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As the textbook say: The positive view of strategy is concerned with the firm’s actual strategy and how it comes to be. The normative view, on the other hand, is concerned with what the firm’s strategy should be. Positive view is actual exist but normative view is opinion based. . How do you assess innovative capabilities in a business or corporation. Innovation capabilities can be defined as the comprehensive set Of heartsickness of an organization that facilitate and support innovation strategies. Innovative capabilities exist at the business unit and corporate (multi business) levels. Business unit level audit: Timing of market entry. Technological leadership or fellowship. Scope of innovativeness. Rate of innovativeness.
Five important categories of variables influence the innovation strategies of a business: Resources available for innovative activity Capacity to understand competitors’ strategies and industry evolution with respect to innovation Capacity to understand technological developments elevate to the business unit. Structural and cultural context of the business unit affecting internal entrepreneurial behavior. Strategic management capacity to deal with internal entrepreneurial initiatives.
Corporate level audit: In general, corporate level innovate capabilities can be characterized in terms of: The scope and rate of development of new products and services and production and delivery systems that are derived from combining innovative capabilities across existing business units. The scope and rate of new business development based on corporate R and technology development efforts. The timing of entry with respect to the previous two. Five categories of variables are considered for the corporate level audit: Resource availability and allocation.
The capacity to understand multi-industry competitive strategies and evolution. The capacity to understand technological developments Corporate structural and cultural context. Corporate strategic management capacity. The assessment applies decades of experience and the real-world learning from hundreds of large-scale, high-risk, and complex innovation initiatives across a wide range of industries, geographies, and organization types. Executives need to know what resources the practice needs, why it needs them and if it gets them how it will leverage them to meet the organizations strategic objectives.
Case Study: Olio Engineering Strategic Options 1. Sell the Venture 2. License it 3. Joint Ventures (Bistros, tier 1 and 2, MEMO) 4. Go alone Selling the venture would create a capital gain Licensing it would create a revenue stream Joint venture with tier 1 & 2-? which would they pick Joint venture with MEMO – allows focus on design Go alone: find vendors, convince Memo’s, create tier 1 and 2 org Joint venture with Bistros -? use existing platform/ or a new market Issues 1. Relationship with Memo’s on Tier 1 will help accelerate the adaptation of the seats 2.
Licensing with Tier 1 creates a large market 3. Risk at 2 levels: Negotiation and bargaining process Reverse engineering by Memo’s on suppliers 4. Time to launch for Olio 5. In a joint venture, we have control over design issue 6. Global market or one region to Start 7. Profitability – tight or weak – Opinion tight because of patent – There exists a dominant design but Olio’s is cheaper – Does not have manufacturing Best move is licensing with a Tier 1 to create a Royalties stream Text up 453-465
Hand in virtually, key point summary Text up 453-465 Hand in virtually, key point summary 1. Introduction ; Concepts of intellectual Property (IP) The ownership of intangible and non-physical goods protected by various forms of property rights granted under legal vehicles, such as patents and copyrights Designed to promote creativity without unduly restricting dissemination Ex) Microprocessors, movies, computer programs, movies, photographs, paintings, sculptures and even genetically altered mice 2.
Types of Intellectual Property Rights Meanings ; The right to exclude others from producing or using the inventor’s discovery r invention for a set period of time ; To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries Requirements ; Novelty – Cannot be patented if: The invention was known or used by others in the United States before the patent applicant invented it The invention was patented or described in any printed publication, before the patent applicant invented it The invention was patented or described in a printed publication in any country more than one year prior to the inventor’s U. S. Eaten application The invention was in public use or on sale in the united States more than one year prior to the inventors U. S. Eaten application ; Useful Requires that the item is operable, since a machine that can not perform its intended purpose cannot be considered useful in the ordinary sense of the word ; Non-obviousness Sufficient difference from what has been used or described before that a person having ordinary skill in the area of technology related to the invention would not find it obvious to make the change Types ; utility patents – the most common and cover four general types of inventions or discoveries Processes: such as industrial or technical procedures, methods of doing business, and software Machines: combinations of mechanical and electrical elements, including special purpose computer systems, even if dynamically configured from a general purpose computer by software Articles of manufacture: tangible, manmade or manufactured items, generally including all products not considered “machines” or compositions of matter; they may include a CD-ROOM or other physical embodiment of a software program Compositions of matter: physical entities where the substance itself is the important element, such as chemical impositions, mixtures of ingredients and new chemical compounds ; Design patents – Protect new, original, and ornamental design for an article of manufacture ; Plant patents – protect inventors who discover and asexually reproduce any distinct and new variety of plant Development of IT ; Software had been excluded from patenting because the process of performing the program’s function involved underlying mathematical algorithms, which were considered unpalatable ; In 1 981 the United States Supreme Court held that software-related inventions could be subject to patent protection ; Copyrights Protects the particular way in which a work, such as a poem, movie or computer program is expressed ; Offers a less restrictive but far longer- lasting form of IP protection comparing with patents ; Protects only physical representation of a given work and not the ideas, concepts, procedures, processes or methods of operation that may underlie that representation ; Must be “fixed” or recorded in some format and must be original, that is, independently created by its author ; Ex) Disney’s Mackey Mouse is protected by copyright the idea itself of a fun-loving mouse is not subject to copyright
Six rights in copyrights ; Right of reproduction / Right to create derivative works / Right to distribution / Right to performance / Right to display / Right to digital transmission Development of IT ; Computer program: not copyrightable because they do not meet the minimal copyright requirement for creativity Software was subject to copyright protection in the United States after Congress passed the 1976 Copyright Act ; Trademarks ; Protected names and images that are used to label goods or services ; Ex) company or product names, images (e. G. , Mackey Mouse), logos (e. G. ,Nine’s “swoosh”), slogans (e. G. “Intel Inside”), product design and product packaging (e. G. The distinctive Coke bottle) ; Prohibit others from selling goods or services under the same or a confusingly similar name Issue ; Web-related trademark controversies, such as “supersaturates” Register identical or similar well-known names with the idea of selling them at high prices to the trademark owner or other interested parties Use well-known trademarked names in meta-tags for their sites so search engines will misdirect users to that site ; Trade Secrets ; Meanings ; Information of any sort that is valuable to its owner, not generally known, ND has been kept secret by the owner ; Information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value from not being generally known and not being readily ascertainable and is subject to reasonable efforts to maintain secrecy ; Makes it illegal to deliberately copy an established commercial idea or information that a company keeps secret Benefit of trade secrets ; If Coca-Cola’s inventor had applied for a patent on the formula for the soft drink he created in the mid-sass that patent would have expired around 903 ; By leaving the formula unpatented, Coke has been able to defend its flavor under trade secret laws 3.
Compromise and Cross License ; The gap between technology and regulation Patents and Regulation 0 can slow down technological development In the absence of clear IP ownership, companies able to negotiate solutions that enable them to exploit fast-paced technological changes Text up 66-77 Assignment 3: Discuss what is meant by Core Competence from the perspective of competition, strategic architecture and effect of underinvestment in it. Core competencies are the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. Theoretically, a core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers. It should also be hard for competitors to replicate.
From the perspective of competition, it needs not only tangible resources but intangible resources like core competences that are difficult and challenging to achieve. It is critical to manage and enhance the competences in response to industry changes in the future. Nikkei has many patents in manufacture ports equipment, it is very difficult for competitors to replicate or compete with its core competences. From the perspective of strategic architecture, senior management should spend a significant amount of its time developing a corporation wide strategic architecture that establishes objectives for Competence building. Strategic architecture is the way that a business comes together from the ground up.
The strategic architecture, created by business experts, provides a long-term view of how the organization will grow, develop and succeed, and it often includes the technology that will support the company throughout the recess. From the perspective of underinvestment, When the organization is conceived of as a multiplicity of Sable, no single business may feel responsible for maintaining a viable position in core products nor be able to justify the investment required to build world leadership in some core competence. In the absence of a more comprehensive view imposed by corporate management, SIBS managers will tend to understudies. Text pig 97-104 Management criteria for effective innovation Early in the corporate era, it may have been easy to believe that technological stability was the normal condition and technological innovation he occasional.
Motorola corporation used the transistor to expand its position in consumer electronics and then, by integration backwards, gained a significant new role as competent supplier. Here we can identify management criteria which effectively discriminate between profitable and unprofitable new technologies. Set 1: Determinants of success It could be found in technology and business contexts. In technology, the determinants would depend on appraisal Of quality and significance Of innovative concepts- like it must be new and must be good. Hence there must be embodiment for the new device, a product or system, which is eating for it. And so, Operational consequences of new technology on manufacturing, marketing, and distribution must be considered.
Set 2: Balancing old and new constraints Three questions turn out to be crucial 1 . What fundamental technical constraints limiting the prior art are lifted? This is the key technical challenge. Identify the core physical constraints underlying the previous technologies that have been lifted by the new invention and assess the significance of lifting those constraints. Example – aircraft engine. In the piston engine, upper limit in compression ratio is set o be the detonation of the fuel charge in the cylinder. A turbine engine has no such limit. It is possible to have higher compression ratio in turbine engine that makes it successful. 2 . What new technical constraints are inherent in the new art?
The first question had to do with credit side, and this question determines the debit side. This reflects what fundamental constraints limits the effectiveness of innovation. Example- in jet engines, the wake efficiency of aircraft propulsion system depends on the ratio of velocity of rearward Stream of air to the forward velocity of the aircraft; the lower the Asia , the more efficient the propulsion. A propeller, moving a large amount of cold air slowly, has a higher wake efficiency than a jet engine moving a small amount of hot air rapidly, so a new constraint exists. 3 . How favorable is relief of the former weighted against the stringiness of the latter? He net of the first two questions with respect to any inventive concept is a qualitative technical balance. The comparisons can’t be quantitative because they are not necessarily of similar characteristics; so this is highly judgmental balance, but it can be technically quite meaningful. Set 3: Putting innovation in context The management criteria, here is to analyze the embodiment in which the new technology will go to the market. The first question Is the end product enhanced by additional technology and components required to make use of innovation? This calls for analysis of the changes which must be made to a product if the innovation is to be used.
Example – every radio must have a power supply, an RFC section, an IF section, an audio section. The transistor penetrated the automobile radio as a replacement for the output power tube, but the RFC and IF sections were unaffected by the resents of germanium power transistor instead of an output power pentose; however because the output stage no longer required 300-volts B+ plate potential, it was possible to eliminate the unreliable vibrator power supplies as soon as RFC and IF tubes requiring only 1 2-volts 8+ potential were developed. These hybrid radios were much more reliable, but they could not have succeeded without 12-volt tube development.
The second is the inventive concept itself diluted or enhanced by the embodiment required? Here now analyze the effects on the innovation itself of the changes required for its use in the product. There are favorable cases where the additional art surrounding the new invention enhances its value. This is very happy situation. But there are many cases where the embodiment surrounding the new art dilutes it. The third question is -? does the additional embodiment offer opportunity for further inventive enhancement? Once more balance is needed, this time between the value added to a product and that subtracted from it by the requirements of the innovation.
Set 4: What will sell and what won’t Does the product incorporating the new technology provide enhanced effectiveness in the marketplace serving the final user? The Politicking float glass process represents a substantially more effective way of making plate glass by casting the glass against molten tin instead of grinding the surfaces; there are dramatic cost savings. But smooth glass is a smooth glass, and there is no increased effectiveness resulting from its use in windows. The process is a perfect example of innovation which made no change at all in marketplace. Does the operation reduce the cost of delivering the product or service? Taken together, this question and the earlier one are really the scissors of supply and demand, the first dealing with demand, the second with supply.
If the answer of both the questions is no, we can forget the whole thing; but if yes, then there need be little market uncertainty. The challenging case is one where one of these is positive and other is not. Does latent demand expansion or price elasticity expansion determine the characteristics of the new market? When the factor driving a market area is lower price per unit, market expansion by hundreds of percent is hard to obtain. Major expansion in revenue is much more likely when the change in the market is driven by a dramatic change in product effectiveness. This question, of course, determines the quantitative business balance. Pas 105-121 Case Summary and Questions ml_Just be submitted by following Monday Case must be done individually QUESTIONS 1 .
WHAT WAS MATRIX STRATEGY AT THE START Smaller, faster, and cheapest 3-D Chips: 2 different technologies: Using the flat panel display to enable multiple, active processing layers in Matrix 3-d chips and chemical-mechanical processing to eliminate the bumps and valley in each layer of the chip that could inhibit functionality. Breakthrough technology: team of very experienced and bright engineers. 2. WHAT WAS MATRIX CORE COMPETENCIES 1) It’s lower cost and higher performance advantage 2) Memory was field programmable memory, 3) Over 100 years of memory storage 4) Memory was compatible with existing memory card formats. 5) Company filed an extensive patent portfolio 6) Focused on non-volatile memory for large market 3.
WHAT DID THE COMPANY NEED TO DO OR NOT DO TO STAY FOCUSED ON ITS CORE COMPETENCIES The company had two main focus : 1) Designing and building a prototype of the 3-D chip , find an state-of-the-art FAA where they could create the first prototype in less than two weeks vs. 8 seeks 2) Develop the process to produce the chips in high volume, “no new atoms” process consumed a lot of their time and design their own production process since the beginning 4. IF YOU WERE DAN STEER IN 1 999 WHAT WOULD YOU RECOMMEND TO THE TEAM 1) Would advice Matrix not to hire more employees, 2) Be cautions and not let the market know about the 3-D until at least there was a prototype. 3) I would have suggested some marketing ideas that Matrix group could use to market their product once they release it to the market. 4) Do a research for a state-of-the-art manufacturing facility. 5.
Text up 855-877 Hand in virtually, ONE key point and Why In this essay, the main point is technology-enabled markets evolve through four distinct stages, each of which calls for a dramatically different strategic approach. Stage one: the early market It begins with the ambitions of two constituencies who live at opposite ends f the value chain. Neither the value chain nor the market persist past the end of the project. In the early market, customer sales are so few and far between that each effectively must be treated as a one-time event. Service providers can make money under this model, although it is a challenge to do so; product providers simply cannot. Different roles in the value chain rise to prominence and recede from it at different points in the life cycle.
Stage two: crossing the chasm into the bowling alley For technologies to gain persistent marketplace acceptance, they must cross the chasm and take up a position on the other side. To get pragmatists to move at all, companies must rethink their marketing objective from the early market. Pragmatist only feel comfortable moving in herds and evaluate the entire value chain, not just the specific product offer, when buying into a new technology. Stage three: inside the tornado A tornado occurs whenever pragmatists across a variety of market sectors all decide simultaneously that it is time to adopt a new paradigm-in other words, when the pragmatist herd stampedes.
This creates a dramatic spike in demand, vastly exceeding the currently available supply, calling entire disgorges of vendors to reconfigure their offerings to meet the needs of a new value chain. Stage four: on main street Main street begins as the market-share frenzy that drives tornado winds subsides. The overwhelming bulk of the pragmatists in the market have chosen their vendor, made their initial purchases, and rolled out the first phase of a multiphase deployment. Only a fraction of the total forecastle sales in the segment have actually been made at this point, but from here on out the market-share boundaries are relatively fixed. This has significant implications for the value chain.