2 Strategy & Technology Dynamics Flashcards
Learning Objective: Innovation in industry 1. Technological discontinuities and disruptive innovation 2. Strategy in turbulent environments
Similarly, Schumpeter defines innovation (5)
Innovation as a ”new combination” of
resource
- ”… the introduction of new goods …,
- new methods of production …
- the opening of new markets …,
- the conquest of new sources of supply …
- and the carrying out of a new organization of any industry”
Invention vs. innovation (Definition)
Invention
- The conversion of cash into ideas
- Inventors spent money to create his inventions, but unable to monetize them
Innovation
- The conversion of ideas into cash
- Innovators bring ideas to the market, and make money from these ideas
Product
&
process innovation
(Digramm)
< ergänzen >
Innovation in Industry,
sources of product differentiation (3)
Product and Market Expansion
(R&D)
- New product features
- New product mix
- New location and increased presence
Strategic Partnerships and Complexity
(Stakeholder Management)
- New links with other firms
- Linkages between functions and complexity
Timing and Reputation
(Sales)
- Timing
- Enhanced reputation
Issues, navigating the innovation process (2)
Innovation processes,
efficiently manage and select ideas. (V-Modell)
- These processes often conflict with entrepreneurial thinking.
- Coordination costs and required modifications usually compromise the original idea.
The technology s-curve
Discontinuity as one s-curve taking over another
Rules of thumb for detecting
technological discontinuities (4)
1. Decline in R&D Productivity
- Management feels R&D productivity is declining.
- Apparent loss of productivity in R&D and industry-wide.
- R&D deadlines are increasingly missed.
- Dissatisfaction with a “new broom” R&D manager’s performance.
2. Shifts in R&D Focus
- Shift from product to process-oriented R&D.
- Sales growth sources shifting to narrower market segments.
3. Internal Challenges
- Dissension among R&D staff.
4. Industry Trends
- Significant variation in R&D spending among incumbent firms.
- Smaller, weaker firms in the industry investing in radically new technologies.
The disruption has already happened
(~8 examples)
Impact of disruptive technologies on barriers to entry (~6)