem (“their” solution)

      Possible mismatch between innovation ideas based on technology push and corporate interest 

  • Problems with Market Pull:

     Focus on most easily identified needs (but with minor potential)

     Once a technical solution to the respective need is found, one may be too focused on this particular application

     Market is locked into present products and can only think of incremental improvements 

14

What are the four level of innovation stratetgy?

  • Passive
  • Reactive
  • Active
  • Proactive

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15

Quizz:

When is a cost reducing innovation a "radical" innovation in the sense of arrow?

  • If it reduces the innovatiors marginal costs so strongyl that the innovator can set the price like a monopolist witohut any competition and still the price is below the marginal costs of other firms