Assignment 1: Discuss the difference between Positive vs. Normative Views How do you assess innovative capabilities in a business/corporation
1. Discuss the difference between Positive vs. Normative Views As the textbook say:
The positive view of strategy is concerned with the firm’s actual strategy and how it comes to be. The normative view, on the other hand, is concerned with what the firm’s strategy should be. Positive view is actual exist but normative view is opinion based.
2. How do you assess innovative capabilities in a business or corporation.
Innovation capabilities can be defined as the comprehensive set of characteristics of an organization that facilitate and support innovation strategies. Innovative capabilities exist at the business unit and corporate (multibusiness) levels.
Business unit level audit:
Timing of market entry.
Technological leadership or followership.
Scope of innovativeness.
Rate of innovativeness.
Five important categories of variables influence the innovation strategies of a business: Resources available for innovative activity
Capacity to understand competitors’ strategies and industry evolution with respect to innovation Capacity to understand technological developments relevant to the business unit. Structural and cultural context of the business unit affecting internal entrepreneurial behavior. Strategic management capacity to deal with internal entrepreneurial initiatives.
Corporate level audit:
In general, corporate level innovate capabilities can be characterized in terms of: The scope and rate of development of new products and services and production and delivery systems that are derived from combining innovative capabilities across existing business units. The scope and rate of new business development based on corporate R&D and technology development efforts. The timing of entry with respect to the previous two.
Five categories of variables are considered for the corporate level audit: Resource availability and allocation.
The capacity to understand multi-industry competitive strategies and evolution. The capacity to understand technological developments
Corporate structural and cultural context.
Corporate strategic management capacity.
The assessment applies decades of experience and the real-world learning from hundreds of large-scale, high-risk, and complex innovation initiatives across a wide range of industries, geographies, and organization types. Executives need to know what resources the practise needs, why it needs them and if it gets them how it will leverage them to meet the organisations strategic objectives.
Case Study: Elio Engineering
1. Sell the Venture
2. License it
3. Joint Ventures (Bastrom, tier 1 and 2, OEM)
4. Go alone
Selling the venture would create a capital gain
Licensing it would create a revenue stream
Joint venture with tier 1 & 2 – which would they pick
Joint venture with OEM – allows focus on design
Go alone: find vendors, convince OEM’s, create tier 1 and 2 org Joint venture with Bostrom – use existing platform/ or a new market
1. Relationship with OEM’s on Tier 1 will help accelerate the adaptation of the seats 2. Licensing with Tier 1 creates a large market
3. Risk at 2 levels:
- Negotiation and bargaining process
- Reverse engineering by OEM’s on suppliers 4. Time to launch for Elio
5. In a joint venture, we have control over design issue
6. Global market or one region to start
7. Appropriability – tight or weak
- Opinion tight because of patent
- There exists a dominant design but Elio’s is cheaper
- Does not have manufacturing
Best move is licensing with a Tier 1 to create a Royalties stream
Text pp 453-465
Hand in virtually, key point summary
Text pp 453-465 Hand in virtually, key point summary
◆ Concepts of intellectual Property (IP)
♦ The ownership of intangible and non-physical goods
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