Chapter 9 - Strategic innovation Flashcards
Define strategic innovation
strategic innovation is the process of changing a firm’s business model to create or to defend a sustainable advantage.
Elaborate on the issue of strategic renewal
Strategic renewal is about the issue of maintaining the continuous (ir discont in case of rev perpsective) development of the business model so that the firm is able to retain its edge. The motivation behind the chapter is that some firms survive for hundreds of years, while others live less than the average human. We track this issue down to whether the firm is able to compete or not. And we know that this is a problem regarding the competitive advantage, which is ultimately decided by the business model. We need to make sure that the business model is “updated” in a good way. What constitutes as a “good way” will be subjective, and is the main topic of this issue.
Strategic renewal is extremely difficult. However it is necessary to remain relevant as a n organization.
The reason why it is so difficult, can be tracked down to 4 different topics:
1) Creating
2) entrprenouring
3) Changing
4) Investing
elaborate on what strategic renewal consists of
Crucial for understanding the difficulty with it.
1) Creating process.This is about having the creativity to update cognitive maps. This is essential for being able to not stagnate and see new ways to solve problems.
2) Entrepreneurial process. Combining resources into new ways. Using the cognitive maps to create new shit.
3) Change process. We know how difficulot change can be, and renewal is naturally a change process.
4) Investment process. we can say that renewal require resources and a leap of faith. Can be difficult to obtain.
elaborate on inhibitors of strategic innovation
1) Effects of innovation results. this refer to how organizations have cognitive maps that are already very built. It is difficult to overturn them. this means that mature firms will struggle to try something out that they might have tried before with low success etc.
2) Inertia and bias. This is primarily about missing big breakthroughs in technology within the industry.
3) the effect of feedback.
elaborate on the paradox
exploitation vs exploration
There are 2 demands:
1) THe demand for sustained renewal. This is the incremental changes to the business model that strengthen the competitive position.
2) The demand for disruptive renwal. This is introducing new technologies and business model.s
elaborate on the demand for sustained renewal
sustained renewal refer to the continuous improvemnt of the current products and services. It will strenghten the competitive position. With the assumption that firms does this, everyone needs to do this to maintain the edge.
elaborate on the demand for disruptive renewal
Current competititve positions are challenged by introducing new technologies and business models. This will force competitors to follow new rules, where we have the upper hand.
elaborate on the paradox and the perspectives
It is basically the same as the paradox of choice and complience.
We are battling between improving our current business model (following the rules of the industry) vs creating new ones that hopefully are industry changing (creating new business models that shape the rules).
The strategic improvement perspective advocates for continuous improvement of current model. They point out that there are benefits of sucesss for the risky routes, but these routes are very risky. It is simply a better allocation of resources to use it on the improvement rather than renewal.
On the other hand, the radical rejuvenation perspective
