Chapter Four: Developing an Innovation Strategy
To successfully incorporate knowledge from competitors and external sources into an innovation strategy, a company must cultivate a robust absorptive capacity. Which two principal components are essential for fostering this capacity?
- Costly investments in Research and development (R&D) - Costly investments in training and skills development
What 3 terms does 'Intangible' resources recognize?
- Employee skills - Intellectual Property - Brand reputation
What main factors should be taken into account concerning constraints and opportunities when devising an innovation strategy? (Tip: These are all factors in relation to national/International innovation systems)
- Forms of corporate governance (Corporate politics) - The Provision of human resources (How much expertise exists in the decided market and its difficulty level to obtain) - Strong influences on demand and competitive conditions (How much do the market want this type of product and is it worth to compete with other companies to get it)
What 3 terms does 'Tangible' resources recognize?
- Location - Plant and equipment (Company infrastructure) - Economic Assets
What are the specific investment-duties of management in the formulation of an innovation strategy, and what is the overarching goal for these investments?
Management is tasked with deciding on investments in key areas: - Production processes - Marketing initiatives - Service and support mechanisms - Strategic positioning The overarching goal is to carve out a competitive position for the company in both domestic and international innovation networks.
Differentiate between tangible and intangible resources and why neither give a greater competitive advantage.
Tangible resources, like buildings and machinery, can be easily bought or replicated, so they typically don't offer a lasting competitive advantage. Intangible resources, such as brand reputation and intellectual property, are unique but can be imitated over time or lose value if not managed well. Thus, neither type inherently provides a greater competitive advantage; it's how these resources are utilized and combined that determines their potential to sustain a competitive edge.
What are 'dynamic capabilities' and why are they critical for organizations, especially under conditions of uncertainty?
They refer to an organizations ability to systematically adapt, innovate and renew its resource base to adress rapidly changing environments. They are critical for organizations as they allow for responsiveness to market changes, fostering long-term growth and survival, especially during times of uncertainty.
Define 'capabilities' in the context of organizational resources and explain how they contribute to a company's competitiveness.
They refer to the companiy's ability to effectively utilize its resources to achive specific goals and outcomes. They contribute to a company's competitiveness by enabling it to create value in aways that are unique and difficult for competitiors to imitate, thus providing a sustainable competitive edge.