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Laurin > Strategy and Change > Flashcards

Strategy and Change Flashcards

1
Q

The strategic importance of technology: (3)

A

A. Value creation
(producing things which provide value to customers)

B. Value capture
(gaining competitive advantage/ changing competitive structure)

C. Changing the competitive structure of industry
(technologies discontinuities and significant innovations)

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2
Q

Strategic implications of innovation (3)

A

Value capture:
- Distribution channel
- Business model
- Expansion of scope

Value proposition
- Which features?
- In which form?

Resource Development
- In house or outsource?
- Data management

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3
Q

Cyclical Model of Technological Change:

A
  1. Technological discontinuity
  2. Era of ferment
  3. Dominant design
  4. Era of incremental change
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4
Q
  1. Technological discontinuity
A

Revolutionary/ breakthrough/ radical innovation

Innovations that either enhance or destroy existing competences, significantly impacting firms’ competitive positions. Discontinuities push industries forward by advancing the price versus performance frontier.

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5
Q
  1. Era of ferment (3)
A
  • Significant portion of technological progress.
  • Higher number of new designs
  • Competition (1) between technical regimes (2) within new technical regimes
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6
Q
  1. Dominant design
A
  • Result of social and organizational selection processes (1) technological merits (2) social (3) political (4) organizational factors.
  • Often not the most technologically superior initially
  • Signifies the stabilization of the industry standards and directs future incremental innovations.
  • Peak of all versions of new technology
  • A discontinuity will not itself become a dominant design
  • A single dominant design emerges following each technological discontinuity
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7
Q
  1. Era of incremental change (2)
A
  • Increase in performance and sales
  • Guiding incremental innovations until the next discontinuity
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8
Q

Social and Organizational Dynamics (4)

A

The selection of dominant designs is influenced by

  • technological merits
  • social
  • political
  • organizational factors,

highlighting the complex interplay between technological evolution and societal factors.

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9
Q

Types of Discontinuities, based on their effect on existing technological capabilities. (2)

A

A. Competence-enhancing: build on existing capabilities.

B. Competence-destroying: firms to acquire new skills and knowledge.

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10
Q

Technology lifecycle (4)

A
  1. Introduction
  2. Growth
  3. Maturity
  4. Decline
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11
Q

Disruptive Technologies: (3)

A
  1. Originates from low-end or new-market footholds.
    - Entrants may target overlooked low-segment of the market with a product considered inferior by incumbents most-demanding customers.
    - Entrants may create markets where no market exists and turn non-consumers into consumers.
  2. No catch-on with mainstream customers until quality meets their standards.
  3. Involves some business model innovation.
    - Distruption is not about technology alone, but rather the combination of technologies and business model innovation.
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12
Q

Sustaining Technologies

A

Improve product performance in ways that matter to existing customers.

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13
Q

Why large firms sometimes miss innovation (2)

A
  1. Structure (success in stable markets)
  2. Culture (fail when market shifts)
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14
Q

The innovators dilemma: (3)

A

A. According to Clayton Christensen Failure to adapt to disruptive innovation is not the result of bad management but rather a result of good management.

B. Large companies depend on their existing customers and investors for resources.

C. They listen closely to these customers and investors and kill ideas for which there is little need.

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15
Q

Managerial Implications and Strategies to be innovative

A

Creating autonomous units focused on emerging technologies and re-evaluating investment in sustaining technologies when faced with potential disruptors.

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15
Q

What are the key reasons, in your view, for Nokia’s decline during the 2000s?

A
  • High R&D investments but they did not understand the difference of the idea of a smart phone and before developed conventional phones,
  • Innovation was hardware-based—highly matrixed and complex organization.
  • Not responding to low-end Chinese competitors & not quickly enough to the treat of iPhone.
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16
Q

More broadly, why do good companies like Nokia go bad? (4)

A
  1. Disruptive technology
  2. Competency trap
  3. Binding commitments
  4. Behavioral aspects bias & arrogance
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17
Q

Wrap-up disruptive innovation

A

A. Disruptive technological innovation: lower performance than the current market demands at the higher end. But it is demanded by the low end of the market or by new market segments.

B. Incremental improvements along the demands of the mainstream market.

C. Overtime as the disruptive technology improves it begins to intersect with the needs of more demanding market segments.

-> Overshooting: Performance exceeds the specific markets needs/ not as much valued by customers.

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18
Q

Pursuing new competences characterized by:

A
  • Variation, experimentation, flexibility, risk-taking, product innovation
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19
Q

Copmany structure: (2+)

A

A. Mechanic structure:
- Operating styles (must be uniform and restricted)
- Tight control (through sophisticated control system)
- Relucant adaption (sticking to old management principles despite changes in business conditions)

B. Organic structure:
- Operating styles (vary freely)
- Loose, infromal control (with emphasis on norm cooperation)
- Free adaption (by the organization to changing circumstances)

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20
Q

How can we run our business to optimize current revenue streams but also build the foundation for future successes.

A

Past - Future
Short-termism - Long termism
Stability - Adaptability

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21
Q
  1. What is contextual ambidexterity? (2)
A

Managers capabilities to balance exploitation (optimizing) and exploration (innovating new products) within the same business unit/ team. Individuals can flexibly adapt to the environment of the project.

Organizational context:
A. Performance management (stretch/discipline)
B. Social support (support/trust)

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22
Q
  1. How is it different from structural ambidexterity?
A
  • Structural ambidexterity gives a structure in which exploration and exploitation are separated from one another but dividing it into different business units.
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23
Q
  1. Can contextual ambidexterity be implemented?
A
  • Creating a culture which supports flexibility. This can include setting clear goals regarding exploration and exploitation. Supporting knowledge exchange, innovation, and collaboration.
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24
Q

Difficulties in separation solution

A

Too much exploitation -> competency trap
Too much exploration -> failure or renewal trap

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25
Q

Summary: Christensen, C. M., & Overdorf, M. (2000). Meeting the challenge of disruptive change. Harvard Business Review, 78(2), 66-77.

A

The question is why established companies often struggle to innovate successfully in the face of disruptive changes. They have the resources and the talent; however, they apply old organizational structure and processes to new ventures. Which require different approaches. Successful implementing contextual ambidexterity depends heavily on the choice of the right team

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26
Q

Creating capabilities to cope with change: (3)

A

A. In-house
B. Spin-out
C. Acquisition

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27
Q

Use a lightweight on functional team within the existing organization

A
  • Good fit with organizations processes
  • Good (sustaining innovation) fit with organizations values
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28
Q

Use a heavyweight team within the existing organization

A
  • Poor fit with organizations processes
  • Good (sustaining innovation) fit with organizations values
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29
Q

Use a heavyweight team in a seperate spinout organization

A
  • Poor fit with organization processes
  • Poor (disruptive innovation) fit with organizational values
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30
Q

Development may occur in-house through a heavyweight team, but commercialization almost always requires a spinout-

A
  • Poor fit with organizations processes
  • Poor (disruptive innovation) fit with organizations values
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31
Q
  1. What are the characteristics of disruptive innovation?
A
  • Create a new market and eventually disrupting existing markets. They often start as lower-quality offerings, they target fewer demanding customers and improve over time.
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32
Q
  1. What does Christensen mean by ‘values?
A
  • Is the standard by which employees prioritize tasks and make decision. This influences the resource allocation and cost structure of the entire company.
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33
Q
  1. What does a heavyweight team look like?
A
  • A team dedicated exclusively to an innovation project, with complete responsibility for its success.

(1) fully time working members
(2) supports new processes and values
(3) The ability to develop new processes and values, specifically if it is different to prior projects

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34
Q

Internal corporate venturing (3)

A
  • Entrepreneurial initiatives that originate within a corporate structure
  • Intended from inception as a new business for corporation
  • Structural separated from the parent
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35
Q

Source of innovation (2)

A

Internal - Market analysis, direct research and development

External - Corporate alliances, research partnerships, open innovation, user innovation

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36
Q

Cycles of internal corporate venturing

A

Internal corporate venturing (ICV) undergoes cycles of enthusiasm followed by withdrawal.

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37
Q

Driving factors for ICV cycles (3-12 years): (4)

A
  1. ICV orphans
  2. All-out ICV drive
  3. ICV irrelevance
  4. Desperately seeking ICV
  • It highly depends on the financial health of a company and the outlook of its core business.
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38
Q
  1. All-out ICV drive
A

– Bad performance in main business and sufficient financial resources.

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39
Q
  1. ICV orphans
A

– Access to financial resources but no motivation for ICV due to good performance of the main business

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40
Q
  1. ICV irrelevance
A

– Strong business prospects and financial resources make ICV seem unnecessary

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41
Q
  1. Desperately seeking ICV
A

– Bad mainstream business prospects and financial resource constraint

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42
Q

Implication for management: More disciplined approach to ICV integrating it as continuous strategic activity rather than treating it as optional periodic effort. (3)

A

(1) Understanding strategic value of ICV

(2) Ensuring executive involvement and support, resource allocation

(3) Fostering a culture that encourages innovation.

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43
Q

Stage gate method (6)

A
  1. Idea screen: Discovery idea generation
  2. 2nd scree: Scoping
  3. Go to development: Build Business Case
  4. Go to test: Development
  5. Go to launch: Testing & validation

Post launch review: Launch

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44
Q

Downsides of state gate model and solutions

A
  • Limit flexibility and learning

-> Making gates more flexible

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45
Q

Three financial tools hindering innovation: (3)

Christensen, Kaufman, and Shih “Innovation Killers How Financial Tools Destroy Your Capacity to Do New Things” Harvard Business Review, 2008, 98-105.

A
  1. Discounted cash flow & 2. Net present value:
  2. Considering fixed and sunk costs to evaluate future investments
  3. Earnings per share (EPS): Makes companies prioritize short-term gains.
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46
Q
  1. Discounted cash flow & 2. Net present value:
A
  • Focuses on short term and predictable returns
  • Underestimate the real return of innovation investments, primarily because of two intense discounted future cash flows and diminishing value of long-term innovation benefits.
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47
Q
  1. Considering fixed and sunk costs to evaluate future investments (4)
A
  • Managers stall decisions to avoid accountability
  • Market changes faster and in different ways than asset depreciation allows us to account for
  • Focus on strategies not technologies
  • exploration exploitation dilemma / full-cost vs. marginal cost dilemma
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48
Q
  1. Earnings per share (EPS):
A
  1. Earnings per share (EPS): Makes companies prioritize short-term gains.
    - Focuses on short term stock performance and less on company’s long-term health
    - Cash is more often used to buy stock back
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49
Q
  1. What are the problems with using the stage gate method, as well as DCF, fixed/sunk costs and earnings per share measures?
A
  • Focusing too much on meeting specific criteria at each stage rather than on the dynamic learning and adoption required for breakthroughs innovation.
  • Fixed and sunk costs can discourage investment in new projects and prefer utilizing existing assets over exploring new opportunities.
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50
Q
  1. What do Sethi and Iqbal mean by “learning failure”, and how does a rigorous stage gate lead to it?
A
  • Rigorous stage-gate process might lead to barriers to experimentation and exploration.
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51
Q
  1. What is discovery-driven planning?
A

it is often possible to iterate the ideas in a plan, encouraging experimentation at lowest possible cost.

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52
Q

Clarks Three “Laws” (3)

A
  1. When distinguished but elderly scientists states that something is possible, they are almost certainly right. When they say something is impossible, they are very probably wrong.
  2. The only way to discover the limits of the possible is to venture past them into the impossible.
  3. Any sufficiently advanced technology is indistinguishable from magic
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53
Q
  1. Assess Alcatel-Lucent’s experience with its boot camps: what went well, and what could have been improved? (4)

Case study: Intrapreneurship at Alcatel-Lucent (HBR).

A

+ Participation from various departments
+ Successful projects, some of them were commercialized
+ Increased high potential employees, positive impact on employee engagement and talent development
- Resource allocation challenges,

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54
Q
  1. What does success look like for an intrapreneurial boot camp? (2)

Case study: Intrapreneurship at Alcatel-Lucent (HBR).

A
  • Innovation and value creation
  • Entrepreneurial culture
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55
Q
  1. Personal professional development, what are the elements of a successful boot camp?

Case study: Intrapreneurship at Alcatel-Lucent (HBR).

A
  • Diverse participation, supportive infrastructure, clear objectives and metrics, alignment with strategic goals, alignment with strategic goals, career pathways for participants, open and continuous communication.
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56
Q
A
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57
Q

Open innovation:

A

principles recognize the value of external R&D, the need to profit from others’ use of your IP, and the potential benefits of taking others’ innovations to market.

  • Commercializing own as well as innovations from other firms
  • To bring in-house ideas to market by deploying outside pathways
  • Boundary between involved partners is porous
  • too enable to innovations to move easily
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58
Q

Drivers of an open innovation model, where companies leverage both internal and external ideas and paths to market: (3)

A
  • Increasing mobility of highly skilled workers
  • The availability of venture capital
  • External options for ideas lying outside a company’s core business areas.
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59
Q

Changes in the business landscape due to a shift towards more open innovation:

A

This shift towards open innovation represents a more distributed, decentralized approach to R&D, where the silos of knowledge and expertise that once defined and protected market leaders are increasingly permeable. The article suggests that firms adopting open innovation can maintain a competitive edge by effectively managing and navigating the complex innovation landscape, where the integration of external and internal ideas is key to sustained success.

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60
Q

“Closed innovation” principles

A
  • the smart people in our field work for us
  • to profit from research and development (R&D), we must discover it, develop it and ship it ourselves
  • If we discover it ourselves, we will get it to market first
  • The company that gets an innovation to market first will win
  • If we create the most and the best ideas in the industry, we will win
  • We should control our innovation process, so that our competitors don’t profit from our ideas
61
Q

Open innovation principles

A
  • not all the smart people work for us. we need to work with smart people inside and outside our company
  • external R&D can create significant value, but internal R&D is needed to claim some portion of that value
  • We do not have to originate the research to profit from it
  • Building a better business model is better than getting to market first
  • If we make the best use of internal and external ideas, we will win
  • We should profit from others use of our innovation process, and we should buy others intellectual property (IP) whenever it advances our own model
62
Q

Innovation explorers

A
  • Performing in the discovery research function primirarly taken place in the R&D lab
63
Q

Innovation merchants

A
  • Focused on a narrow set of technologies codified into intellectual property & aggressively sold
  • Entities that commercialize and market innovative products or services
64
Q

Innovation architects

A
  • Create designs that simplify complex systems, allowing other companies to contribute different parts.
  • Manage innovation strategies, fostering creativity and driving organizational change.
65
Q

Innovation missionaries

A
  • Create and advance technologies to serve a cause. Not financial profits but the mission is the main motivator
66
Q

Innovation marketers (3)

A
  • Ability to make their own and others market ideas profitable
  • Identifying which outside ideas to bring in-house
  • Developing a deep understaning of current & potential needs in the market
67
Q

Innovation one-stop centers (4)

A
  • Deliver the ideas at competitive prices
  • Thriving by selling others ideas
  • Form unshakable connections to the end users
  • Managing the customers resources to the product specification
68
Q

Four generic forms of corporate venturing:

A

A: focus of entrepreneurship: (internal vs. external to the firm)

B: Presence of investment intermediation (direct vs. indirect).

69
Q

internal venturing

A

Are more activities hat result in the creation of organizational entities that reside within an organizational domain.

This involves leveraging the corporation’s resources, capabilities, and employees to innovate and develop new products, services, or business models

70
Q

external venturing

A

Refers to corporate venturing activities that result in the creation of semi-autonomous or autonomous organizational entities that reside outside the existing organizational domain.

The purpose it to access new markets, technologies, and innovation through strategic alliances, equity investments, or acquisition of external entrepreneurial firms.

71
Q

Direct investment

A

refers to cases in which the funds are allocated within the firm for the specific initiative. R&D budgets and Pilot projects are common examples.

72
Q

Indirect investment

A

refers to cases in which the investment funds are managed through an external entity such as venture capital units, or ICVs are common examples.

73
Q

Diret- Internal Venturing -OPPORTUNITIES (4)

A
  • Emergent, informal entrepreneurial behavior
  • Developing organizational capabilities
  • Creating (in) tangible resources (e.g. tacit knowledge)
  • Refreshing the corporation product mix
74
Q

Diret- Internal Venturing - CHALLENGES (3)

A
  • The most costly venturing in terms of management involvement
  • High resource commitments for employee-driven creative activities
  • Intra and inter departmental conflicts and turf wars
75
Q

Direct - External Venturing - OPPORTUNITIES (5)

A
  • Access to new markets & innovative technologies
  • Enhanced reputation of old with new economy companies
  • Potential tax benefits in certain regulatory environments
  • Enhanced potential for financial gain
  • Improved access to acquisition candidates
76
Q

Direct - External Venturing - Challenges (3)

A
  • Potential risk of damaging the corporate reputation
  • Not getting the fair share of the technology/ resources
  • Disbalance in corporate portfolio & diversification strategy
77
Q

Indirect - External Venturing - Opportunities (3)

A
  • Create and expand markets
  • Corporations due diligence costs per venture are reduced
  • Access to privacy tacit knowledge about new markets
78
Q

Indirect - External Venturing - Challenges

A
  • No direct transfer of technology, capabilities or IP-rights
  • Limited impact on strategic benefits
  • Overstated expectations on cultural changes
79
Q

Indirect - Internal Venturing - Opportunities (4)

A
  • Managed by the employees of the organization
  • Encouraging bottom-up, entrepreneurial behavior
  • Intermediary funds can buy time for the venture teams
  • Increasing the speed of introducing new ventures
80
Q

Indirect - Internal Venturing - Challenges (3)

A
  • Possibility of significant financial losses
  • Potential conflicts between new venture & established units
  • The fair sharing of the financial rewards
81
Q
  1. How to engage the different forms of Corporate Venturing in the various corporate contexts? (4)
A
  • High need for control -> direct-internal venturing
  • Spread business risk, and overcome internal capability inadequacies -> indirect-internal venturing
  • Quick strategic alliance to access new technologies or markets -> direct-external venturing
  • financial returns with limited risk -> Indirect-external venturing
82
Q

Summary of Case study: How Corporates Co-innovate with Startups: The BMW Startup Garage (INSEAD)

A

BMW embraces a strategy that included forming partnerships with startups to drive innovation and explore new business models.
BMW followed the Venture Client model (VCL) which mean that they order start ups technology, when it is still in the venture phase (before commercialization) also named minimal viable product (MVP). They do not make an equity investment into the start up.

83
Q
  1. What forces are shaping today’s auto industry? What specific challenges does the BMW Group face?
A

The auto industry is being reshaped by digital natives, global connectivity, urbanization, stricter car regulations, and a shift from hardware to software focus in cars. BMW Group faces challenges in staying competitive amidst these changes, the rise of tech players in the auto market, and the growing unpopularity of car ownership due to car-sharing services.

84
Q
  1. Discuss the evolution of BMW’s innovation process (prior to the BMW Startup Garage).
A

Before the BMW Startup Garage, BMW’s innovation process relied on in-house engineering and design, trend research, employee suggestions, and ideas from external stakeholders. The company also engaged with universities and non-traditional players, but as a technology company since 2007, BMW sought to further digitalize its operations and explore new business models to maintain its leadership in the automotive industry.

85
Q
  1. How does the VCL model work? What are the benefits and challenges?
A

The Venture Client (VCL) model allows BMW to buy technology from startups at an early stage instead of taking equity. This model offers benefits such as rapid integration of innovative solutions, attracting top startups with low fixed costs, and overcoming the slow, bureaucratic processes typical of corporate-startup engagements. Challenges include aligning startup technologies with BMW’s strategic needs and managing the inherent risks of investing in early-stage companies.

  • Under what conditions can it be beneficial to launch a new venture and market it independently of the parenting company
86
Q

Three core concepts in digital technology

A
  • Processing power
  • Communication bandwidth
  • Storage capacity
87
Q

Moores law (microchips)

A
  • The processing power doubles every 18 months
88
Q

Butters law:

A

The amount of data communicated through a single optical fiber doubles every 9 months
- Data stored per centimeter square of a hard driven doubles every 13 months

89
Q

Big data (3vs)

A
  1. Volume (quantity of generated and stored data);
  2. Variety (type and nature of the data);
  3. Velocity (the speed at which the data is generated and processes.
  • Aggrigates all information about a specific unit and can be used in various applications
90
Q

Cloud services

A
  • Offer cost reduction and hyper scalability
91
Q

Artificial intelligence

A
  • Self trained algorithms.
92
Q

The internet of things

A
  • Connected smart devices in a platform of actionable things.
93
Q

Blockchain (6)

A
  1. Static registry
  2. Identity
  3. Smart contracts
  4. Dynamic registry
  5. Payments infrastructure
  6. Other
94
Q

Smart/ connected product attributes (3)

A
  • Physical
  • Smart
  • Connectivity
95
Q

How do these smart/connected products change the industry: (4)

A
  • Transformation of products (product categories change)
  • Internal implication for firms (these products change every process in the firm, because of data availability for example.
  • New product capabilities require technology infrastructure due to data exchange, storage, analytics …
  • Implications for organizational structure: More collaboration between R&D and IT for more demand regarding data management and customer success
96
Q
  1. How do smart, connected products transform value chains?
A
  • This includes significant changes in core functions such as product development, IT, manufacturing, logistics, marketing, sales, and after-sale service
97
Q
  1. How do smart, connected products change the organizational structure?
A
  • IT and R&D are working closer together and it shifts towards a data focused approach.
98
Q
  1. How do smart, connected products change services?
A
  • Enhances predictive capabilities, customer support is more technology focused.
99
Q

Capabilities of smart, connected products: (4)

A
  1. Monitoring:
    - Allows for the comprehensive tracking of a product’s condition, operation, and external environment through sensors and data sources.
  2. Control:
    - Enables products to be controlled remotely or through built-in algorithms, facilitating customization and interaction.
  3. Optimization:
    - Utilizes monitoring data and control capabilities to enhance product performance, efficiency, and service.
  4. Autonomy:
    - Combines the above capabilities to enable products to operate independently, learn from their environment, self-diagnose service needs, and adapt to users’ preferences.
100
Q

Third wave of IT-Driven competition:

A

Is characterized by IT becoming an integral part of the product itself. Which improves product functionality and performance, driven by the integration of IT into products and the utilization of product-generated data.
*This new product type changes porters five forces.

101
Q

Availability of more information & the competitive structure of industry (SUPPLY SIDE) (3)

How do smart, connected products reshape the competitive structure of industries

A
  • Better segmentation and differentation
  • More value capture
  • More value creation
102
Q

Availability of more information & the competitive structure of industry (DEMAND SIDE) (3)

How do smart, connected products reshape the competitive structure of industries

A
  • Less (initial) switching costs
  • More negotiation power
  • More informed choice
103
Q

How do smart, connected products reshape the competitive structure of industries (4)

A
  1. More information
  2. Higher fixed costs
  3. Redefinition of industries boundaries
  4. Redefinition of value proposition
104
Q

Industry boundaries (4)

How do smart, connected products reshape the competitive structure of industries

A
  • New types of buyers & suppliers
  • The expansion of competition playground
  • Mixed effects on entry barriers
  • New substitution threats
105
Q

Value proposition (4)

How do smart, connected products reshape the competitive structure of industries

A
  • Product manufacturer
  • Value manufacturer
  • Full-service provider
  • Integrated solutions provider
106
Q

Strategic implications regarding smart connected products

A
  1. Which set of smart, connected product capabilities and features should the company pursue
  2. How much functionality should be embedded in the product and how much in the cloud
  3. Should the company pursue an open or closed system
  4. Should the company develop the full set of smart, connected product capabilities and infrastructure internal or outsource to vendors and partners?
  5. What data must the company capture, secure, and analyze to maximize the value of its offering?
  6. How does the company manage ownership and access rights to its product data
107
Q
  1. How do smart, connected products redefine the boundaries of the industry?
A

The integration of smart, connected products leads to the expansion of industry boundaries, transforming competition from being about discrete, individual products to encompassing systems of interconnected products and services. This shift broadens the scope of competition to

  • include ecosystems of products and services, redefining what industries represent and the value they deliver to customers.
  • Companies may need to reconsider their core mission and value proposition as a result.
108
Q

What describes the ecosystem:

  1. Kapoor, R. (2018). Ecosystems: broadening the locus of value creation. Journal of Organization Design, 7(1), 1-16.
A

What describes the ecosystem:

  • Complementarities
  • Interdependencies
  • Bottle necks
  • Platforms
  • Wide range of actors
    -> contributing to a product or service’s value proposition
109
Q

Ecosystems: Theoretical premise

A

A. Complementarities:
- represent an economic relationship between offers in terms of the potential for value creation (often sold together)

B. Interdependencies: represent a structural relationship between offers in terms of how a change in one offer may affect the contribution of other offers towards value creation (relying on another business to continue operations)

110
Q

Suppliers vs, complementors

A
  1. Interorganizational relation management: (governance structure vs. alignment structure)
  2. Value proposition contribution: (strong or strict vs. modular/specialized vs. generic complementarities)
  3. Organizational design: complexity (procurement & sales vs. marketing & R&D)
111
Q
  1. Is the term “ecosystem” simply a metaphor borrowed from the natural sciences to identify phenomenon, or is it a basis for new theory?
A

The term “ecosystem” in the context of business is not just a metaphor borrowed from the natural sciences. While it does identify a phenomenon, it also serves as a basis for new theory, focusing on the complex interdependencies and complementarities among diverse actors contributing to a product or service’s value proposition.

112
Q
  1. What is the difference between an ecosystem and a value chain or a supply chain?
A

The main difference lies in the scope of analysis. A value chain or supply chain focuses on linear, direct interactions primarily within a single industry, emphasizing internal firm activities and direct upstream and downstream relationships. In contrast, an ecosystem encompasses a broader array of actors from multiple industries, emphasizing the importance of external contributions, complementarities, and interdependencies in value creation.

113
Q
  1. How is research on ecosystems different from that on alliances or networks?
A

Research on ecosystems differs from that on alliances or networks by its starting point and focus. While alliances and networks research centers on voluntary cooperation among firms and the strategic advantages of such ties, ecosystem research starts with the focal offer and examines a wider array of linkages between activities and actors, including non-linear, indirect interactions that contribute to the value proposition of a product or service. Ecosystem research aims to understand the structure of technological interdependence and the coordination and alignment needed among a diverse set of actors.

114
Q

Summary

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

-> The document highlights the importance of moving from traditional value chains to broader business ecosystems where customer-centric approaches are key. Successful adaptation involves leveraging digital tools for enhanced customer insights, leading to higher growth and profit margins.

115
Q
  1. Which distinct business models are introduced in this paper? (4)

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A
  1. Suppliers
  2. Omnichannel
    Businesses
  3. Ecosystem Drivers
  4. Modular Producers.
116
Q
  1. Which type of model explains the majority of firms?

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

Among the larger companies studied, the majority were identified as Suppliers (46%), indicating that a significant portion of firms operate within another company’s value chain, providing goods or services without direct end-customer interaction or comprehensive knowledge.

117
Q
  1. How should firms develop their capabilities?

Firms should develop their capabilities by focusing on two key areas:

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

A. Enhancing Customer Knowledge: Utilizing digital capabilities to gather and analyze data on customers’ goals and life events, integrating customer insights across departments, systems, and geographies to act effectively at critical customer interaction points.

B. Becoming Part of an Ecosystem: Shifting from traditional value chains to digital ecosystems requires firms to become the preferred choice in their space, excel in building partnerships, and create service-enabled interfaces for internal and external use. This transformation involves embracing digital operations for efficiency, compliance, and innovation, aiming to meet broader customer needs through a cohesive platform of products and services.

118
Q

Omnichannel business

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

A. Complete knowledge of end consumer
B. Value chain business design

  • “owns” customer relationship
  • Multiproduct, multichannel customer experience to meet life events
  • Integrated value chain

Example: banks, retailers

119
Q

Ecosystem driver

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

A. Complete knowledge of end consumer
B. Ecosystem business design

  • Provides a branded platform
  • Ensures great customer experience
  • Plug-and-play third-party products
  • Customer knowledge from all data
  • Matches customer needs with providers
  • Extracts “rents”

Example: Amazon

120
Q

Supplier

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

A. Partial knowledge of end consumer
B. Value chain business design

  • Sells through another company
  • Potential for loss of power
  • Skills: low-cost producer, incremental innovation

Examples: insurance via agent, mutual fund via broker

121
Q

Modular producer

Weill, P., & Woerner, S. L. (2015). Thriving in an increasingly digital ecosystem. MIT Sloan Management Review.

A

A. Partial knowledge of end consumer
B. Ecosystem business design

  • Plug-and-play product/service
  • Able to adapt to any ecosystem
  • Constant innovation of product/service

Example: PayPal

122
Q

In which ICV cycles do managers actively support ICV projects by forming a new-venture division or new-business group?

A

All-out ICV drive

123
Q

Which financial tool pressures managers to focus on short-term performance and dismiss long-term-oriented innovations

A

Earnings per share

124
Q

Which solutions is recommended by christensen to create the required capabilities to cope with sustaining innvations

A

Creating capabilities internally (in-house)

125
Q

According to the XRM vision case, which f the following statements EBTST addess the main challenge of XRM

A

Managing the right balance between exploitation and exploration

126
Q

The simplest driver of ending an ICV program is

A

Failure to deliver upon the experience

127
Q

Which was NOT a reason for alcatel-lcuent discontinuing the boot campt program at the end of 2012

A

There were no boot camp products commercialized

128
Q

Why does the performance of some products overshoot even the high-end of the mainstream market?

A

Because the pace of technological progress may not match the pace of performance demanded at the high end of the market

129
Q

Radical innovations

A

Introduces groundbreaking changes and significant advancements in technology or processes.

Dramatically improves performance, creating entirely new products or categories.

(smartphone)

130
Q

According to chesbrough, which organization primarily focuses on innovation commercialization?

A

One-stop centers

131
Q

According to porter & heppelman, which additional function to organizational structure oversees product updates and enhancements?

A

DEV - OPS

132
Q

DEV - OPS

A

DevOps is the combination of cultural philosophies, practices, and tools that increases an organization’s ability to deliver applications and services at high velocity: evolving and improving products at a faster pace than organizations using traditional software development and infrastructure management processes.

133
Q

According to Porter & hepelman, which of the following suppliers of smart, connected products have LESS bargaining power

A

The supplier of physical parts of products

134
Q

In an ecosystem-based value system, how do final customers get their (expected) value?

A

By buying focal firm product and complements from individual complementors

135
Q

How are disruptive innovations different from sustaining innovations? and why incumbent firms cannot easily predict them? (4)

A

Disruptive innovation usually starts from the low-end of market (or nieche) and does not catch with mainstream and its standards

It also usually comes with a new business model and therefore has to rely on its own capabilities

136
Q

According to chesbrough,, how has the closed innovation model lost its prevalence to open innovation? (3)

A
  • mobility of knowledge workers makes it difficult to control intellectual property
  • private venture capital makes it easier to commercialize ideas that spilled outside research labs
  • Too much-accumulated finances needed and dependency on continuous internal innovation
137
Q

According to porter & heppelman, how do smart connected product reshape the rivalry among competitors (3)

A
  • More diverse value offerings shift rivalry away from prices
  • higher initial fixed cost
  • Expansion of the industry due to braoder product systems
138
Q

According to tushmann & anderson which of the following conditions explains the organizational environments after a technology discontinuity (3; exam)

A
  • Competitive uncertainty will be larger
  • Environmental munificence (generosity) will be higher
  • Growth rate of first movers will be larger
139
Q

Which of the following statements does explain the rational behind the innovtion practices of XRM visio (3; exam)

A
  • Organization learning and information sharing
  • Cross-pollination of ideas
  • The short term expectation of company shareholders from explorative strategies of hermes CEO
140
Q

According to porter & heppelmann (smart connected products) what is benefitting “stand - alone business unit” as one of the proposed transforming solutions (3)

A
  • Authority
  • Separation of resources
  • Independency from legacy business
140
Q

According to miles and coving what are corporate venturing objectives

A
  • Quick financial returns
  • Organizational development and cultural change
  • Strategic benefits / real option development
141
Q

What are principles of open innovation (3; exam)

A
  • We dont have to orginate the research in order to profit from it
  • Building a business model is bettern than getting to market first
  • Not all the smart people work for us
142
Q

According to the case of intrapreneurship at alcatel - lucent which of the following was an insight leclere gained from the defi entrepreneurial program (3; exam)

A
  • R&D was not the most important source of personnel for the boot camps
  • The age mix of the employees was surprisingly broad
  • Discovering new high potential employees
143
Q

Disruptive Innovation

A

Introduces simpler, more affordable, or more accessible solutions that initially target niche or underserved markets.

Starts with lower performance but rapidly improves, eventually disrupting and displacing established market leaders and products.

144
Q

Sustaining Innovation

A

Enhances and improves existing products or services without fundamentally changing the market.

Focuses on incremental improvements, increasing performance, efficiency, or features.

145
Q

Focal Firm

A

Acts as the main coordinator and integrator of the supply chain activities.

Often the one with contact to the customer

146
Q
  1. Technological discontinuity (2)
A
  • Either be competencies destroying/ enhancing
  • Advancing the price vs. performance frontier
147
Q

Management needs and biases (3)

Miles and Covin about corporate venturing (2002)

A
  1. Need for control of venture
  2. Ability & willingness to commit resources to venturing
  3. Entrepreneurial risk accepting propensity
148
Q

According to Miles and Covin (2002) the following are corporate venturing objective

A
  • Quick financial returns
  • Organizational development and cultural change
  • Strategic benefits/ real option development
149
Q

Venture Client Model (VCL)

A

Buys technology from start-up before it is finished and integrate it already as a supplier

  • No equity investments into the start-up
  • Immediate supplier status and purchase orders
  • Integrate innovation as fast as possible
150
Q

Corporate Venture Capital (CVC)

A

Involves equity investments into other companies to enhance the firm’s portfolio

  • Equity-linked investments in startups
  • Long-term thinking for financial and strategic benefits

Laurin (5 decks)

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