L5 Flashcards
Innovation Strategy.
Why important?
- Provides direction of organizational future
- Important framework to guide the innovation process
Role of portfolios:
- evaluate current innovation activities
- guide resource allocation decisions
- Identify areas for improvement
Goal-oriented control through prediction =
Goal-oriented control through prediction
= “To the extent we can predict the future, we can control it”
Means-based control =
Means-based control
= “To the extent we can control the future, we do not need to predict it”
SCALING FOR DIGITAL VENTURES
When is there a need for scaling?
When is there a need for scaling?
- Low Margins
- Network effects
SCALING FOR DIGITAL VENTURES
Enabling Scaling:
Enabling Scaling:
- Building upon digital infrastructure
- Limited human involvement and material use
Versatile resources =
Versatile resource: (In contrast to RB-view)
* The more versatile the venture’s resources are …
* …the lower adjustment cost firms face, as versatile resources invite for reuse, recombination, and removal of barriers of learning
= assets that can be changed for different purposes, they increase a firm’s combinative possibilities and thus expand its productive opportunity set.
Versatility of the digital core of digital ventures
.. can be traced to two aspects of digital technology.
Two aspects of digital technology that allow for Low adjustment cost
Versatility of digital core of digital ventures can be traced to two aspects of digital technology:
LEADING TO: low adjustment cost
1. Design Flexibility
The stored program concept: programmability offers significant design flexibility as the product can be repurposed with as little as a new set of instructions
- Design Scalability:
Digital content such as data and instructions are reproducible at zero marginal cost (scope for scaling)
Digital Ventures =
Digital Ventures = enterprises with a digital artefact at the core of their market offering.
Digital core = digital artefact.
- It can be a platform, algorithms, voice recognition technology, or any other pieces of technology.
- For instance, Uber: driver-rider matching algorithm
Resource-based view:
Resource-based view: Isolate the competitive advantage of resources at the expense of flexibility required for future resources reconfiguration
The Extension Process
Based on two main entrepreneurial processes:
The Extension Process
Based on two main entrepreneurial processes:
- Productive Opportunity Creation
= the development of business opportunities in unserved market segments through entrepreneurial imagination - Opportunity Actualization
= to the realization of productive opportunities through managerial action.
Productive Opportunity Creation + Opportunity Actualization
Possible implications:
Possible implications for productive opportunity creation and actualization
- Digital ventures can create a multitude of entrepreneurial opportunity with a low adjustment cost at a short time (related to design flexibility of core).
* Digital core can develop one line of business, while developing another. - Digital core promises to facilitate opportunity actualization, as it allows effective re-use of prior versions in the new market.
* The combination of effortless re-production and design flexibility promises quicker and speediar actualization of productive opportunities
The Process of Concepting =
Concepting = the deployment of the digital core in designing and experimenting business concepts for a new venture
Process of Porting
Porting = the specialization of a venture’s digital templates to actualize productive opportunities with minimal adjustment cost.
Process of Generalizing
Generalizing = the creation and refinement of general solutions for specific sub-problems that can be reused and adapted in the development of derivative digital products.
