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game.
There is no menu of generic strategies available. Innovation must support business strategy.
Play-to-Win Strategy
Goal is to produce significant competitive advantages that its
semi-radical innovation to drive transformation in the firm create market-changing ideas and product. PTW firm invests in changes in technology and business models
A PTW Strategy is typical of high-technology startups
have only one or two innovation investments do not have the strength of a strong investment portfolio
Play-Not-to-Lose Strategy
Use PNTL strategy when: external competitive environment is extremely intense or uncertain.
if a firm has significant internal constrains. PNTL Strategy is of more incremental innovation than PTW
Johnson
& Johnson
The goal is to ensure the firm stays in the game by moving quickly,
taking calculated risk by matching or surpassing any moves by competitors. Firm using PNTL would watch for improvement in the external environment, make improvement in its internal capabilities, attempt to wear down the competition, and look for opportunity to shift to a PTW strategy at the appropriate time.
changes in technology and business models occur quite rare. The winner are firms that consistently beat competitors in making incremental improvement to technologies and business models. Risk with PNTL: highly vulnerable to competitors that break from the pack and shift to a PTW that depends on semi-radical or radical innovation believing your PNTL is working when it does not work.
or Die
many innovative ideas for firms to process clouds their judgment on which ideas are truly great. A lack of radical innovation can lead to failure
Innovate
taking
and die
the wrong kind of risk and by playing the wrong kind of strategy.
stale in our fast forward economy, strategies reach their sell-by date faster then ever.
Internal Factors External Factors
Capabilities in the external network Industry structure Competition Rate of technological change
Internal Factors
Technical capabilities
The current capabilities that company has internally or can access through its innovation network Shifting to a more radical innovation approach will not happen if the organizational and management capabilities are not present The greater the success, the greater the potential resistance to change
Organizational capabilities
Funding-too much funding may be a dangerous as too little Top management vision
Management talent has a very relevant role in selecting and evolving the companys innovation strategy
External Factors
Capabilities in the external network
Assesses to the relevant capabilities are crucial Collaboration with other organization that have complementary resources The ability to create sustainable alliances with partners becomes important in deciding the innovation strategy going forward
Industry structure
Industry value chain Who dominates and why The structure of the barriers to entry are important inputs to the design of innovation strategy
Competition
The Quality and speed of innovation of your competitors as well as your innovations will determine the shape of the market in the years to come
When new advance outdate your product, it is important to identify the change approaching before your product goes old.
competitive arena, as we move up and right on the innovation Matrix, the level of risk that we take is higher
risky path
Lose Strategy, why? Because it relies on a larger component of semi-radical and radical innovation, ex Appel-ipod
successfully and the flow of viable new products has been difficult to maintain 1. Attempts to Solve the Innovation Problem 2. Changing the Innovation Approach
other companies, thereby combining their R & D piplines to attain economics of scale
closer ties to biotech and genome organizations in order to get better information on new molecules with the promise for use in new drugs
innovation approaches
drugs Unbalanced innovation portfolio and are addicted to technology The potential gains for a successful breakthrough can be tremendous It would be careful for pharmaceutical companies to consider shifting their strategy-pursuing semi-radical technology changes to pursuing break-throughs in new business model
business models
1. 2. 3.
To create competitive advantages to the complement its technology investments Would allow it is to serve markets better than its traditional competitors The company would also maximize the return on its innovation investment Increase level of services Change in the supply chain or a similar operational breakthrough Close, better connections to the players
Innovation options:
1. 2. 3.
innovation? What portfolio of innovation types do I need? How much business model innovation? How much technology innovation? What mix of incremental, semi-radical, and radical innovation?
Thank you!