Innovation Strategy and Shaping Innovation Words (Ch 3,5 ,6) Flashcards
Technological spillovers
A positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries.
Dynamic capability
A set of abilities that make a firm more agile and responsive to change.
Casually ambiguous
The relationship between a resource and the outcome it producers is poorly understood (the causal mechanism is ambiguous)
Socially complex
Resources or activities that emerge through the interaction of multiple individuals
Stakeholder
Any entity that has an interest (“stake”) in the organization
Complements
Product or services that enhance the usefulness or desirability of another product
Vertical integration
Getting into the business of one’s suppliers (backward vertical integration) or one’s buyers (forward vertical integration). For example, a firm that begins producing its own suppliers has practiced backward vertical integration and a firm that buys its distributor has practiced forward vertical integration.
Switching costs
Factors that make it difficult or expensive to change suppliers or buyers, such as investments in specialized assets to work with a particular supplier or buyer.
Entry Barriers
Conditions that make it difficult or expensive for new firms to enter an industry (government, regulation, large startup costs etc.)
Exit barriers
Costs or other commitments that make it difficult for firms to abandon an industry (large fixed assets investments, emotional commitment to the industry etc.)
Oligopolistic industries
Highly consolidated industries with a few large competitors
Enabling technologies
Component technologies that are necessary for the desirability of a given innovation.
Incumbent inertia
The tendency for incumbents to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers.
Monopoly rents
The additional returns (either higher revenues or lower costs) a firm can make from being a monopolist, such as the ability to set high prices, or the ability to lower costs through greater bargaining power over suppliers.
Late entrants
Entrants that do not enter the market until the time the product begins to penetrate the mass market or later
Early followers
Entrants that are early to market, but not first.
First movers
The first entrants to sell in a new product or service category
Increasing returns
When the rate of return (not just gross returns) from a product or process increases with the size of installed base.
Path dependency
When end results depend greatly on the event that took place leading up to the outcome. It is often impossible to reproduce the results that occur in such a situation.
Complementary goods
Additional goods and services that enable or enhance the value of another good. For example, the value of a video game console is directly related to the availability of complementary goods such as video games, peripheral devices and services such as online gaming
Installed base
The number of users of a particular good. For instance, the installed base of a particular video game console refers to the number of those consoles that are installed in homes worldwide.
Network externalities
Also termed positive consumption externalities, this is when the value of a good to a user increases with the number of other users of the same or similar good.
Absorptive capacity
The ability of an organization to recognize, assimilate and utilize new knowledge.
Discontinuous technology
A technology that fulfills a similar market by building on an entirely new knowledge base
Architectural innovation
An innovation that changes the overall design of a system of the way its components interact with each other.
Component or modular innovation
An innovation to one to more components that does not significantly affect the overall configuration of the system.
Competence enhancing (-destroying) innovation
An innovation that builds on (renders obsolete) existing knowledge and skills. Whether an innovation is competence enhancing or competence destroying depends on whose perspective is being taken. An innovation can be competence enhancing to one firm, while competence destroying for another.
Incremental innovation
An innovation that makes a relatively minor change from (or adjustment to) existing practices.
Radical innovation
An innovation that is very new and different from prior solutions.
Technological trajectory
The path a technology takes through its lifetime. This path may refer to its rate of performance improvement, its rate of diffusion or other change of interest.
