Innovation strategy - Lecture 3

Question 1

On which level is Porter’s model based?

Answer 1

Industry level

Question 2

What are the four components of Porter’s model. And what do they tell me?

Answer 2

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)

Question 3

What is the difference between costs strategies and differentiation strategies?

Answer 3

Costs strategies are being the most competitive in your market, while differentiation strategies are providing different products.

Question 4

When a company has low market power which side of innovation are they likely to implement

Answer 4

Cost innovations

Question 5

What are the elements of the PESTEL model?

Answer 5

1) Political
2) Economic
3) Social
4) Technological
5) Environmental
6) Legal

Question 6

What does “the environment only sets boundaries” mean? And give examples

Answer 6

It means that although companies are in the same environment they still can have a different strategy. Mcdonalds and Michelin restaurant.

Question 7

What are the questions regarding RBV?

Answer 7

1) Is this resource valuable?
2) Is this resource rare?
3) Is this resource inimitable?
4) Is this resource organized?

Question 8

What do you have when you can answer yes to all the questions of RBV?

Answer 8

Competitive advantage

Question 9

Explain the letters of SWOT

Answer 9

1) Strength
2) Weaknesses
3) Opportunities
4) Threats

Question 10

Which letters of SWOT are based on internal and which are based on the environment

Answer 10

Internal: Strength and Weaknesses
Environment: Opportunities and Threats

Question 11

Which model is related to the internal components of SWOT and which model is related to the environment components of SWOT?

Answer 11

Strength and Weaknesses are related to the resource based view model (RBV) and the Opportunities and Threats are based on the Five forces model

Question 12

To which letters is PESTEL relating to?

Answer 12

To Opportunities and Threats

Question 13

What are ways to not be copied (inimitable)?

Answer 13

Secrecy (coca cola), Patents (medicines),
Lead times & Learning curves (tesla), and Tacit knowledge (design by apple)

Question 14

What does lead times mean?

Answer 14

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.

Question 15

What is tacit knowledge?

Answer 15

It is the knowledge that is difficult to express or attract. For example the feel of an Iphone design

Question 16

What is dynamic capability?

Answer 16

The capability of an organization to purposefully adapt an organization’s resource base.

Question 17

What is a tangible resource?

Answer 17

A building, a machine

Question 18

What is an intangible resource?

Answer 18

Brand, IP

Question 19

What is important regarding strategy?

Answer 19

That you don’t focus only on your own resources, but also look at what your competitors are doing

Question 20

What does the lecturer mean with covering the beach? And give an example

Answer 20

That a company should offer multiple versions of the same product to eliminate competitor from copying. Iphone 6 and Iphone 6 plus

Question 21

Why is profit maximization (on the short run) not always a smart move?

Answer 21

Because you need to think ahead of what my competitor could do

Question 22

Why is being flexible not always a smart move?

Answer 22

Because you competitor could see this as weakness

Question 23

What are the moving lessons?

Answer 23

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

Question 24

Why are you better off by not moving first?

Answer 24

Because then you can see what your competitors will do and react to that

Question 25

What are the components of the implementation phase?

Answer 25

1) Product (change the thing)
2) Process (change the way)
3) Position (change the context)
4) Paradigm (change the system)