...Long Range Planning 43 (2010) 172e194 http://www.elsevier.com/locate/lrp Business Models, Business Strategy and Innovation David J. Teece Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. Ó 2009 Published by Elsevier Ltd. Introduction Developments in the global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the establishment of reasonably open global trading regimes, mean that customers have more choices, variegated customer needs can find expression, and supply alternatives are more transparent. Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. These...
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...Competitive advantage arising from fit across activities • Sustainability coming from the activity system, not the parts • Operational effectiveness as a given Organizational Change 3 Phases of renewal / reforming of traditional organization • Vertical Disaggregation – disaggregation reduces the size of the organization by eliminating jobs and layers of middle managers and levelling the hierarchy. • Internal Redesign – alters the internal design of the organization, innovation in designing products to meet customer needs, offering value to customers, and retaining customers. • Network Formation – formation of relationships with other organizations or expanding relationships with suppliers, customers, and even competitors. Components of Strategy • Deciding Corporate Vision – management’s vision defines what the corporation is and what it does and provides important guidelines for managing and improving the corporation. • Objectives- it is need to be set so that the performance of the enterprise can be gauged. o Areas of Corporate Objectives marketing, innovation, resources, productivity, social responsibility, and finance • Capabilities – offers the organization the potential to compete in different markets, provides significant value to end user customers, and create barriers to competitor duplication. • Business Composition – provides direction for both corporate and marketing strategy design, separates business into parts to facilitate strategic analyses and planning...
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...Introduction Author Mark Johnson is chairman of Innosight, a strategic innovation consulting and investing company with offices in Massachusetts, Singapore, and India, which he cofounded with Harvard Business School professor Clayton M. Christensen. He has consulted to Global 1000 and start-up companies in a wide range of industries—including health care, aerospace/defense, enterprise IT, energy, automotive, and consumer packaged goods—and has advised Singapore’s government on innovation and entrepreneurship. Book The book is focused on business model innovation and introducing a simple framework for thinking about potential business model innovations and evaluating the positives and negatives of a potential business model. Then it continues to define the parameters of the ‘white space’, which is the uncharted territory for any organization. This can be either geographical, demographical or product distinctions. Mark W. Johnson understands that white space is difficult to define. Where white space may represent available opportunities outside of one company’s area, those same opportunities may represent the core business for another organization. In the case of a company considering entering a white space, there is the challenge of risk. For many organizations, the risk of failure is considered too great, and many potential new products and markets are missed as a result. The compromise position, taken by many enterprises, is to enter into related markets, adjacent to their...
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...Long Range Planning 43 (2010) 172e194 http://www.elsevier.com/locate/lrp Business Models, Business Strategy and Innovation David J. Teece Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. Ó 2009 Published by Elsevier Ltd. Introduction Developments in the global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the establishment of reasonably open global trading regimes, mean that customers have more choices, variegated customer needs can find expression, and supply alternatives are more transparent. Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. These...
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...Long Range Planning 43 (2010) 172e194 http://www.elsevier.com/locate/lrp Business Models, Business Strategy and Innovation David J. Teece Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. Ó 2009 Published by Elsevier Ltd. Introduction Developments in the global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the establishment of reasonably open global trading regimes, mean that customers have more choices, variegated customer needs can find expression, and supply alternatives are more transparent. Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. These developments...
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...QUESTIONS: 1. What is innovation management? Innovation management is the regulation of managing processes in innovation. According to Richard Feynman innovation is all about discovery. Innovation management is the process of capturing and managing organizational innovation. Today many companies have organization-wide innovation management programs. This is due to increased recognition that innovation is essential for motivating business growth and maintaining competitive advantage. Competency: Every institute/organization has its own history and set of capabilities, which determine its innovation competency. And innovation has build a powerful framework based on competence and obligation that will help organization to become a world-class innovator Strategy: As manager knows, resource allocation is critical to strategy and therefore needs to be an integral part of aligning innovation to strategic objectives. Management: Any top company in this world should arrange resources cleverly and needs to manage innovation efficiently; this should be the primary objective of a organization. 2. Why is entrepreneurship training considered important for engineers? In the article it states clearly why it is so significant for engineers to understand entrepreneurship training. Engineers need to be entrepreneurial in order to understand and contribute in the framework of market and business pressures. For engineers who establish organization soon after graduation...
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...Assignment in Production and Operation Management 1. Production/operations management is the process, which combines and transforms various resources used in the production/operations subsystem of the organization into value added product/services in a controlled manner as per the policies of the organization. Therefore, it is that part of an organization, which is concerned with the transformation of a range of inputs into the required (products/services) having the requisite quality level. Production function is that part of an organization, which is concerned with the transformation of a range of inputs into the required outputs (products) having the requisite quality level. Production is defined as “the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user.” Thus production is a value addition process. At each stage of processing, there will be value addition. 2. Operations Management The study of set of activities comprising supervision, planning and designing of business operations in the field of manufacturing of goods and services is termed as operations management. The purpose of operations management is to make certain that the operations of a business are efficient and effective and result in minimum of wastage. Operations management tries to cut down resources involved in operations while at the same time making operations more effective and productive...
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...5 4. Strategies followed by Google 5 4.1 Involvement of top leadership 5 4.2 Project Kennedy 5 4.3 Launch & Iterate 5 4.4 Lead Users 5 4.5 Leveraging employees for fostering innovation 5 4.6 TGIFs & FIXITS 5 4.7 Googlegeist 5 4.8 Google Moderator 5 4.9 Google X & Moonshot mentality 5 4.10 Recruitment policy 5 5. Google’s eight pillars of Innovation 5 6. Results 5 7. Issues faced by Google with respect to Corporate Entrepreneurship 5 8. Conclusion 5 9. References 5 Executive Summary Corporate Entrepreneurship is a concept in Strategy whereby companies in order to trigger innovation in their organization tap into the entrepreneurial ability of its employees. The process of innovation can vary and methods are different for mature organizations and young organizations. In this project we have tried to review the how corporate entrepreneurship is employed in Google to innovate its products and services. As Google is a young company competing in the technology and internet industry the threat of becoming obsolete is high. The sector is attributed with rapid innovation with each competitor trying to outdo each other. Thus, Google follows an organization wide approach for corporate entrepreneurship where innovation and independent projects are encouraged at all levels of the organization. Google has adopted the...
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...9-609-066 REV: MARCH 4, 2010 STEFAN THOMKE BARBARA FEINBERG De esign Th hinking and I Innovation at Apple Th hink different. — Apple Advertising Slogan, 1997 e 7–2002 By the beginnin of March 2010, weeks after the dramatic debut of its iPad, A y ng Apple’s share price remai ined in the US$ 200 range, where it had hovered for more than f six month U d for hs—signaling solid g financ strength and future gr cial a rowth prospec as world e cts economies, an businesses continued t reel nd s, to from the worst rec cession since the Great De epression. Wit a market c th capitalization of nearly US 200 S$ billion and annual sales appro n oaching $50 b billion, Apple was now w e worth more t than the indu ustrial giant General Elec ctric and exce eeded the val of Sony C lue Corporation b a factor of five, even th by hough both f firms had larg revenue b ger bases. All the more amazin ngly, a scant 12 years earlie when Steve Jobs er, e return to Apple, the company share pric had hovere around $5 and the futur was uncert ned , y’s ce ed re tain at best. J Jobs, after all had already been fired fr l, y rom the firm he co-founde almost a d ed decade earlier and r, he wa coming bac when the c as ck company was nearly writte off. Even s through th difficult pe s en so, hat eriod, the co commitme to produc design and development had stayed a ore ent ct t alive. Sin being fou nce unded in 197 Apple has been consid 76, s dered a leading designer and integrat of tor computer hardwa and softw...
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...* Communication and other Interaction processes The secrets to successful strategy execution: * Study – Important strategic and operational decisions aren’t quickly translated into action * Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest * 4 fundamental building blocks executives can use to influence those actions (17 traits fit into each of these blocks) * Clarifying decision rights - Everyone has a good idea of the decisions and actions for which he or she is responsible * Designing information flows (Important information about the competitive environment gets to headquarters quickly. The way to ensure that the right information flowed to headquarters was to make sure the right decisions were made much further down the organization.) * Aligning motivators * Making changes to structure * Changes to an organization’s structure and motivators are less important than Proper information flows and Decision Rights in the implementation of a successful strategy. * How these 17...
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...* Communication and other Interaction processes The secrets to successful strategy execution: * Study – Important strategic and operational decisions aren’t quickly translated into action * Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest * 4 fundamental building blocks executives can use to influence those actions (17 traits fit into each of these blocks) * Clarifying decision rights - Everyone has a good idea of the decisions and actions for which he or she is responsible * Designing information flows (Important information about the competitive environment gets to headquarters quickly. The way to ensure that the right information flowed to headquarters was to make sure the right decisions were made much further down the organization.) * Aligning motivators * Making changes to structure * Changes to an organization’s structure and motivators are less important than Proper information flows and Decision Rights in the implementation of a successful strategy. * How these 17...
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...rP os t 9-605-069 REV: MARCH 6, 2013 AMY C. EDMONDSON Phase Zero: Introducing New Services at IDEO (A) op yo In July 2002, Douglas Dayton looked out across the space where designers, engineers, human factors experts, and other specialists worked in teams and reflected that it was not easy to evaluate the recent project carried out for mattress manufacturer Simmons. Dayton was a design engineer and head of IDEO’s Boston office. IDEO was a design and innovation firm known for the extraordinary range of products it had designed and its innovative approach to the design process. For the Simmons project, IDEO had embarked on a service that was not intended to result in a tangible product, at least not right away. Whereas a typical design project progressed through four phases designed to “do the thing right,” this service, known as “Phase 0,” was intended to help a client “do the right thing.” Rather than design a new product based on pre-specified needs, Simmons had asked IDEO to help it “look for unmet needs that exist and to identify new product opportunities.” The project proposal, entitled “Understand and Innovate,” described Phase 0 services as helping clients understand the world in a new way and innovate accordingly. At first glance, mattresses were not exciting territory for the firm, but as the team researched mattress consumers— conducting literature reviews, site visits, and interviews with customers and salespersons—they grew intrigued...
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...success for Apple is the “Apple way” of doing the things. From the initial stage of company, it starts thinking and doing things differently than the competitors or the market trend. When there were computers only for the government organizations and big corporations, Apple made vision to launch computers for individuals and made it success by lunch of Apple1 personal computers. Also, it’ simplest and user friendly interface with sophisticated features and functionality make its product unique from competitors. It incorporates lots of creativity and ingenuity used by designers and engineers make innovations to happen more possible. It also uses integrative customer’s experience into the designs and development process which helps the products according to desire of customers and it give higher level of satisfaction to its users. Though it has simpler and user-friendly interface, its internal development model is so complex that it is unable to duplicate by competitors. The evaluation required for the inception of new product includes: a marketing requirement document, an engineering requirement document, and a user-experience document. This makes visionary for company to get success before product is lunched. The company give focus on everything from designing to packaging and shipping of its product. The other most important thing to be considered is Apple products like iPhone, iPad, iPod, iMac are mostly depicted by media tempting their popularity giving the sense of popular, trendy...
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...Innovation, Creativity and Design Goals and objectives are important to a successful strategy of any business. Innovation, creativity, and design are tools that enable us to build an idea or product able to generate income for an organization. Understanding which attribute is most important is difficult without first defining each one to realize how they interact with one another. Definitions “Creativity is the act of generating an idea and is done by an individual, not a team,” (Von Stamm, 2008). In addition to this understanding, Von Stamm further states, “Creativity alone, to come up with ideas, is not enough. In order to reap the benefits, one needs to do something with it” (p. 3). Innovation is left described as creativity plus the successful execution in the marketplace of the idea. Govindarajan (2010) takes that definition even further by stating, “Innovation is creativity multiplied by execution. Multiplication is used rather than sum because, if either creativity or execution has a score of zero, then the capacity for innovation is zero” (para. 2). When defining innovation, one could use Von Stamm’s description or Govidarajan’s account; either way creativity clearly comes first. It is becoming clear, however, that creativity is useless without the innovation to bring the idea to life. The third attribute is design, which simply put, is the process used to execute the original idea. This basic level of understanding of the three attributes is important to the success...
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...“Netnography as a method of lead user identification”, Creativity and Innovation Management, Vol. 19, pp. 304-13. Bennett, R. and Cooper, R. (1981), “The misuse of marketing: an American tragedy”, Business Horizons, Vol. 24 No. 6, pp. 51-61. Blazevic, V. and Lievens, A. (2004), “Learning during the new financial service innovation process: antecedents and performance effects”, Journal of Business Research, Vol. 57 No. 4, pp. 374-91. Bowers, M.R. (1989), “Developing new services: improving the process makes it better”, The Journal of Services Marketing, Vol. 3 No. 1, pp. 15-20. Carbonell, P., Rodriquez-Escudero, A.I. and Pujari, D. (2009), “Customer involvement in NSP: an examination of antecedents and outcomes”, Journal of Product Innovation Management, Vol. 26, pp. 536-50. Carlile, P. (2001), “A pragmatic view of knowledge and boundaries: boundary objects in NPD”, Organization Science, Vol. 13 No. 4, pp. 442-55. Chesbrough, H.W. (2003), Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, Boston, MA. Christensen, C. (1997), The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Harvard Business School Press, Boston, MA. Cooper, R.G. and Kleinschmidt, E.J. (1994), “Determinants of timeliness in product development”, Journal of Product Innovation Management, Vol. 11 No. 5, pp. 381-96. Dahan, E. and Hauser, J. (2002), “The virtual customer”, Journal of Product Innovation Management, Vol. 19 No...
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