Lecture 2: Product strategy

Question 1

Why do leading firms fail in terms of innovation?

Answer 1

1. Managerial inertia
2. Core capabilities becoming core rigidities

Question 2

What is managerial inertia?

Answer 2

not being able or willing to change
- Managers do not always appreciate something new coming along

Question 3

What is meant by core capabilities become core rigidities?

Answer 3

Companies develop new products the old-fashioned way.
Makes it difficult for companies to innovate/change. They are confident doing one thing, knowing the customers like it as well. Because of uncertainty not good doing something new/different

Question 4

What are important factors that decide if a company will fail or not? (according to Tripsas)

Answer 4

1. Investments in new technology
2. Technological capabilities
3. Specizlized complementary assets

Question 5

How can the article of Tripsas be compared to canibalization? (article of Hillebrand)?

Answer 5

in Tripsas’s article, caniblization can be found in the part if technological capabilities; can you leave your current capabilities behind (rigidity)

Question 6

What are two contrasting perspectives on the process of creative destruction? (Tripsas)

Answer 6

1. New entrants innovate with technologically superior products displace established firms (Schumpeter)
2. Focus on the advantages of established firms compared to new entrants (Schumpeter’s later work)

Question 7

Why do established (incumbents) firms fail?

Answer 7

Incumbents might have disadvantages;
- being to close to your customer can be harmful
- Organizational inertia may hinder innovation

Question 8

What is cannibalization (Hillebrand article)?

Answer 8

Let go of things that you have been building up things you are successful at

Question 9

What are the dimensions of caanibalization?

Answer 9

1. Willingness to canibalize previous investments
2. Willingness to canibalize capabilities
3. Willingness to canibalize sales

Question 10

What is customer orientation as defined by Hillebrand et al?

Answer 10

The degree to which a firm believes it should try to understand and satisfy current customers’ needs and wnats

Question 11

What is future market focus as defined by Hillebrand et al?

Answer 11

Firm’s prediposition of openess to new markegt trends and business models
( understand that current customers are often incapable of articulating their future needs and are not a good source for identifying potentially new customer segments

Question 12

What should firms do regrding customer focus and future market focus?

Answer 12

Combine both;
o future market focus for radical innovations (long term effect)
o customer orientation for incremental innovations (short term effect)

Question 12

What should firms do regrding customer focus and future market focus?

Answer 12

Combine both;
o future market focus for radical innovations (long term effect)
o customer orientation for incremental innovations (short term effect)

Question 13

What are solutions to overcome organizational inertia?

Answer 13

• Organize according to market requirements
• Be willing to cannibalize:
  - Focus on understanding current and future customers/customer needs

Question 14

What is the aim of Hillebrand et al’s article?

Answer 14

Investigate the differential effect of customer orientaion and future market focus on organization inertia and firm innovativeness of small and medium sized entreprises (SME) in the B2B service industry