Innovation Strategy Management Lecture 6

Programme Part 1 – The basis of Innovation Part 1 – The basis of Innovation Part 2 – Innovation and New Product Development Part 2 – Innovation and New Product Development Part 3 – Innovation and Technology development Part 3 – Innovation and Technology development Part 4 – Innovation and Intellectual Property Part 4 – Innovation and Intellectual Property Part 5 – EU Green paper of Innovation Part 5 – EU Green paper of Innovation Part 6 – Innovation policies in different countries Part 6 – Innovation policies in different countries

Part 1 The Basis of innovation

Lecture 6: Business strategy and organizational knowledge II The learning organization The learning organization A conceptual approach to the generation of new business opportunities A conceptual approach to the generation of new business opportunities The degree of innovativeness The degree of innovativeness The link between innovation strategy and business strategy The link between innovation strategy and business strategy

The learning organization The future activities of the firms are strongly influenced by its previous activities The future activities of the firms are strongly influenced by its previous activities Successful companies have an ability to acquire knowledge and skills Successful companies have an ability to acquire knowledge and skills Single – loop learning Single – loop learning Double – loop learning Double – loop learning

A process of knowledge A process of knowledge accumulation + application accumulation + application How organizational structures and management strategies affect an organizations ability to innovate? How organizational structures and management strategies affect an organizations ability to innovate? flexible formsflexible forms forecastingforecasting stable communicationstable communication key individualskey individuals

critical success factors:critical success factors: – interaction with technical sources – markets – innovation as strategy – internal control system internal knowledgeinternal knowledge – accumulation model

The internal knowledge accumulation process

Informal internal consultancy Informal internal consultancy informal testing device informal testing device support – gathering device support – gathering device If the general feedback is positive, this will increase the formal backing from the business team If the general feedback is positive, this will increase the formal backing from the business team

A conceptual approach to the generation of new business opportunities A conceptual approach to the generation of new business opportunities Networks (sources of external knowledge) Networks (sources of external knowledge) Process of associating in the internal knowledge base Process of associating in the internal knowledge base Generation of business opportunities (GBO) Generation of business opportunities (GBO) – commercial opportunity – technical opportunity Complexity difficult to achieve Complexity difficult to achieve

The process of turning generation of business opportunities (GBO) into commercial success is the most fundamental issue facing businesses. The process of turning generation of business opportunities (GBO) into commercial success is the most fundamental issue facing businesses.

Conceptual framework for generating Genuine Business Opportunities

The degree of innovativeness External environment External environment Changing all the time Changing all the time Future is unknown Future is unknown Often technology is the missing element in the corporate strategy Often technology is the missing element in the corporate strategy Scientific knowledge cannot be bought like a can of tomatoes Scientific knowledge cannot be bought like a can of tomatoes

The innovation strategies Leader/offensive Leader/offensive Fast follower/defensive Fast follower/defensive Cost minimization/imitative Cost minimization/imitative Market segmentation specialist/traditional Market segmentation specialist/traditional

Leader/offensive Monopoly of the technology Monopoly of the technology Significant R&D activity Significant R&D activity Substantial marketing resources Substantial marketing resources Education about new product Education about new product

Fast follower/defensive Substantial technology base Substantial technology base Improved version of the original Improved version of the original Lower cost Lower cost Different design Different design Additional features Additional features Example: Guinnesss In-can system Example: Guinnesss In-can system

Cost minimization/imitative Low cost producer Low cost producer Exceptional skills and capabilities in production and process engineering Exceptional skills and capabilities in production and process engineering Technology is licensed (often) Technology is licensed (often) (Asian economies) (Asian economies)

Market segmentation specialist/traditional Particular market niche Particular market niche A few product changes A few product changes (Scottish whisky)

Innovative strategies in the personal computer industry

A technology strategy provides a link between innovation strategy and business strategy A technology strategy provides a link between innovation strategy and business strategy An innovation strategy is usually achieved through the management of technology An innovation strategy is usually achieved through the management of technology Important are resources Important are resources Leader strategy involves more internal R&D expenditures Leader strategy involves more internal R&D expenditures Follower strategy puts emphasis on design or manufacturing Follower strategy puts emphasis on design or manufacturing