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 external environment, 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, and ability 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

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

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 is subsidized, 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

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,

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 firms environmental 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) Ecoefficiency 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 down Detroit-knows-best model for automating and instead build an ecosystem of innovation that harnesses 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

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 to motuh, 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

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, the Convergence 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 onestop 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??

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 of success. 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 from pioneering or from other basic characteristics. Also important to look at long-term or shortterm, 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.

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, Niche market 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 SlowFast: 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

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 be gained. 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. 88 shows 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 and domestice 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 setup 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 partial support 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 an innovation 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 to secure 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 either Innovation 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 visibility and 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 can help 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 ressources gives 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, Complementary resources/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, this might 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 24 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 method depend 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 just motivated 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 lowend 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 helps customers 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: Gain competetive 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 that change 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. Home worksplaces 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, new things, 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 development of 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 competitive advantage: '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 that captures 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.

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