Creating worldwide innovation and learning

Question 1

List the forms of Innovation

Answer 1

New technology based products
Organizational effectiveness breakthroughs
Pioneering marketing strategies
Leading-edge manufacturing processes
Logistics innovations

Question 2

Three key capabilities of innovation

Answer 2

Sensing
Responding
Implementing

Question 3

List Two classical traditional innovation processes

Answer 3

Center-for-global

Local-for-Local

Question 4

Describe Center-for-global

Answer 4

• Dominates in international and global companies
• Headquarters senses opportunities
• Strategy decided centrally, executed locally
• Centralized assets + resources of parent company used to create product/service

Question 5

Describe Local-for-Local traditional innovation

Answer 5

• Fits with multinational
• National units sense local needs
• Local implementation
• Distributed assets/resources allow local response

Question 6

Disadvantages of Center-for-global

Answer 6

• Market insensitivity
• resistance of local / subsidiary mgmt
• competitive adv of home market may fade

Question 7

Disadvantages of local for local

Answer 7

• Risk of duplication

- ineffeicient

Question 8

List the methods of transnational innovation

Answer 8

Locally leveraged

Globally linked

Question 9

What is locally leveraged

Answer 9

• Special resources and capabilities of national subsidiary available to other subsidiaries

Question 10

What is globally linked

Answer 10

Resources and capabilities of many units pooled to jointly create and manage activity

Question 11

List points of value creations

Answer 11

Best practices transfers
Cross selling
Cross pollination
Bold Ideas

Question 12

How to make transnational process feasible, what are the assumptions that should be updated

Answer 12

1. Symmetry to Differentiation
   - integration and responsiveness separate for each business, function, and geographic region
2. Dependence/Independence to Interdependence
   - Implement integrated network, and inter unit integration mechanism
3. Simple control to Flexible control
   - formalization, centralization, and socialization process

Question 13

What is reverse innovation

Answer 13

• Develop products for markets in emerging economies then selling them in developed markets

Question 14

Why is reverse innovation important

Answer 14

Emerging markets are not small and have high growth rates

Local companies can enter developed markets with low-cost alternatives

Glocalization ignored, middle/lower end customer segment

Question 15

What does reverse innovation require

Answer 15

Decentralization
Centralizatation
- both need to cooperate

Question 16

What is the Reverse innovation method

Answer 16

Establish local growth teams

• Shift power to where growth is (authority to produce/sell etc)
• Build new offerings from ground up
• Buil LGT from ground up
• Customize objectives, targets, measure
• Report to someone high in organization

Question 17

What are the challenges to manage foreign R&D in China

Answer 17

1. Recruiting
   - R&D more attractive in China
   - greater benefits + opportunities
2. Intellectual Property
   - IP Regime has strengthened
   - Reduces freedom to operate
3. Sharing tech comes with risks
   - Chineses companies supported by state learn quick and upgrade
4. Innovation transaction costs
   - Chinese companies have lower costs due to relationships with state
5. Time to Market
   - quality standards and strict internal processes increases time

Question 18

How should foreign companies react to increasingly innovative Chinese companies

Answer 18

1. Strike a better balance between localization and growing liability of foreigness
   - have local faces in mgmt
   - reorientation of company allowing Chinese to innovate
2. Speed up patents
   - More colab between r&D and IP mgmt functions
3. Engage in innovation in China when returns exceed global risks
   - conduct advanced innovation in CHina only if global operations drive local competition
4. Focus talent, culture, and operations to faster TTM
   - review culture and process
   - shorten decision paths and faster experimentation cycles