MOI Innovation Strategy Framework
Prof. V.Seshadri NMIMS
2.1 Developing the framework 2.2 Positions National & Competitive environment 2.3 Paths- Exploiting technological trajecteries 2.4 Processes Leveraging R&D; 2.5 Processes - Allocating resources
Porf.V.Seshadri, MOI- Innovation Strategy
1. Joe Tidd, John Bessant and Keith Pavitt;Managing Innovation integrating technological, market and organizational change; 3rd ed.; Wiley India. 2. John E Ettlie, Managing Innovation new technology, new products and new services in a global economy,, Rochester Institute of Technology 3. Harward Business Essentials, Managing Creativity and Innovation , Harward Business School 2003 4. Shlomo Maital & DVR Seshadri, Innovation Management Strategies, Concepts & Tools for Growth & Profit 5. Robert A Bungerman & Madisto A Maiidique; Strategic Management of Technology and Innovation; Irwin
MOI - Prof.V.Seshadri
Ane Books India .Bruton. Management of Technology & Innovation .Seshadri 4
. Mc Graw Hill 9. 2007
MOI .V. Curtis R.Khalil. Wilmot. Cengage learning. 2006 10. Carlson & William W. Innovation.
6. 2007 8. Management of Technology. Wolfgang Grulke with Gus Silver.References contd. Innovation and Entrepreneurship Harper & Row.Khurana. Margret A White & Garry D.V. K. Crown Business.Prof. Dr. Prentice Hall. NY 7. Tarek M. 1985. The Management of Technology and Innovation. 2001 11. Lessons in Radical Innovation. Peter Drucker.
What is Strategy?
Strategy is a coordinated set of actions that fulfill a firm s objectives.Innovation Strategy.V. Ref 11 Ch 2 5
. purposes and goals Strategic Management is an on-going process in which the organization (org) defines the nature of the businesses in which the firm will be active.Seshadri. the kind of economic and human org it intends to be and the nature of contributions it intends to make to it s various constituents
Porf.Seshadri.Levels of Strategy
VISION & MISSION CORPORATE STRATEGY
FUNCTIONAL .Innovation Strategy Ref 11 Ch 2
both internally and externally.V.Central role of Technology in strategic management
Strategic management is critical and it helps the entire org move towards consistent goals Technology is considered throughout the stategic process.Seshadri.
Seshadri. To be successful any firm needs five or six capabilities in which it is superior to it s competitors.Innovation Strategy Ref 11 Ch 2 8
Capabilities are skills that a firm develops. MOI. It is from these capabilities that the firm s integration of technology with strategic concerns should begin. It is these capabilities that are at the root of the firm s competitive advantage over competitors
Technical 2.Seshadri.Innovation Strategy
There are 2 areas of capabilities: 1. MOI.
preserve or develop the technologies The strategic decision is implemented through people. MOI.V.Innovation Strategy
. Firm may decide strategically to either destroy. structure and processes.Seshadri.
How the firm approaches technologies it has or wishes to have.
Knowledge and skills pertaining to Market forces and customers are important.Seshadri. MOI.V.
Porf. This is called technological innovation strategy.tech area or activity.Seshadri. Only then will it lead to a sustainable and tangible benefit. the firm is said to have a technology advantage. Ref 11 Ch 2 12
. MOI. The activity/area of competitive advantage should be something that the other firms cannot easily duplicate (cost . Firms seek to use this technology advantage towards an innovative venture to launch a new product/process /service.V. performance or quality) and something that the customer really values. E. When the competitive advantage involves a hi.g faster processing by a new computer chip.Competitive Advantage
A competitive advantage is something a firm does better than any of its competition.
Ensure broad participation and informal channels of communication 3. Ref 1 Ch 3 13
.Guidelines for strategy formation process
1.V. Expect to change strategies in the light of new evidence
Porf. Explore the implications of a range of possible future trends 2. debate and skepticism 4.Seshadri. Encourage the use of multiple sources of information. MOI.Innovation Strategy.
A Strategy to deliberately accumulate such knowledge 3. An internal structure that balances potentially conflicting requirements
Porf.Innovation Strategy essential features
1.Innovation Strategy Ref 1 Ch 3 14
. Ability to cope with threats from external environment 4.Seshadri. MOI. Firm-specific knowledge and the capacity to exploit it 2.V.
A firm s capabilities is one of the important basis for deciding the technological innovation strategy. a firm needs to define and implement an innovation strategy. It can adopt one of two approaches for this purpose.
Porf.V. At the corporate level.Innovation Strategy Ref 1 Ch 3 15
. MOI. A firm generally strives to build on those areas where it has competitive advantage.Seshadri.
Approaches for mobilization of technology for the purpose of creating a corporate innovation strategy Rationalist Strategy Incrementalist Strategy
Carry on the decided course of action Such a a linear process is usually followed in the military. but is not always successful in the complex corporate context. Describe.Rationalist Strategy
It consists of the following steps 1. ( may use SWOT) 2.V. Determine a course of action in the light of the analysis 3.
Porf.Seshadri. analyze and understand the environment.Innovation Strategy 17
Ref 1 Ch 3 18
.Innovation Strategy.V. Adjust the objectives (if necessary) and decide on the next step (change)
Porf. MOI. The alternative incrementalist strategy involves 1. this is usually very limited. Measure and evaluate the effects of the steps (changes) 3. However. Make deliberate steps towards the stated objectives 2.Incrementalist Strategy
Rationalist approach assumes a complete understanding of the present and emerging future.Seshadri.
.Seshadri.V.Incrementalist strategy (ex: for medical doctors)
Symptom Diagnosis Treatment
.Incrementalist strategy (ex: for product/process innovations)
Design Development Test
The strategic process in MTI Porter s Model
The strategic process of a firm is made up of three principle activities. 1.Innovation Strategy Ref 11 Ch 2 21
.Seshadri.V. Evaluation and control These activities go on concurrently and are an ongoing internal process.
Porf. Planning consist of: 1) Data gathering 2) Mission generation 3) Objective seeking and 4) Strategy establishment Porters Industry model is a useful tool for gathering and organizing information for planning the strategy of a firm in relation to the industry in which it operates. Planning 2. MOI. Implementation 3.
Porter s Industry Model
Porter proposed a five forces analysis.V. The model builds on industrial organization s economics to analyze how various parties influence an industry
Porf.Innovation Strategy Ref 11 Ch 2
New entrants 4. Rivalry amongst established firms
Porf.Five forces driving industry competition . MOI. Relations with buyers 3.Innovation Strategy Ref 1 cH 3 23
. Relations with suppliers.Seshadri. the unit of analysis is the industry producing similar products.V. The goal of competitive strategy is to find a position in the industry where a firm can best defend itself against these competitive forces. Substitute products 5. 2.Porter
According to Porter. The five forces driving industry competition are: 1.
A sixth force: COMPLIMENTORS is now added to examine technology focused concerns
Porf. firms must choose from generic market strategies.Innovation Strategy Ref 1 Ch 3 24
. MOI.Seshadri. Porters approach situates the firm s technological activities in a wider context of industry competition.V. He developed a systematic SWOT analysis for this purpose.Porters Approach
Porter linked technology to the five forces driving industry competition. In each of these areas.
Seshadri.V. Product Differentiation / Differentiation focus
Porf. Cost leadership/ Cost focus 2.Generic Market Strategies -Porter
According to Porter. a firm has to decide on which market strategy it is going to adopt: 1. MOI.Innovation Strategy Ref 1 Ch 3
Ref 1 Ch 3
.Generic strategies for firms .Porter
cost leadership differentiation
Product Development Product Development Process development Process development Process development Lower material inputs Ease of manufacture New logistics Minimize cost Enhance quality/features Niche market Precision quality control Miniaturization
Economies of Response time scale Porf.V.
V. MOI.Seshadri.Innovation Strategy.Threats and Opportunities from changes in technology -Porter
Potential Entrants and Substitute Products:
Increased threat Increased threat Reduced threat Reduced threat No economies of scale Telecommunication Publishing Substitute Products Lock-in to technological standards Patent and Legal protection Aluminum cans in place of Steel cans Microsoft
Major ethical drugs
Porf. Ref 1 Ch 3
Seshadri.Threats and Opportunities from changes in technology -Porter
Power of Suppliers over Buyers
Increased Innovations in key Microprocessors in threat components computers
Innovations that reduce dependence
Threats and Opportunities from changes in technology -Porter
Rivalry amongst established firms
Increased Innovations in key Polaroid in instant Threat of areas photography monopoly
Reduced Imitation in key threat of area monopoly
GE in brain scanners
Porf.Innovation Strategy Ref 1 Ch 3
MOI.V.Seshadri.Innovation Strategy Ref 1 Ch 3
.Leadership vs Followership -Porter
A firm should decide which market strategy it intends to follow: Innovation leadership or Innovation followership
Weak in chemical. degree of employee commitment and receptiveness to novelty 3) Technological weaknesses 4) Strong in certain sectors like machinery. electronics and transport
Porf. speed of decision making. MOI.V. instruments and software.Seshadri.Innovation strategy in small firms
Small companies have the following charecteristics: 1) Similar objectives to develop and technological and other competencies to provide superior products and services.Innovation Strategy Ref 1 Ch 3 31
. 2) Org strengths: ease of communication.
John Bessant and Keith Pavitt
. MOI.Innovation Strategy.2 Misleading assertions about innovation in small firms
Porf.V.Seshadri.Table 3. Ref 1 Ch 3 ©2005 Joe Tidd.