lecture 10

Question 1

Research, development and innovation

Answer 1

• Production strategies do not begin with manufacturing. They start with the research and development of new or innovative goods and services
• Innovation can be broadly divided into:
  
  • Product/service development: innovation activities, which support the creation or improvement of new products and services
  • Process development: innovation activities, which improve the way products/services are produced, making them quicker, cheaper, or better quality

Question 2

Key issues to research and development, and innovation

Answer 2

• Key issues related to R&D/innovation and organizing production:
  
  • How far should prodcuts, services, and the processes that create them should be standardised across all locations, as opposed to customising these to suit local markets?
  • Where should firms locate different innovaiton-related activities?

Question 3

Water kuemmerle: Building effective R&D capabilities abroad

Answer 3

There are several types of R&D networks

Question 4

Reasons of moving R&D abroad

Answer 4

1. Input: Tacit knowledge vs explicit knowledge - You have to be there to extract knowledge
2. Output: Take into account distance, you can only know this is if you have R&D in host country to diagnose the problem and find solutions. You might need to modify product based on characteristics in country.

Question 5

Ways of doing R&D

Original model:

Answer 5

In original model you have R&D that is docified, you transfer it abroad and you ask them to apply it the same way

Question 6

Ways of doing R&D

Home base exploiting

Answer 6

Home base exploiting= Support manufacturing facilities in foreign countries or to adapt standard product to the demand there, with information flows tot the foreign laboratory form the central lab at home. You transfer R&D and by combining this with location-bound FSA in host country - by combing this the subsidiary can adapt the standard product to local environment.

• Are close to key markets because they need to be familiar with culture. There needs to be ties between the company and the market
• Leadership is in the hands of managers of the HQ ( not someone from the host environment), you send someone there. This is to make the tie between uor culture and the new environment. You have a standard product and want to adapt it to the location
• Bounded rationality problem is reduced because the managers takes place there
• They do nout guide from the HQ, there is less distance

Question 7

Ways of doing R&D

Home base augmenting

Answer 7

Home base augmenting = act as the firm’s eyes and ears in host countries, and access knowldge form rivals. Information flows from the foreign laboratory to the central lab at home. Same as exploiting but there is also a backward flow of information - reversed transfer of non-location boud FSA. They develop a new technologhy and also use this information for other locations. You augment (vergroten) your R&D activities

• In critical knowledge cluster = there is potential to develop new products or services
• Manager is local person - these often have contacts with universities and communities, R&D facilities in the environment
• This solves the bounded rationality problem because they have the knowledge of the location.