ITO

Define contract manufacturing

A form of outsourcing whereby a firm hires another firm to manufacture its products.

Draw the technology alliance strategies matrix

Individual alliance Network of alliances Capability A B Complementation Capability C D Transfer

Define trade secret

Information that belongs to a business that is held private (coca cola recipe)

Define innovation

Innovation is the practical implementation of an idea into a new device of process.

Why is innovation important?

It is a major source of profitability and growth

What are the modes of collaborating?

Strategic alliance Joint venture Licensing Outsourcing Collective research organization

Resources can be tacit, socially complex, or causally ambiguous. Describe each

Tacit resources: resources of an intangible nature (such as knowledge) that cannot be readily codified. Socially complex resources: resources or activities that emerge through the interaction of multiple individuals. Causal ambiguity: the relationships between a resource and the outcome it produces is poorly understood.

Define technological innovation

Technological innovation is the act of introducing a new device, method, or material for application to commercial or practical objectives

Define technological spillovers

Technological spillovers are a positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries

What are the components of value?

Technological utility: product features Installed base: number of people using the product or service Complementary goods availability

S-curves pertain to what?

Technology improvement and technology diffusion

Define technology trajectory

Technology trajectory is the path a technology takes through its lifetime. This path may refer to its rate of performance improvement, it's rate of diffusion, or other change of interest.

Give some examples of legally induced adherence to dominant design

Utilities, telecommunications, and television industries

The internal analysis consists of support activities and primary activities. List both

Primary activities: inbound logistics, operations, outbound logistics, marketing, service Support activities: firm infrastructure, HRM, technology development, procurement

Describe product versus process innovations

Product innovations are embodied in the outputs of an organization (goods and services) Process innovations change the way an organization conducts business. Product innovations can enable process innovations

What is vaporware?

Vaporware is a tactic whereby products that are not actually on the market and may not even exist but are advertised.

What two factors should be assessed before partner selection

Resource fit Strategic fit

Define appropriability

Appropriability is the degree to which a firm is able to capture the rents from its innovation.

Define discontinuous technology

Discontinuous technology is a technology that fulfills a similar market by building on an entirely new knowledge base. Examples include: propeller planes to jets, chemical photography to digital, carbon copying to photocopying etc...

Define dominant design

Dominant design is a product design that is adopted by the majority of producers, typically creating a stable architecture on which the industry can focus its efforts

Draw the technology cycle diagram and describe its parts

Each technological discontinuity created a period called the era of ferment which is full of turbulence and uncertainty. Once a dominant design is selected, there is an era of incremental change where firms attempt to simplify the product design.

Is it better to be a first mover, an early follower or a late entrant?

Early follower

Define network externalities

Network externalities (also known as positive consumption externalities) occur when the value of a good to a user increases with the number of other users of the same or similar good. (BBM)

What is the standard form of the learning curve equation?

Y = ax^-bY is the number of direct labour hours required to produce the xth unitA is the number of direct labour hours required to produce the first unitX is the cumulative number of units producedB is the learning rate

The s-curve is not a prescriptive tool because:

- It is rare that a technology's limits are known in advance - unexpected changes in the market can influence the performance - development activities (incremental upgrades like with the iPhone) can influence the s-curve

What are the five degrees of technology protection

- Wholly proprietary - limited licensing - moderate licensing - liberal licensing - wholly open

List five potential sources of innovation

- firms - universities - government funded research - private nonprofits - individuals

What factors have attributed to the increasing importance of innovation?

- globalization of markets - advanced technologies like computer aided design and computer aided manufacturing

What are the four reasons for going solo (not collaborating)?

1. Availability of capabilities 2. Protecting proprietary technologies 3. Controlling technology development and use 4. Building and renewing capabilities

What are the first mover advantages?

1. Brand loyalty and technological leadership 2. Preemption of scarce assets 3. Exploiting buyer switching costs 4. Reaping increasing returns advantage

First mover disadvantages

1. Higher research and development expenses 2. Undeveloped supply and distribution channels 3. Immature enabling technologies and complements (advanced PDA's with crappy batteries) 4. Uncertainty of customer requirements

What are the nine factors that influence the optimal timing of entry?

1. How certain are customer preferences? 2. How much improvement does the innovation provide over previous solutions? 3. Does the innovation require enabling technologies, and are these technologies sufficiently mature? 4. Do complementary goods influence the value of the innovation, and are they sufficiently available? 5. How high is eye threat of competitive entry? 6. Is the industry likely to experience increasing returns to adoption? 7. Can the firm withstand early losses? 8. Does the firm have resources to accelerate market acceptance? 9. Is the firm's reputation likely to reduce the uncertainty of customers, suppliers, and distributors?

What are the advantages to collaboration?

1. It can enable a firm to obtain necessary skills or resources more quickly than developing them in house 2. It can help a firm reduce its asset commitment and enhance its flexibility 3. It can be a source of learning for the firm 4. It can help to share the costs and risks of a project 5. Collaboration may also facilitate the creation of a shared standard

What are the four types of innovation?

1. Product versus process innovation 2. Radical versus incremental innovation 3. Competence-enhancing versus competence-destroying innovation 4. Architectural versus component innovation

In order to assess the current position of a firm, it is important to do an external analysis. Porter's Five Force model can be used for this. Explain the Five Force model.

1. The degree of existing rivalry 2. Threat of potential entrants 3. Bargaining power of suppliers 4. Bargaining power of buyers 5. Threat of substitutes

What three things must a US invention have in order to be granted a patent?

1. Useful 2. Novel 3. Not be obvious Additionally, the discovery of scientific principles that pertain to natural laws (gravity) cannot be patented.

Draw the normal curve of diffusion of innovation and adopter categories.

2.5% - innovators 13.5% - early adopters 34% - early majority 34% - late majority 16% - laggards The two majority sections are known as the critical mass

Define licensing

A contractural arrangement whereby one organization or individual (the licensee) obtains the rights to use the proprietary technology of another organization or individual (the licensor).

Define joint venture

A joint venture is a partnership between two or more firms involving a significant equity stake by the partners and often resulting in the creation of a new business entity.

Describe the innovation funnel

A method of narrowing down a few product launches from a large number of ideas

Define dominant design

A single product or process architecture that dominates a product category - usually 50% or more of the market. A dominant design is a de-facto standard meaning that while it may not be officially enforced work acknowledged it has become the standard for the industry.

Define alliance contracts

Alliance contracts are legally binding contractural arrangements to ensure that partners are fully aware of their rights and obligations in the collaboration, and have legal remedies available if a partner should violate the agreement

Define alliance

Alliance is a general term that can refer to any type of relationship between firms. Alliances may be short or long term and may include formally contracted agreements or be entirely informal in nature.

What is an installed base?

An installed base is the number of users of a particular good. (Number of video game consoles installed in people's homes)

Basic research versus applied research

Basic research is targeted at increasing scientific knowledge for its own sake. It may or may not have any long term commercial application. Applied research is targeted at increasing knowledge for a specific application or need.

Both the ______________ and the _________________ have been shown to conform to an s-shaped curve.

Both the RATE OF PERFORMANCE IMPROVEMENT and the RATE OF ADOPTION have been shown to conform to an s-shaped curve.

What is the difference between capability complementation and capability transfer?

Capability complementation: combining the capabilities and other resources of partner firms but not necessarily transferring those sources between partners. Capability transfer: the exchange of capabilities across firms in such a manner that partners can internalize the capabilities and use them independently of there particular development project.

Describe competence-enhancing versus competence-destroying innovation

Competence-enhancing build on the firm's existing knowledge base Competence destroying renders a firm's existing competences obsolete

Describe architectural versus component innovation

Component (or modular) innovation entails changes to one or more components of a product system without affecting the overall design (gel in bike seat) Architectural innovation entails changing the overall design of the system or the way the components interact

Externalities have an impact on society, define externalities

Costs (or benefits) that are borne (or reaped) by individuals other than those a responsible for creating them. For example, pollution imposes a negative externality on the community members.

Define creativity

Creativity is the ability to produce novel and USEFUL work

Define equity ownership

Equity ownership is when each partner contributes capital and owns a specified right to a percentage of the proceeds from the alliance

Entrants are often divided into what three categories?

First movers Early followers Late entrants

What makes an ability (or set of abilities) a core competency?

In order for the ability(ies) to be considered a core competency, it must be a factor that differentiates it strategically. Core competencies typically combine and harmonize several different kinds of abilities.

What are network externality effects?

Network externality effects arise when the value of a good to a user increases with the size of the installed base

Define original equipment manufacturers

OEM's are firms that assemble goods using components made by other manufacturers, also called value-added resellers (VARs)

What is the difference between a patent, a trademark and copyright?

Patent: a property right protecting a process, machine, or manufactured or variety of plant. Trademark: an indicator used to distinguish the source of a good (symbol or slogan). Copyright: a property right protecting works of authorship

Describe radical versus incremental innovation

Radical refers to the degree to which the innovation is new and different from previously existing products and processes Incremental innovations involve a minor change to an existing practice The radicalness is relative (digital photography more radical for Kodak than Sony)

Define relational governance

Relational governance are self-enforcing norms based on goodwill, trust, and reputation of the partners. These typically emerge over time through repeated experiences of working together.

What factors do you think influence the rate at which consumers have adopted (or will adopt) the Tata Nano?

The Tata Nano's perceived safety and quality will likely impact it's technology trajectory.- Adoption will be slow initially because it is an unfamiliar product- it will accelerate as the technology becomes better understood (as long as it works as consumers want it to)- eventually, the market will become saturated and the rate of adoption will decline

Case: is the Tatar Nano a radical innovation or an incremental innovation? Competence enhancing or competence destroying, and from whose perspective? Component or architectural innovation?

The Tata is a radical innovation since it has many features that have never before seen in a car before and all of these features were implemented at the same time. It used a benchmark of two wheeled scooters making it have features akin to a cross between a car and a scooter.It is competence enhancing for Tata because they can use steel in the cars. It is also competence enhancing for Tata's suppliers since they are being forced to come up with innovative components. It is not competence destroying for competitors in the low end car market since some consumers may want a bit better quality than a Tata. I think it is an architectural innovation because it is a change in the overall design (two calendar engine) and the way the parts interact (fuel chamber with the engine)

Define absorptive capacity

The ability of an organization to recognize, assimilate, and utilize new knowledge.

Define learning curve

The learning curve depicts the impact of cumulative production on cost (which drops) and productivity (which increases).

What are increasing returns to adoption?

The more they are adopted, the more valuable they become

Explain the parallel development process

The parallel development process is when multiple stages of the new product development process occur simultaneously

Define incumbent inertia

The tendency for incumbents to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers