Innovation strategy - Lecture 3 Flashcards
On which level is Porter’s model based?
Industry level
What are the four components of Porter’s model. And what do they tell me?
1) Potential entrants (threat of new entrants)
2) Buyers (bargaining power of buyers)
3) Substitutes (threat of substitute products or services)
4) Suppliers (bargaining power of suppliers)
What is the difference between costs strategies and differentiation strategies?
Costs strategies are being the most competitive in your market, while differentiation strategies are providing different products.
When a company has low market power which side of innovation are they likely to implement
Cost innovations
What are the elements of the PESTEL model?
1) Political
2) Economic
3) Social
4) Technological
5) Environmental
6) Legal
What does “the environment only sets boundaries” mean? And give examples
It means that although companies are in the same environment they still can have a different strategy. Mcdonalds and Michelin restaurant.
What are the questions regarding RBV?
1) Is this resource valuable?
2) Is this resource rare?
3) Is this resource inimitable?
4) Is this resource organized?
What do you have when you can answer yes to all the questions of RBV?
Competitive advantage
Explain the letters of SWOT
1) Strength
2) Weaknesses
3) Opportunities
4) Threats
Which letters of SWOT are based on internal and which are based on the environment
Internal: Strength and Weaknesses
Environment: Opportunities and Threats
Which model is related to the internal components of SWOT and which model is related to the environment components of SWOT?
Strength and Weaknesses are related to the resource based view model (RBV) and the Opportunities and Threats are based on the Five forces model
To which letters is PESTEL relating to?
To Opportunities and Threats
What are ways to not be copied (inimitable)?
Secrecy (coca cola), Patents (medicines),
Lead times & Learning curves (tesla), and Tacit knowledge (design by apple)
What does lead times mean?
For example tesla, they produce a car but have way more knowledge of electric cars, so when the competitors are going to copy they will be far ahead.
What is tacit knowledge?
It is the knowledge that is difficult to express or attract. For example the feel of an Iphone design
What is dynamic capability?
The capability of an organization to purposefully adapt an organization’s resource base.
What is a tangible resource?
A building, a machine
What is an intangible resource?
Brand, IP
What is important regarding strategy?
That you don’t focus only on your own resources, but also look at what your competitors are doing
What does the lecturer mean with covering the beach? And give an example
That a company should offer multiple versions of the same product to eliminate competitor from copying. Iphone 6 and Iphone 6 plus
Why is profit maximization (on the short run) not always a smart move?
Because you need to think ahead of what my competitor could do
Why is being flexible not always a smart move?
Because you competitor could see this as weakness
What are the moving lessons?
1) Firms may deter entry by taking demand (covering the whole beach)
2) Firms may deter entry by a credible commitment
3) First moving can be, but is not always, a strategic advantage
Why are you better off by not moving first?
Because then you can see what your competitors will do and react to that
What are the components of the implementation phase?
1) Product (change the thing)
2) Process (change the way)
3) Position (change the context)
4) Paradigm (change the system)
