Lecture 11 Flashcards
Corporate accelerators
- a subset of startup programs
- offers cohorts of startups, mentoring, educations, access to specific resources, funding
key elements of Startup supplier programs & CA
- short term
- engage startup in a joint project
- provide mentors from top management
strategic scope CA
objective: pursue multiple goals
value proposition: establish a business, develop a business model, funding, access to corporate resources, mentoring
type: early stage
strategic scope startup supplier programs
objective: integrate entrepreneurial innovations into the corporate’s core business
value proposition: become an official supplier
type: mid/later stage
program content CA
- focus: development of first prototype
- application procedure: cohorts, application dates
- duration: 3-6 months
- organizational setup: internal with other established firms, or with a professional provider
- number of startups: limited to the # of relationships managers
- main contact: innovation manager
- end of program: demo day with a pitch in front of VC
program content startup supplier programs
- focus: customization of technology
- application procedure: continuous
- duration: flexible 1-6months
- organizational setup: internal
- number of startups: unlimited
- main contact: manager from core business
- end of program: pitch in front of decision makers from BU
provided resources CA
- financial: fixed amount of money
- education: startup related
- networking: internally within corporate, externally with alumni
- product related: prototyping facilities, co working, space
provided resources startup supplier programs
- financial: flexible payments
- education: corporate related
- networking: decision makers in customer business units
- product related: testing and production facilities
stage gate process advantages
- overview of innovation and product development portfolio
- help managers to rank projects
- reduce risk of putting too many resources into wrong projects
4 stages and 3 gates
stage 1: identification gate 1: pre selection stage 2: internal matchmaking gate 2: market fit stage 3: pilot project gate 3: pilot evaluation stage 4: transfer into the new supply base
stage 1 identification
- identify promising startups
- two strategies:
1. screen the market for suitable startups
2. invite to submit innovation proposals
gate 1: pre selection
- sort out startups that do not meet the requirements
- after assessing the skills of a startup the focus shifts to the technology it offers
stage 2: internal matchmaking
- connect startups with a division
- common issue: gap between startups units and actual customer
gate 2: market fit
- evaluate whether startup represents a viable business case
- those that manage to convince at least one BU go on to the next stage
stage 3 pilot project
- customize technology to customer requirements
- reduce information asymmetries since it is an opportunity to assess a startup capabilities directly
gate 3 pilot evaluation
if the pilot is successful they source the startup to start a new product development project
stage 4 transfer into the new supply base
- transition stage
- supplier collaboration moves to the standard processes used for established suppliers
- two paths:
1. directly initiate the sourcing process
2. collaborate on follow up product development project which may result in sourcing
implications
- integrating different internal startup activities
- preparing purchasing for its new role
- fostering exchange with external entrepreneurial ecosystems
integrating different internal startup activities
complement, integrate and reinforce startup engagement and collaboration models
preparing purchasing for its new role
effective measure to ensure established firms will not become late majority customers by involving purchasing into startup collaborations
fostering exchange with external entrepreneurial ecosystems
improve firms visibility to external startup ecosystems and help firms to participate and exchange more actively with the most important players
hybrid structure
mix of centralized and decentralized structure
corporate procurement officer
senior executive responsible for the management and co-ordination of key purchasing and supply processes throughout the corporate organization
purchasing as an operational activity
purchasing department low in the hierarchy
purchasing as a competitive factor
purchasing department high in the hierarchy
levels of task, responsibilities, and authority
- strategic
- tactical
- operational
strategic level
- purchasing decisions that influence the market position of the company in the long run
tactical level
involvement of the purchasing function affecting product, process and supplier selection
medium term impact
cross functional
operational level
- all activities related to the ordering and expediting function
- related to the requisition to pay process
organizational structures within purchasing
- centralized
- decentralized
- hybrid
- line/staff organization
- category/sourcing structure
centralized
advantage
- better conditions from suppliers can be achieved
- facilitate efforts towards product and supplier standardization
disadvantages
- management of individual business units has limited responsibility for decisions on purchasing
appropriate when several business units buy the same product
decentralized
- all BU managers are responsible for their financial results of their purchasing activities
- disadvantage: different BU may negotiate with the same suppliers for the same product
hybrid structure
efforts aimed at combining common materials requirements among two or more operating units - major characteristics voluntary co-ordination lead buyer ship lead design concept
line/staff organization
may serve as a vehicle to facilitate co-ordination issues between divisions or business units
mainly for very large international companies
category/sourcing structure
- common among large international companies
- purchasing components organized through divisional global procurement executives
- key factors to improve global sourcing:
- strong leadership
- active involvement of management
- formalized supplier management
- corporate commodity plans
- cross functional teams
- standardization of logistics and delivery processes
category sourcing managers
lead the global sourcing teams that are responsible for developing and executing the company’s product related and non related spend categories
Corporate buyers
focused on very specialized tasks
responsible for developing corporate sourcing strategies for key commodities
purchasing engineers
working at a decentralized level
project buyers
deal with investment goods
materials planner
responsible for materials planning and ordering
manage inventory and monitor control suppliers on their quality and delivery performance
NPR buyers
responsible for buying non-product related goods and services
factors determining the optimal organizational form at the organizational level
- demand specifications (similarity –> centralization)
- supply market characteristics (globalization –> centralization)
- corporate coherence (coherence –> centralization)
- purchasing maturity (maturity –> hybrid)
- competitive strategy (cost focus –> centralization)
advantages of decentralized purchasing
- direct responsibility of operating companies
- stronger orientation towards internal and external customer
- less bureaucratic procedures
- less friction costs
- direct communication with suppliers
disadvantages of decentralized purchasing
- dispersed purchasing power
- no uniform way of handling suppliers
- scattered supply market research
- limited possibilities for building up specific expertise on purchasing
- different purchasing conditions
