Notes - Quick Overview

8/22/2019 Notes - Quick Overview

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Session 1 Overall strategy

Grant, R. M (1997)

The concept of Strategy

General text about the concept strategy. Only 10-30 percent of realized stragey consist of

intended strategy, rest is due to emergent strategy (see Mintzberg).Critic of Mintzberg on

page 22. Levels of strategy: Corporate, Business and Functional (page 20).

Aim of strategy is to guide management decisions toward superior performance through

establishing competitive advantage. To act as a vehicle for communication and coordination

within an organization.

Strategic fit is important - consistent with firm goals and values, fit with the externalenvironment, fit with resources and capabilities.

Tags: Emergent strategy, Intended strategy, Realized strategy, Unifying theme, Four factors

of successful strategy, Criticize swot, Strategic fit

Teece, D.J., G. Pisano and A. Shuen (1997

Dynamic Capabilities and Strategic Management

Critic of Porter. Concept of Dynamic capabilites developed. Focus on path dependencies, andability to shift when external things like rapid change occurs (defintion of dynamic). Looks at

both replicability (your own ability to copy what you do), and imitiability (if others can copy

what you do). Competitve advantage is distinctive processes, specific asset positions and the

firms paths. Arguments: Capabilities cannot be bought. A shift in environment (external) is far

more serious than loss of key individuals (internal), as you need to change whole org. if the

first happens.

The capacity to renew competencies so as to achieve congruence with the changing

business environment. Corporations may be locked into corporate strategy/structure

trajectories

Tags: Dynamic environment, Learning dynamics, Dynamic capabilities, Path dependency,

Bounded rationality, technological trajectories

Mintzberg, H. and J. A. Waters (1985)

Of Strategies, Deliberate and Emergent

See model 259/page 2. Argument, difference between intended strategy and realized

strategy, as some part of the strategy will be unrealized, as well as parts of the strategy will

be emergent under the way. Look at 8 different types of strategies, see model with complete


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overview on 270. They are Planned, Entrepreneurial, Ideological, umbrella, process,

unconnected, consensus, imposed.

Strategies falls on a continuum from purely rational (deliberate: precise, articulate, under

control, directed) and emergent (patterns of actions, lack of precise intention)

Tags: Strategy as Plan, strategy as Ploy, Strategy as Pattern, Strategy as Position, Strategy

as Perspective, Deliberate to emergent strategy, No single definition of strategy

Porter, M. and M.R. Kramer (2006):

Strategy & Society. The Link between Competitive Advantage and Corporate Social Responsibility

On the fact that company CSR efforts have not been as productive as they could be due to

the following two reasons: (1) Stakeholders pit business against society, when clearly the two

are interdependent (2) Stakeholders pressure companies to think of CSR in generic ways

instead of in the way most appropriate to each firms strategy. This article introduces a

framework that integrates society and business and thereby provides the incentives for

tremendous social progress and competitive success.

General about CSR, with lot of empirical examples. Has prioritization of social issues into

three: 1) Generic social issues 2) Value chain social impacts 3) Social dimensions of

competitive context. Some problems might be very general/generic for some countries, while

having great influence on either value chain or competitive context for others. You have

scarce ressources, so choose the issues relevant for your company.

Tags: CSR, moral obligation, integration of business and society, inside-out linkages,

outside-in linkages, responsive CSR, strategic CSR


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Session 2 - Porterian paradigm versus platform-based strategy

Afuah, A.N. and J.M. Utterback (1997)

Responding to Structural Industry Changes: A Technological Evolution Perspective

Critic / extension to Porter's product-market postion / 5 forces and the resourse based view.

Both perspective are static, but industries are not. Takes the dynamic model of innovation by

Utterback Abernathy 1975. It has 5 phases: 1) Fluid 2) Transitional 3) Specific 4)

Discontinuty. Technologies evolve as firms interact with their environments. When techn

evolved so does industry structure, attractiveness and critical success factors. They make

theory where they look at industry attractiveness (Porter) and resource based view, and

combine with the dynamic model of innovation, and analyze how you should assess both

perspectives differently according to which of the 5 phases your are in. Texts have

figures/overview of each stage combined with both perspective.

So the point is that strategies neede to evolve over time due to technological changes, which

validates the relevance of the framework presented.

Tags:Static vs. dynamic perspectives, Industry Life Cycle, Industry characteristics change,Strategy and competencies needed change as the industry evolves

Eisenmann, T., G. Parker and M.W. van Alstyne (2006)

Strategies for Two-Sided Markets

Platforms serving two-sided networks are not a new phenomenon. Yet platform provides have

struggled to establish and sustain their two-sided networks. Their failure is rooted in a

common mistake. In creating strategies for two-sided networks, managers have typically

relied on assumptions and paradigms that apply to products without network effects. This

article presents ways for overcoming the challenges of two-sided networks

Two-sided networks = platforms. Provide infrastructure and rules that facilitate the two'

groups transactions. Traditional value chain: values moves from left to right. In two-sided

networks: cost and revenue are both to the left and the right because their are distinct users

on each side. However, sometimes one side may be subsidized. When one user-side issubsidized, the other (money side) pays extra to balance out. This means the subsidized part

pays less in a two-sided network than if it was in an independent market. The money side

pays more. Goal is to generate cross-side network effects: If the platform provider can attract

enough subsidy-side users, money-side users will pay handsomely to reach them. Example

of Playstation, more games better for players, more players better for game developers.

Snow-ball effect. Who to subzidize? Price-sensitivity, example of PC's, end-user use for work

and is not price-sensitive so its free for programmers to develop application for OS, but on

PS, consumers are young and price sensitive, so game developers pay fee to Sony. You can

grant exclusive rights on your platform to provider. Winner-takes it all in platform, ex. of VHS,

due to 3 reasons 1) consumers dont want seperate players 2) producers dont want to

produce for several format 3) differenation is difficult as they need to match the specs of a TV.

Late movers can have advantage ad the avoid pionners errors, better to incorporate latest

tech and make reverse engineering to cut costs. CHALLENGE. Envelopment = you platform


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overlaps with another (and bigger) platform. If they integrate your features you are in trouble,

they will swallow you.This can be converrgense which is when mobile phones incportate

music and cameraes. How to avoid: Team up with bigger brother or succes.

Tags: Two-sided networks, Network effect, Subsidy side, Money side,Same-side effect,

Cross-side effect

Gawer, A. and M. A. Cusumano (2002)

Introduction. Platform Leadership and Complementary Innovation

A platform is an evolving system made of interdependent pieces that can each be innovated

upon. This definition highlights two fundamental phenomena currently impacting the high-tech

world: (1) the increasing interdependency of products and services (2) the increasing ability to

innovate by more actors in the high-tech world. A platform consists of an architectural design

for products, services, and an infrastructure facilitating platform users interaction plus a set

of rules, including compatibility standards, rules for modular systems and sub-systems,

property rights and the terms governing transactions.

Platform leadership is when you want to drive innovation in your industry. A platform leader

can benefit form, but is also highy dependent on innovations developed by other firms.

Platforms leaders and other firms have mutual interes tin working together and create

complementary innovations to the platform. many complemtary products add vaulue to the

platform. Four levers of platform leadership: 1) Scope of firm, how much should they produce

themselves 2) Product technology, , degree of modularity, openness etc. 3) Relationship with

external complementors, how close, they may be potentiale competitors 4) Internal org.,

Tags: High-tech Platform, modularity, platform leadership

Chapter 8 in Chesbrough, H. (2011)

Open Services Innovation for Services Businesses,


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Session 3 - The Battle Between Alternative Fuel Platforms

Orsato, R. (2009)

Sustainability strategies: When does it pay to be green

Environmental issues are becoming increasingly hard to ignore these days. For many

companies, it has become a licence to operate. Those who dont consider the environmental

impact of their operations will find themselves at a disadvantage, not just because their

competitors are doing it, but also because the public demands it.

As corporate environmentalism is no longer philanthropy, but an indispensable new approach

to the business model, many companies will implement what they consider to be

sustainability strategies, when they are, in fact, generic approaches to environmental

management.

This can have serious implications on a companys bottom line, because if a firmsenvironmental strategies are not aligned with its overall business strategies, precious

resources will be wasted.

Backs Reinhardt, in more nuanced debate. Framework of generic types of competitive

environmental strategies. Strategic importance of proactive environmental managements.

Most firms are expected to be better citizens, but only a few are able to turn it into a

competeive advnatge. Broader debate, Porter's posiition school and the RBV view. Porter

says there are two generic types of (general) competitive advantage 1) Low Cost 2)

Differentiation. Total Responsibilty Managements (TRM) is slowly emerging. Important to

distinguish between quality and enviromental, because qulaity standards as improving

cost/proftis, does not mean environmental sandards will do the same. The 4 types: 1) Eco-efficiency 2) Beyoung compluance Leadership 3) Eco-branding 4) Environmetal Cost

Leadership. See model on p. 131. Looking at whether you can have lower cost (1 and 4) or

differnation your selv (2 and 3), and if you focus on organisationl processes( 1 and 2) or

Product and services (3 and 4).

Tags: Social Value Innovation, licence to operate.

Mann, Charles C. (2009)

Beyond Detroit: On the Road to Recovery

A case oriented article stating that the US car industry should abandon the broken downDetroit-knows-best model for automating and instead build an ecosystem of innovation thatharnesses the best ideas and technologies, wherever they originate.

In order to survive the US car industry must find a way to incorporate outside innovations, just

like the US computer industry. Modularity based models could be an answer to this

Tags: Disruptive innovation, Modularity


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Struben, J.; Sterman, J. (2008)

Transition Challenges for Alternative Fuel Vehicle and Transportation Systems

Diffusion of hybrid-cars. Dominant design. Chicken-Egg problem. Path dependencies.

Product Life cycle. Uncertaintty about new products. Dynamics in diffusion incl. Word tomotuh, social exposure, marketing, scale and scope economies, learning from experience,

R&D, innovation spillovers, complemenary assets like fuel infrastructure. Personal identify

and social norms also affect choice of car. Strong marketing and direct word to mouth favor

diffusion

Tags: Positive feedbacks, Negative feedbacks, Install base


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Session 4 - industry-based strategy towards a framework of

convergence-based strategy

Christensen, J.F. (2011)

Towards a Framework of Business Convergence

On a framework of Business convergence. The article presents a framework for understanding

business dynamics that are not confined to industry-specific trajectories but instead convergence

and divergence of industries and product markets. The framework serves 3 purposes: (1) a

systemic way of analyzing business and innovation context that are not well explicated by the

industry-confined frameworks associated with the 5F (Porters Five Forces), PLC (The Product

Life Cycle), and the ILC (Innovation Life Cycle). (2) It proposes a theory of the generative

mechanisms underlying convergence and divergence (3) it provides a new life cycle model, theConvergence Life Cycle.

Critic of Porters five forces, PLC, and ILC. Divergence: Disintregration. Convergence:

Integration. Value propoistion of convergence: Overall reduced costs and simplification for the

user in terms of implementation, multi-functionality, amangement and udpating. That is one-

stop shopping. Professional customer might rather want to go to 'specific special stores', so

there is still a high-end market. Key word: ecosystem, p. 13. Defintions of the two on p. 15.

What drive products away from PLC/ILC track into convergence: Will be triggered when

prospect of economies of scope and synergy through integration, are perceived higher than

economies of scale or specilization. Convergence happens with the oppostion is perveived.

See p 18-20. Convergenge Life Cycle created, see p. 28

Convergence: The ful or partial integration of two or more product market or industries,

previuolsy not interconnected through competitior and supplier relations.

Divergence: the reverse process of the above!!

Example of convergence: cameras in mobiles. Examles of divergence: GPS was in Palms,

now seperat product.

Tags: Convergence (integration), Divergence (disintegration), Convergence, needs dynamic

capabilities, Industry boundaries, Ecosystems, Product markets, Industries (Porterian),

Convergence Life Cycle, OPen innovation??


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Session 5 - First or Second on the Market

Marvin B. Lieberman and David B. Montgomery (1988)

First-mover advantages

An environmental change followed by luck or/and firm proficiency gives a first mover

opportunity. There are three mechanism that can turn this into and first-mover advantage

thats leads to profits. Mechnanims: 1) Technological leadership 2) Preemption of assets 3)

Buyer switchings costs. 1) Tech Lead: can be done by looking at learning curve model, as

well as R&D and patents. However the first, is not as evident as earlier because of increasing

mechanism of diffusion like workforc mobilty, research publication, reverse engineering, plant

tours etc. The the second, is most applicable in pharma, as patents are weak in many

industries 2) Pre Assets: E.g. scarce location, or first in town/country. However eg.

newspaper and cement-production cases show this not always help, Walmart example ofsuccess. 3) Switchin c: Transactions cost. Also contractural e.g. frequent flyer program. Also

there is uncertainty with new things: Late entrants must have a truly superiod product, or else

advertise more frequently or more creatively than the incumbent in order to be noticed by tht

consumer. Especially within e,g grocery goods.

FIRST MOVER DISADVANTGES: 1) The abiliity to freeride 2) Resolution of technological

and market uncertainty 3) Technological discontinuities that provide gatewats for new entry -

creative descrution (Schumpeter) 4) Incumbent inertia, that is diffcult to adapt to

environmental change. Incumbent inertia: 1) Locked into to a specific set of assets 2)

Reluctant to cannibalize its own business 3) Organizationally inflexible. GENERAL argument:

First-movers may exhibit higher survival rates, but difficult to know it i stemmets frompioneering or from other basic characteristics. Also important to look at long-term or short-

term, e.g. if you are dependt on patent, your advantage are removed when it expires. Look at

your capabilities, are you have stroing R&D be a first-mover, are you strong in marketing, be

a later mover. Boulding and Morre found pionnerring to be marginally unprofitable on

average. However, a number of stuides found that 'me-too' strategies tend to be unsuccesfull.

Tags: Where does first mover advanategs arise from?, Technological leadership, Preemption

of assets, Switching cost, What are the cost of being a first mover?, Free rider problems,

Shifts in technology or customer needs, Organizational inertia, Network externalities,

Pioneering

Kim, W.Chan and Mauborgne, Rene (2005)

Blue Ocean Strategy

For 25 five years, competition has been the heart of corporate strategy. This article proposes a

shift from the structuralist view (or environmental determinism) towards a, what the authors

call, reconstructionist view. To summarize, instead of assuming an industrys structural

conditions are given, the reconstructionist way, view industry structure and market boundaries

as something that can be reconstructed by the actions and beliefs of industry players. The notion

of Blue Ocean strategy is presented a long with a practical framework for implementation.


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The only way to beat the competition is to stop trying to beat the competition. To

focus on the red ocean is to accept the key constraining factors of war

Cornerstone of blue ocean strategy: value innovation

In red ocean: Grabbing a bigger share of the market is a zero-sum game. You benchmark

with competitors. They survey on Blue Ocean: 14% of launches was BO, but te accounte for

38% of revenue and 61% of profit. STRATEGY CANVAS: Look a different factors/value and

how they are positioned, everyone compete on the same, and have the same strategi profile

in a red ocean. BLUE OCEAN: Look at alternatives instead of competitors. Look at

noncustomers instead of customers. FOUR ACTION FRAMEWORK: 1) Eliminate factors that

are taken for granted 2) Reduce factors below industry standard. These two factors cu costs.

3) Raise factors above industry standard 4) Create new facotrs. The latter two creates new

demand. See model p. 114. Case example: Yellowtail wine.

Tags: Blue ocean strategy, Non-consumers, Non-markets, Create new factors, Strategy

Canvas, Value curve, Four actions: Eliminate-Reduce-Raise-Create

Markides, C.C. and Geroski, P.A. (2005).

Racing to be second: When to enter new markets, in Fast Second

Why do big, established companies only rarely create radical new markets but

still win? Highlight that there are many risks with being first. Bigger players may

follow with major investment e.g.

Tags: Radical innovation, Supply push innovations, Emergence of product vs. Market, Nichemarket vs. mass market, Division of labour

Suarez, Fernando and Lanzolla, Gianvito (2005).

The Half-Truth of First-Mover Advantage.

Distinguisg between durable and short-lived profitibality. Three ways to gain technological

edge: 1) Accumulate knowledge 2) Access to scarce resources 3) ustomer base and

switching costs.

Two factors influce chances of First Mover succes: 1) Pace of technologival evolution 2) Pace

of market evoultion (demand). Fast-Fast: Rough waters. Fast-Slow: Technology leads Slow-

Fast: Market leads. Slow-Slow: Calm waters. What water you swim in determines chances of

success and if they fit your ressources. Calm waters are very attractive, you can keep of with

demand and technologic evolves incrementally so you can keep up, brand awaneress is

good. If technology leads you need strong R&D and deep pockets, as deman will not come

until 10 years later, but you still need to improve products constantly. Market leads. Huge

demand, you need to have the ability to scale op in markeitng, production and distribution.

Rought waters: Everything at once, difficult. See full model on p. 126.

The article proposes a way of analyzing when first-mover advantages are likely. It concludes that

the likelihood of these advantages depends on internal firm capabilities, competencies, resources

and assets, but also on the pace of market & technological evolution. Especially the pace of


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technological evolution and market evolution are important factors when determining the

likelihood of first-mover advantage.

Tags: When can first mover advantages be sustained?, Pace of technological development,

pace of market evolution


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Session 6 - Dynamics of technology launch strategies

Barraba, V. et al. (2002):

A Multi-method Approach for Creating New Business Models: The General Motors Onstar

ONSTAR. Choice between evolutionary wait-and-see strategy or revolutionary strategy and

develop and preempt the telematics market. Focus on network externalities (the more people

that adopt the service, the services becomes more valuabale to both existing and potential

customers). In their choice they looked at System Dynamics, Conjoint Analysis, Dynamic

Optimization, Diffusion Models, Lifetime Customer-Value analysis and Real Options. Found

Word-To-Mouth an important factor. Alliances with important new-economy and old-economy

players was crucial. Uses Open Platform strategy. Considered Skim and Penetration strategy

in their Pricing decision. Increasing vehciles in allieance with competitors would create large

customer base and positive-feedback process. Furthermore, License Revenue would begained. However, also removes competetive weapon (differentation) from GM products. They

found that installing it default in all vehicles wold give much larger returns in the long run, than

only installing in the ones buying it. Onstar is good example of some features in BLUE

OCEAN, they compete on other parameters, and Create new things/market.

Tags: Evolutionary strategy (gradual introduction, value pricing, limited marketing),

Revolutionary strategy (aggressive introduction, penetration pricing, aggressive marketing)

Dynamic modeling

Oliva, R.; Sterman, J.; Giese, M (2003)

Limits to growth in the new economy: exploring the 'get big fast' strategy in e-commerce

Amazon. Grow or Die og Grow and Die. Strategi of Get Big Fast (GBF). Based on some of

the same things ad firstmover. Positive feedback include network effects, scale economies,

learning curves, standards formation and accumulation of complemtary assets. Gros as fast

and preempt competitors. Winner takes it all concept. Creating monopolies. Low prices and

large investments in infrastructure required external capital.

NEW ARGUMENTS in this artcile. Negative feedback. If you grow to fast and an that drives

service quality down, gives poor reputation and can create death spiral. Model on p. 88shows the whole system af Online Retailer should take into consideration. Concept in

investment to startups: honeymoon. Entry timing important. They made COMPLICATED

model. GBF strategy requires a delicate balancing between rapid growth driven by low prices

and aggressive marketing and developing infrastructure required to serve and keep the

masses of customers attracted. GBF can work if: 1) Strog reinforcing feedback loops 2) Need

to grow long enough for these loops to become important. Other important arguments. They

more entrants the more difficult, drive down prices and result in shakeouts and extis.

Tags: Get Big Fast (GBF) strategy, Positive feedback loop, Negative feedback loop, When

will a GBF strategy be possible?


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Session 7 -

Fisher, Roger, Ury, William, and Patton, Bruce (1991).

Getting to Yes: Negotiating Agreement without Giving In

Soft negotiators and hard negotiators. Other strategies fall in between, and involveds an

attemped trade.off between getting what you want and getting along with people.They have

the developed the method of principled negotiation. Talking about positions in the negoation.

But it turns into unwise agreements, it inefficent, it endagers the relationship and when there

are many parties its even worse. PRINCIPLED Negotiation: 1) People: Seperate the people

for the problem 2) Interests: Focus on interests, not positions. 3) Options: Generate a variety

of possbilities before deciidng what to do 4) Criteria: Insist that the result be based on some

objective criteria. This should led to wise agreements. See overview in model on p.13.

Brett, Jeanne M., Friedman, Ray and Behfar, Kristin (2009).

How to Manage Your Negotiating Team

Aligning the conflicting interest held by members of your own team and implementing a

discplined strategy at the barganining table. Negotiatin teams often sabotage their own

efforts. The payoff from negotaing as a team is clear. Access to greater expertise and

possibility of assignied specilaized roles, temas can implement more complex strategies than

solo negotiator. But teams also gives challenges.Internal conflicts and alligment.


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Session 8 - Transaction cost perspectives: Make or Buy?

Shelanski H., Klein P. (1995).

Empirical Research in Transaction Cost Economics: A Review and Assessment.

Short excerpt on Transaction Economics general things.

Tags: The cost of participating in a market, Factors determining opportunity costs,

Frequency, Specificity, Uncertainty, Limited rationality, Opportunistic behavior

Ellram, Lisa M., Tate, Wendy L., and Billington, Corey (2008).

Offshore outsourcing of professional services: a transaction cost economics perspective.

Short-term price savings continues to be predominant reasons for both offshore anddomestice outsourcing. Outsourcing affects a firms' cost structure, but maybe also long-term

competitive sutuation. TCE and risk of supplier opportnunism, which is highest when the

buyer cannot specifiy or does not know what he wants, and the buyer cannot accuratelty

assess whether the supplier is actually keeping his commitments. Rule of thumb: Not

outsurce items that are strategic or part of tour core competences (Prahalad and Hamel).Def

of outsoursing p. 149. This text looks at these elements in TCE: 1) Transaction frequency 2)

Asset specifity 3) Uncertainty to outsourcing sutuatons. In regards to 1), IT tech and

cmmunication systems cause the TC of many services to be dominated by fixe set-up costs,

rather then variable TC, this means they curve has shifted, because whit manufacturing set-

up was smaller thna variable costs. They found: Firms more likely to oursource larger volume

servies, than small volume.The more asset specifity investment required, the found partialsupport for that firms are less likely to outsource, the firms was concern with phsycal assets,

both that much with human capital. Firms agree that the more volatiale the supply market is,

the less likely they are to outsource. Continuum of different leve sof outsourcing on p. 157. If

you loose tacit knowledge, you become dependt on supplier. Rule of thumb: Don't outsource

anything if you dont what that service should cost.

Rubin, P. H. (1990).

Managing Business Transactions.

You buy from others as they have larger economies of scale or scope in producing that

output. Protection against opportunitism. In a contract there is the performing party and the

paying party. Both can bahev opportunistically, however easiest of perfoming party. However,

both parties have an incentive for effiecient enforcement mechanisms. Contracts not alwaus

the bestm they are imperfect. Self-enforcing agreements, where each party abides by the

agreement only so long as it pays to do so. Lower transaction costs. The goal is to make the

short-run gains from cheating as low as possible and the long-run gians as large as possible.

However the last-periode problem term makes self-enforcing agreements not feasible.

Another way is 'hostages', e.g. quasirents associated with a fixed investment in transaction,

that will be lost if the relationship stops, aso cashbonds. Sunk investments, mandatory

licensing, price constraint s (if you but from other we should have the same), bilateral

exhange (both parties buyt from each other), joint venture and reputation, which might be the

most important, however as a party becomes older the value of his reputation become les


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valuabale as there a shorter time periode left to earn returns on reputation. Monitoring might

be a good idea, but expenesive, men cost can be decreaed if you use less suppliers. There

theories can also be used to intrafirm transactions between departments, here you can use

simulatin of market, but also need to take hiercahical structure into considereation.


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Session 9 - Getting the incentives right for competitive success

Foss, N.J. (2002):

Selective Intervention and Internal Hybrids: Interpreting and Learning from the Rise and Decline of the

Oticon Spaghetti Organization

Oticon. Spaghetti organization. That is a internal hybrid, you can also have an external hybrid.

Radicalt attempt to foster dynamic capabilities (Teece), however now shifted to more

traditional matrix organizatin, despite success. Reason: Frequent managerial meddling with

delegating rights led to severe loss of motivation. External hybrid: Market exhanges infused

with elements of hierachicalcontrol. Internal: Hierachical forms infused with elements of

market control.Aim to reduce coordination costs and improve incentives, that should improve

entreprenuriel capabilites and foster innovation. Some are afraid to outsource and the like,

might therefore pusue this. Empovring project-and-team based organization. Reason: Oticon

was locked in a competence trap. Number of formal titles was reduced. Cross-team work, and

no reqular desk. Employee stock options. Devlopment time was rudeced by 50%.Centralized

decison-making systems, have problems in utilizing important stick information (Von Hippel

1994). From 338-340 goes through different propostions.

Eisenhardt, K. M. (1989).

Agency theory: an assessment and review

General classic text on prinicipal-agetn. Talks abound bounded rationality, risk aversion,

moral hazard, informaion assymetry, Adverse selecetion etc.

Tags: Self-interest, Goal incongruence, Information asymmetry, Incentive systems

Floricel, S. and Lampel, J. (1998)

Innovative contractual structures for inter-organizational systems

Tests the principal-agent thepry on large-scale engineering projects. Results confirm the PA

theory. Agents the only one affecting the outome, however correlation between agents effort

and the outsome is not perfect, due to external events. Talking about behaviour-based and

outcome-based contracts. Most typuccaly example an employement contract. Agency cost to

monitor and specify. Goal congruence between P and A will enhace behaviour-based c. The

better monitoring capability the P have, the more likely behaviour based c are. The more risk

averse the A is, less likely is outcome-based c. The more innovation technolog in the porject,

the more likely for behavoir-based c to be usend. The more risk averse the P is, the more like

is outcomebased c. If these things are aligned, the chances for project to succed is higher.


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Beowulf case

Case about oil field in Greenlands. PA negotiatioen. Three types of contracts to choose

between 1) Fixed price contract 2) Cost plus contract 3) Rish sharing contract


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Session 10 - Strategy under uncertainty

Rosenberg, N. (1995):

Why technology forecasts often fail

Failure is inability to anticipate the trajectory of future improvements over the original

innovation and the economic consequences of those improvements. So this needs more

focus. Dimensions of uncertainty: 1) Potential uses, examples from medicine, with various

uses. 2) Complementary innovations, the impaict of invenstion A will often depend upon

invention B, but B mat not yet exist! examples of laser and telephones. 3) Systems

integration, whole new rail road systems etc. 4) Problem-solving myopia, designet for

something very specific. 5) Passing the 'needs' test, needs to be economic feasible, the

market needs it. 6) Competing with the past, when new substitutes arrive, the old ones start

to innovation incrementally. All this uncertainty, makes it riskufl for firms to pursue aninnovation

Tags: Difficulty of predicting purpose of innovation, Bounded rationality, Potential use,

Complementary innovation, System integration, Problem solving-myopia, Passing the needs

test, Competing with the past

Courtney, H., J. Kirkland, and P. Viguerie (1997)

Strategy under uncertainty,

There are unkown things, but there can be knowable if you make in depth analysis, and then

there are truly uncertain things, that is residual uncertainty. Four levels of uncertainty: 1)

Clear-enough Future 2) Alternate futures, e.g. On legislaition proposal or the other goes

through 3) Range of futures: E.g. customer penetration between 10 and 30 %. 4) True

ambiguity. Level 4 are quite rare, and tend to migrate to one of the other levels over time. The

argument is you need to tailor your strategic analyses to the four levels. Level 1 is eay, you

can use Porter's Five Forces, discounted cash-flow etc. Level 2 are a bit more complex, you

might need to think of possible paths the industry might going to follow. Level 3 is very similar,

you need to identify different scenarios, juggling between more than four or five becomes to

difficult. Level 4 even more qualitative. You can take different postures: 1) Shaping 2)

Adapting 3) Reserve the right to play. You can take 1) Big bets, 2) Options, designed tosecure big payoffs the best-case scenaro, while minimizing losses in worst-case. 3) No-regret

moves. I level 1, most companies are adapters, as you make the whole industry unecessary

risky if you want to try and shape things. Level 2, you can try to shape, here can imcumbent

inertia be an influeator. Level 3, shape, e.g. standard battles, but else right to play is common.

Level 4: you see some create a consesus, as everyone knows nothing, so equal chance for

one thing becoming standard like the other.

Tags: Binary view of uncertainty, Different levels of uncertainty, Clear enough future,Alternate futures, A range of futures, True ambiguity, Strategic posture, Shaping, Adapting,Reserving the right, Types for implementing strategies under uncertainty, Big bets, options,No-regrets move


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Kolk, Ans and Pinkse, Jonathan (2005).

Business responses to climate change: Identifying emergent strategies

Companies face much uncertainy due to changes in environmental legislation changes. This

requires flexible mechanisms. Figure on p. 8 is the essences of the texts. You can eitherInnovation or Compensation to fit the new enviromental future. You can do it on three

different leves 1) Internal 2) Vertical supply chain 3) Horizontal beyond the supply chain. Their

study found that most firms are 'Cautios planners' and 'Emergent planners' so they are still in

preliminary phase, so they are already on some kind of path,but some do either just trade or

already integrated alot, so this means you don't necessarily need to be path-dependent, but

these companies are maybe taking larger risks. see full model on p. 12.

Hoffmann, V.H., Trautmann, T. and Hamprecht, J. (2009).

Regulatory uncertainty: A reason to postpone investments?

Tags: Resourced based view analysis, Competitive Resources, Complementary resources,

Institutional pressure


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Session 11 - Branding, Copyrights and Open Source

Aaker, David (2007):

Innovation: Brand it or lose it

Innovation is increasingly at the center of the strategy and the DNA of most firms. The logic is

that innovation will lead to growth and profitability. And, as most markets drift toward

commodity status with offerings becoming similar, innovation is seen as the way to create

differentiation. Nearly every firm will include innovation as one of its cultural values and as

one of the pillars of their strategy. Many have innovations as corporate tagline HPs invent,

Toshibas Leading innovation, Toyotas moving forward

Innovation is crucial but how should it be branded? Without a successful branding strategy,

an innovation can be short-lived diffusing into a confused marketplace with its impact

dissipated or become another forgotten internal initiative. Not all innovations should be

branded there is a risk of over-branding resulting in confusion and under-resourced brands.

Branding does not mean simply putting a name and logo on an innovation. A brand is part of

a coherent strategy.

Branded innovations can potentially help advance a business in 3 distinctive ways.

1) They can create or improve the offering, making it more differentiated and more attractive.

The innovation can be represented by a branded or sub-branded product or by a branded

feature, ingredient, or service.

2) They can create a new subcategory to change what customers are buying.

3) They can affect perceptions of the organization or corporate brand with respect to

innovativeness in order to make it respected, to give it energy and/or to make its new product

offerings more credible.

There are two problems with sliding innovations into exiting offerings:

The market contains many who are not motivated, or perhaps simply are not able to sort out

the new product claims and the rationale behind those claims. The result, the claim of the

new and improved simply fades in the muddled environment.

Any dramatic, visible improvement is likely to be quickly copied by competitors.

The value of branding

A new offering can have its own brand, endorsed brand (Apples iPod), or sub-branded.

Further an innovation that represents a feature (Cadillacs On-Star), ingredient (Doves

Weightless Moisturizer), or service (Best Buys Geek Squad) could also be branded directly.

A brand allows ownership of the innovation, adds credibly and legitimacy, enhances visibilityand helps communicate facts.

Branding issues

One strategy for competitors facing a branded innovation is to appear similar by mimicking

irrelevant attributes.

When branding a new offering there is usually the choice of using an existing brand with a

descriptor (Apple MP3 player), a sub-brand (Pontiac Firebird), an endorsed brand (Ralph

Laurens Polo), or a new brand (Lexus). The choice hinges on 2 issues. Is the offering worth

branding? And, how much separation is desirable from the parent brand and the new

offering?

To Brand or Not to Brand?

- Is it a significant advance?


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- Do the customers care?

- Will it merit investment over time?

i. Sales and profit stream? ii. Opportunity to create and hold market leadership? iii. Potential

to be a moving target?

When a transformational innovation that creates a new subcategory is involved, a brand canhelp to define, position, and dominate the new subcategory. In addition, a strong branded

innovation can affect the reputation of the parent brand.

Why Brand the Innovation?

Consider Samsung and Sharp. Sharp branded its LCD TV as Aquos and its introduction in

Japan in 05 led to significant boost in perceived innovativeness for Sharp (from 23 to 12

among all Japanese brands). Samsung chose to introduce its TV under the Samsung brand

without a branded innovation. While Samsung was successful, several questions arise:

1. Was the visibility of the Samsung technological advance as high and widespread as it

would have been if the innovation were branded?

2. Would branding an innovation interject more credibility even for Samsung, which enjoyed a

generally positive image?

3. Would sub-brand have helped or hindered linking the innovation to the Samsung brand?

4. The long-term impact?

Tags: Appropriability of innovation through branding, The Value of Branding, Create or

improve an offering, Manage the perception of a new subcategory, Affect the perceived

innovativeness of an organization

Beverland, Michael B., Napoli, Julie and Farrelly (2010).

Can all brands innovate in the same way?

Tags: Link between how innovation and branding, Approach to innovation (incremental vs.

radical), Relationship to the marketplace (market-driven and driving markets), Brand

extensions, Failure due to mismatch between strategy and capabilities

Shapiro, Carl and Varian, Hal. R. (1999):

Rights management

How digital media has changed intellectual property. Optimistic, this offers new possibilities

instead og threats. It has changed two significant costs: 1) Reproduction costs is lowered 2)

Distribution costs is quicker, easier and cheaper. Term: Infomercials: You give a way free

contect/info, as a kind of commercial, for your premium product. Remeber the 'Option Value',

if yo buy ad CD you can listen to the music whenever you want as opossed to the song also

been played on air. Examples of children figure Barney, she gave the tape for free to

kindergardens, the parents then boight it. Term 'Ilicit copying', e.g. news, only have value

now, cannot copy and sell in a week. Example of postive feedback, the video. Player and

movies was very expensive, but video rentals increases used. Same with bookstores, added

with libraires back in the days.


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Park, Walter G. (2010).

The copyright dilemma: copyright systems, innovation and

Lerner, Josh and Tirole, Jean (2005).

The economics of technology sharing: Open source and beyond.


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Session 12 - Globalization of R&D

Isenberg, Daniel J. (2008).

The global entrepreneur.

Veliyath, Rajaram and Sambharya, Rakesh B. (2011).

R&D investments of multinational corporations.

Tags: Home-base exploiting, Home-base augmenting

Khurana, Anil (2006).

Strategies for global R&D

Bannert, Valerie and Tschirky, Hugo (2004).

Integration planning for technology intensive acquisitions.

Tags: Internalise external knowledge, Change management, Integration strategy& planning, aquisitions


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Session 13 - Resource- and competence-based perspectives

Barney, J. (1991

Firm Resources and Sustained Competitive Advantage

Resources: 1) Physical capital 2) Human capital 3) Org. Capital. Competitive advantage:

Value creating strategy not simultaneously being implemnted by any current or potential

competitor. Sustainable CA: The same as CA, but also when these other firms are unable to

duplicate the benefits of the strategy. Note. SCA does not mean it will last forever.

Unanticipated changes in the economic structure of an industry may make what was, at one

time, a source of SCA, no longer valuabale for a firm. Sources of competitive advantages. 1)

Valuable ressources, that is when they enable a firm to implement a strategy efficient and

effective 2) Rare resources 3) Imperfectly imitiable resources, 3a Unique historical

conditions/path dependecy 3b Casual ambiguity, they don't even know which ressourcesgives SCA themselves, so others cant find out either 3c Social complexity, interpersonal

relations between managers, firm culture, firm reputation amon suppliers and customers.. 4)

Substitutability. Maybe another firm cannot copy what you do, but if they can do something

else that create the same value, then your unique resources is substituable, and therefor not

a soruce of SCA. See model with summary on p. 112.

Tags: Resource bundles needed to achieve or sustain privileged market position,

Firm resources, Sustained competitive advantage, Heterogeneous strategic resources, VRIN:

Valuable, Rare, Imperfectly imitable, Non-substitutes

Dyer, J. H. and H. Singh (1998)

The Relational View: Cooperative Strategy and Sources of Inter organizational competitive advantage

Tags: Relationship between firms as competitive advanatge, Relational rents, Idiosyncraticc,

inter-firm linkages,Relation-specific assets, Knowledge sharing routine, Complementaryresources/capabilities, Effective governance.

Christensen, J.F.:

Wither Core Competencies in a Context of Open Innovation

Changes towards vertical disintregration, outsourcing, modularization, open standards and

markets for specialized knowledge. Larger firms now new to put more emphasis on beieng

dynamic/adapative and open/extrovert and systems integrator in order to exploit these

oppourtunites. Absorpitive capactity (Cohen and LEvinthal 1990) and Complementary Assets

(Teece 1986), and Dynamical Capabilities (Teece 1997). Big firms should be: System

integrator, innovation architects, platform leaders, standard creators. That is market

coordination and vertical disintegration.Examples of Class D amplifiers, created by small

firms, bought op by the imcumbent a/b amplifiers producers, this shows good abilities in

adaptiong by e.g. Texas Instrument. Hence, big companies cannot just focus on builiding their

own strong core competenees (Prahalad and Hamel 1990), even though this is still relevant


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Tags: Core competencies, Integrative competencies, Deep and narrow competencies,

Absorptive capacity, Open innovation as a result of changes in the external conditions for

conducting tech innovation, Increasing modularity, specialisation, outsourcing and networking

driving, American capitalism

Teece, D. J. (1986):

Profiting from technological innovation: implications for integration, collaboration, licensing and

public policy,


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Session 14 - Building competencies for Strategic Sourcing

Pisano, G.P. and R. Verganti (2008):

Which Kind of Collaboration is Right for You?

4 types of coll. 1) Elite Circle: Hierachical & closed. 2) Innovation mall: Hierachical & Open. 3)

Consoritum: Flat & Closed. 4) Innovation Community: Flat & Open. Hierachical governance is

desirable when org. Has the knowl. Needed to define the problem and evaluate proposed

solutions. Flat is good if is a specific module, which can be easily tested, quite difficult for

qualitatve products e.g. design.

Tags: How open or closed should your firms network of collaboration be?, Participation:Open vs. Closed, Governance: Flat vs. Hierarchical, Four modes of collaboration


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Session 15 - Innovation and the Role of Market Development

Leonard-Barton, D. (1995):

Learning from the Market

Well-established market research techniques, especially quantitative ones, are generally

available to everyone that can afford them, and therefor they don't lead to unique sustainable

competitve advantag. Model on p. 181 and 184. Established firms feels pressure of

competetion to move up on vertical exais to create groundbreaking products, but internal org.

routines pressures them down towards incremental improvements on basic and mature

deisgn. Talking about dominat design and design hierarchy that limits people scope.

However, some dominant design might have a short life. Reasonable simple product

enhancements for current customers can be highly profitable, and the leftside of the axis

where you focus on current cusotmers are likelyt o be the easiest to manage. However, thismight not also nurture the future of the company. It can blindsided by a new generation of

technologu that served a different market. Hiroyuki states you have three diffetent types of

customers 1) Generat profits 2) Generate sales growth 3) Allow accumulation of invisible

assets. You need to have a balanced mix. Model p. 1984 names the different strategies you

pursue in the model 1) User-driven enhancements, improved solution to a known need 2)

Developer-driven development, new solution to a know need 3) user-context development,

new solution to an unexpressed need, e.g. Post-it. 4) New application or combination of

technologies, a novel solution to an identified need, often find soltion from other industry. 5)

Tecnhnology/market coevultion, evolving solution to an uncertain need, also know as

technology push. In each situation you need to import knowledge from the market in different

ways, 1a) Latent needs analys, 1b) Lead users 1c) Surveys, focus groups, mall studies. In 2-4 you use emphatic design, which is the creation of a product or service based on a deep

empahtic understanding of unarticulated needs, e.g. actual consumer behaviour, direct

interaction. Here are following things important 1) Developets market intuition,

user.developers, industry experts, lead users. Also technology transfer and partnering with

customers. Lastly, anthropolical expeditios where you observe user's practices, capture it on

film or make role-playing. In type 5 innovation, its difficult to get any market research, to often

use market experimation, here are three strategies 1) Darwian selcetion, used by japanase,

several product on market see who survives 2) Morphing, one product and then alter it after

getting feedback. 3) Vicarious experimaton.

Tags: Contingency framework for product development, Product development methoddepend on technology and customer base changes, 5 types of market research techniques,

Empathic Design

Christensen, C.M. and M.E. Raynor (2003)

The Innovators Solution, chapter 2

Innovator's dilemmea. Has two distinct categories: 1) Sustaining 2) Disruptive. There are the

disruptee and the disruptor. When you sustain your innovation, you are making incremental

improvements to, that is a graph going up. That is a trajctory and path. When you make

disprutive you make a new graph/shift the graph. Se figure on p. 33. Dispruptive innovation

don't attemp to bring better products to established customers in existing market. Rather it


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redefine that trajectory making products not as good as currently products (but at a lower

price). Disruption has a paralyzing effect on industry leaders, as there are assymetric

motivation - that is imcubent inertia. Case example of how mini-mill took more and more

share of the steel market, while starting with low segment, see model p. 37. You could not

preditct how the minimills could make innovation that could capture market share, but you

could preditct they were highly motivated. Disprution works because competitors are justmotivated to flee rather fight. Innovators dilemma: Should we protect the least profitable of

our buisness, to retain least loyal and most price-sensitive customers, or should we invest in

strengten our position in the most profitable areas. Disruption is a relative term, e.g. internet

was highly disurpute for Compaq, but not for Dell who already did the same service on the

phone. Therefor new entrant could not beat Dell. Following a strategy of disruption increases

odds of sustaible growth 6 to 37 percent. There are 2 types of disruptipn: 1) New-market

disruption 2) Low-end disruption. See model of the difference on p. 44.New-market is when

you go into a 'nonconsumers' market, so you don't compete with imcubents, you combine it

getting people to use your product, that is a new value network. However with time, you start

pulling customers from the origal value network. Imcubents thinks its fine as you remove low-

end customers, and they can focus on big high-margin customers. Low-end disruption is case

of mini-mills. Southwestern Airlines is a hybrid disruptor, as it got non-consuemrs that drove

to fly, but also pulled many customers for originala value network. Thats are very succesfull

strategy. When to pursue the strategies? See p. 49-50. Great overview on p. 51

Christensen, C.M. and M.E. Raynor (2003)

The Innovators Solution, chapter 3

Customers have 'jobs' (e.g. Get hungry) and then they 'hire' someone to fulfill the job, e.g. A

sandwich. Companies must target their product to circumstances, rather than the customers

themselves.One consumer might buy a milshake in the morning because he in a hurry, later

the same day, he will buy it for his daugther for other reasons. E.g. Blackberry, should not

compete with Palm and all the cellphones, it should instead see under which circumstances it

are used, it is business people on the go, to utilize smaller time slots for work, so its true

competetiors are maybe a newspaper. So it stead is should look at the job-to-be-done view

and segments business people in business circumstances. See overvire p 83. Reasons why

firms dont look at circumstances: 1) Fear of focus, afraid to narrow the market down, 2) Senir

executies demand for quantification of opportunities 3) The structure of channels, you cannot

put the blackberry next to e.g. newsparr, it needs to be put nex to cellphones and PC's in the

store. 4) Adveritising economic and brand strategfies: Brand value are customers willing to

pay premium for, you can then make 'purpose brand', e.g. Mariott at many different chaines.

However its not easy to get people to change 'jobs', it depends on the extent to which helpscustomers more effectively and conviently.

Tags: Trajectory, Sustaining and disruptive innovation, New market disruption, Low-end

disruption


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Session 17- The dynamics of corporate strategy

Porter, M.E. (1987):

From Competitive Strategy to Corporate Strategy

Diversification. A company with this has to levels strategy: 1) BU strategy 2) Corporate

straegy. The latter is what nakes the corporate whole add up more than the sum if its

business unit parts. Premises of corporate strategy 1) Competition occurs at the BU level. 2)

Diversification inevitably adds costs and constraints to BUs; explain to top management,

planning with other corporate acitives, implement policies, logos etc, and cannot motivate

employees with stock options. 3) Shareholds can readily diversify themselves, through their

stock portfolio. These premises mean that corporate strategy cannot success unless it truly

adds value. Therefor it need to pass three tetst: 1) Attractivness, how attractive is the industry

2) The cost-of-entry test, must not capitalize all future profts 3) The better-off test: Gaincompetetive advantage by linking the business to the corporation or vice versa. To 1) Many

companies dont pass attractiveness test, just purchase company because it fits with they

current business. to 2) Many corporation pay overprice. Meeting the 3 tests are so difficult

that most corporations fail. 4 concepts of corporate strategy. 1) Portfolio management, this is

not longer duable, as others will buyt the company if it is undervalued. However in some

developing contries it might still be 2) Reconstructing, buy a company where you see things

are missing, you fix them, and then sell it off agaian. 3) Transferring skills, is about syngergi.

iowever important that the it is skills that gives competitive advantage that BUs share. 4)

Sharing acitivities: P&G example of sharing distribution network. The strategies are not

mutally exclusive. An action program are present on p. 58-59.

Tags: Corporate strategy, The essential tests, Four concepts of corporate strategy (company

independent or connected), Portfolio to strategic assets sharing

Burgelman, R.A. and A. Grove (2007):

Let Chaos Reign, Then Rein in Chaos

Few firms survive as independent entities for long time. Most of the time firms has linear

strategic dynamics, which are relatively easy to understand and copy, but sometimes they are

faced with nonlinear dynamics that overhvelm them (disruptive), most often its new firms thatchange the rules of the game. Strategic inertia among imcubents, they are locked into

product-market enviroment, and this makes it diffcult for them to explore and exploit new

business opportunities. It's about balancing exploitation and exploration (March 1991), or in

this text: 1) Induced strategy or 2) Autonomous strategy, to meet different strategic dynamics

situations. Case example of Intel, from 1987-2005, they have increasinly made more

autonomous strategy processes. However, autonomous initiatives often start small, so

important to schale up to affect the corporation. You have 4 strategic choices 1) 'Safe bet',

valided opportunity and suifficent cash revserve 2) 'bet the company', validated opportunity

but insufficent reserves, 3) 'wait to bet', not-yet validated opportunity and suifficent cash 4)

'desperate bet', noy-yet validated opportunity and insufficient cash reserves. See great

overview of his theory on p. 977.


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Tags: Strategic inertia, Disruption and dynamics contexts, lock-in to existing, induced

strategy, Induced vs. Autonomous strategy, Exploitation and exploration

Christensen, J.F. (2002)

Corporate strategy and the management of innovation and technology

Organizational dynamics of innovation and technology. Two types of firms. 1) Related

diversifer (Danfoss) 2) Vertical integrator (Grundfos). The first wants to creare synergistic

economies, the other vertical economies. The first has a M-form government structure (some

central cordination, but some decentralized).The other has a U-form corporte structure

(centralzed). The related diversifer, can both be 1)Market-related or 2) Technological related.

The first is most M-formed, as it is divisional. Cross-functional learning and cross-discplinary

learning. Radical innovation tends to com efrom R&D labs, incremental innovation govmes

form small engineering unites with strong focus. If technology-base dfirms want to stay

competeitive, have to master increasing range og technological capabilities and estbalish

interdisciplinary point og integration between them. See overview on p. 271. Contingency

theoyr suggest that M-form is approriate for firms that diversif along unrelated paths. For

technolgy based compaies U-form or CM-form is more natural.

Tags: M-form vs. U-form structure


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Session 18 - Strategic challenges in sustainable innovation

Nidumolu, Ram, C. K. Prahalad, and M. R. Rangaswami (2009)

Why sustainability is now the key driver of innovation.

Many firms believe that becoming sustainable wil erode their competiveness, add costs and

not delvier immediate financial benefits. They think rivals in developing countries will get

advantage then. The authors argue that being environmen-friendly lowers cost as it will

reduce inputs in use, and it will enable company to innovation and cretae new business. And

they argue that in future only companies that make sustainability a goal will achieve

sustaianabel competitive advantage. They do it through 5 stages: 1) Viewing compliance as

opportunity (law changes), you should comply with the most stringet rules, even more before

the are implemented, this yields first mover advantages in fostering innovation. 2) Making

sustainable value chains, up 80% are consumed at vendors. Change operations. Homeworksplaces more environmental friendly. Returns/recycling. 3) Designing sustainabale

product and services. Look at customer prefencens and design products perceived as

valuable. 4) Developing new business models. 5) Creating next-practice platforms - that is

totally new things. General: 1) When company top mangemant decide, change happens

quickly 2) Recruitng and retaning the right people.

Tags: Pro sustainability, holistic sustainability, Path to sustainability (5 stages)

Reinhardt, F.L. (1999):

Bringing the Environment Down to Earth

Managers should make environmental investments for the same reason the make other

investemts: because they expect them to deliver positive return or to reduve risks. Critic of

Prahald text notion, that being enviromental always leds to good economic results. More

nuanced view. Environmental investmest are often realized over long periods. 5 things than

can make enviromental investment profitabel 1) Differentaing products, such efforts may raise

costs, but also enable to command hig prices and additional market shares 2) Managing your

competitors: Create private regulations and create combing advantage over those not doing

it. 3) Saving costs: Dramatics cost savings are often found under tremendous pressure.

Remeber also here to include the management costs 4) Managing envinromental risk: Risk

management, to make sure Brent Spar not happens. 5) Redefining market: Blue Ocean, newthings, other paramaters. General: Improvin quality or bein gmore environmental dqn sometis

lead to cost reduction.

Tags: Criticize sustainability, 5 ways to integrate environmental concerns into your business,

Differentiate products, Manage your competitors, Save cost, Manage environmental risk,

Redefine markets


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Rugman, AM; Verbeke, A (1998):

Corporate strategies and environmental regulations

The article integrates literature on environmental regulations from the viewpoint of

managers making corporate strategy decisions. They do this through the developmentof an organizing framework consisting of three related and sequential parts. The

resulting integrated framework helps to advance the present debate on corporate

strategy, trade and environmental regulations by providing a resource-based view of

the interaction between firm-level competitiveness and environmental regulations.

Tags:

Day, G.S.; Schoemaker, P.J.H. (2011)

Innovating in uncertain markets: 10 lessons for green technologies.

Hall, J. and H. Vredenburg (2003):

The Challenge of Innovation for Sustainable Development

SDI pressures: Sustainable development pressures create needs, but how can companies reap the

benefits of SDI? Schumpeters reference to irresistible and irreversible innovation is driven more

by the market (quadrants 1 and 2) than by public policy (quadrants 3 and 4). Many companies

will not implement carbon dioxide reductions without government pressures in the form of

scheduled or anticipated regulations, such as those from the Kyoto Protocol on Climate Change.

Instead, companies might very well revert to the old emissions standards once the Kyoto

Protocol expires.

Sustainable Development Innovation (SDI), is usually more complex because there is a wider

range of stakeholders and more ambigous, as stakeholders have contradicting demands.

This gives uncertaunty and SDI is thus difficult and risky. Some say SDI created creative

destruction (Schumpeter). Arguemtn is also that incremental innovation is insufficient to meet

sustainabale development pressure, you need radical innvotation. Complexity of new

secondary stakeholders: example of genetic modification, maybe it was scientific apprved, but

npt in the minds fof public and authorirtes (secondary stakeholders). Made model 'The

doubled-edged sword of innovation' see p. 64. Normally business exectuves focus on 1 and

2, wheres public policymakers focus on 3 and 4, SDI has to manage all 4! Talking also about

imcubent inertia and path dependecy. There are stakeholder complexity due to many

stakeholders, and also ambigiuty because different stakeholders interpret things differently.

Case exmples from Canada with oil producers making wind energi. They got a competitve

advantage in having valuabel relation to the gonverment, that is political lobbying.

Monsantowho made genetic modifitication did not, and did not succed as they did to manage

all 4 factors.

Tags


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Session 20 - Open innovation in services and the interplay

between business strategy and business mode

Casadesus-Masanel, R. and J. E. Ricart (2010):

From Strategy to Business Models and unto Tactics

Chesbrough, H. (2011):

Open Services Innovation

Innovation communities, ecosystems, networks and their implication for competitiveadvantage: 'open strategy'. This is an important approach for those who wish to led through

innovation. Openness is defined as the pooling of knowledge for innovation purposes where

the contributions have access to the inputs of others and cannot exert exclusive rights over

the resultant innovation. The value of openness is actually enhanced with every user in two

ways. First users contribute ideas and content to improve quality and variety of products, e.g.

Myspace, Linux and Wikipedia. Open invention. Open Coordination, Moore's Law,

Intel/Microsoft etc. See model on p 63 with Where you look at 1) Value capture 2) Value

Creation. You see whether value is created by 1) In-house 2) Community-driven, and who

captures the value 1) Ecosystem 2) Company. Important for the company that they end up

capturing value, and good if its actually community-driven value creation, e.g. YouTube. The

opposite example is where musicians create value in house but it is the ecosystem thatcaptures value through pirating. Read more on p. 64. Open Source Software Business

Models: 1) Deployment, heighten user-experience, e.g. support and professional service, and

people ar willing to pay 2) Hybridization, freemium model 3) Complements, You sell cellphone

(Hardware), and the software to is open-source and free 4) Self-Service, here users create

software for themselves, it can be argued this does not have element of value capture.

Example of IBM investing i Linux, takes 500 million to create OS. IBMS spend 100 m om

Linux development, and 50 million on IBM specific improvements. Open initiatives must

confront serious challenges to their ability to sustain themselves over time.

Documents

Notes - Quick Overview