a. Describe the six major strategies through which innovation process management systems have evolved.
The processes (a) setting horizon (what do we want to do and how long are we willing to continue), (b) industry forecasting (needs a lot of expert input, research and analysis), (c)technology positioning (what can work for us, can we link present to future, position investment for greatest profit), (d) determining technology availability, (e) appropriating technology (must decide if what is available can be exploited) and (f) managing technology (both internally and externally).
In a traditional strategy the internal departments are expected to produce new knowledge technology. Entry is focused on the R&D department. This is a great way to pioneer a new and innovative product although setting a development end date is not possible so setting a horizon for the end of the development process is more realistic. For example global positioning systems (GPS) did not become fully commercialized until twenty years after its successful development. Personal computers (PCs) are common all over the world today but it twenty years to meet 20 percent market penetration. Appropriating technology can be achieved by acquiring new technology by purchasing it. Early-mid entry strategy is when a license is purchased to use another innovator’s product. Entry may also be through acquisition or buy-out. The basic invention and development in the R&D department is skipped, instead the purpose is commercial. This reduces the risks and costs of basic research. Before a purchase is made thorough research is necessary in order to make sure the capabilities and resources of the company are a good match to the technology; technology positioning.
Appropriating technology can be done by acquiring technology then developing innovative uses or services. Mid-late entry strategy is by purchasing or licensing technology which is not new to the market anymore; that lowers purchase or license cost. The company is set up to produce and sell enough volume that they can compete with the existing market. This requires accurate industry forecasting.
An example of how managing technology is mostly done now is both internal and external. Technology is integrated through an organization. In strategic management of technology, three equal factors are necessary (a) acquisition, (b) management, and (c) exploitation. The goal of strategic management of technology is to gain a competitive edge in the market.
b. What dynamics are driving the shift towards network innovation generally and towards innovation specifically?
(a) Technology is changing and evolving very quickly, (b) customers are very network savvy and want to purchase products that help them problem solve on their own, (c) customers looking for something “unique,” different or something individualized, (d) shareholders want more profits, (e) globalization intensifies competition (competition is now both local and global), (f) new products are not enough to satisfy the market that is shifting to a need or desire for solutions - Changing to a service orientation requires a focus on knowledge and competence. Technical, partnership and integration are the three basic competencies to master for success.
The complexity of needs of the consumer and the market are part of the drive for network innovation. Low and high end disruptions are two others. And the different needs of the business environment and the home user of the same product. Consumers want new products (“40 percent of sales come from new product”). Services are now “70 percent of the total aggregate production and employment of OECD countries.” Internet makes the services globally available. So three big pressures the rapidly changes in technology, the problems of staying competitive in a global market and the emphasis on the knowledge based economy.
a. Discuss the factors a firm must consider when developing a strategic supply chain.
The design of a strategic supply chain must be sensitive to the needs of product development and shifts in the market. Product development relies on the supply chain to make sure they have the ‘raw materials’ or the source components available when they are needed. The sourcing of components is reliant on the supply chain and so is co-development of components. An efficient and fast supply chain will realize cost savings. There is such a thing as customer satisfaction which is mirrored in the supply chain relationship with supplies. It is necessary to build a strong reliable relationship with suppliers (this is the ideal situation not always possible in real life). Finally the supply chain is the absolutely important in making sure the end product is introduced to the market and stays in the market.
On the other side supply chain needs to be aware of market shift. That means it must be able to withstand changes by remaining flexible. Supply chain is responsible for constant improvement in timely delivery. Cost is also an issue between supply chain and market shifts because the supply chain should be able to identify and take advantage of ways to lower cost. And the supply chain must be sensitive and responsive in their relationship with customers.
b. Explain the critical role information plays in enabling supply chains.
Information is critical to the smooth operation of supplies. Communication avenues must be reliable and quickly accessible for the times quick changes and speedy decisions need to be made. Two components are constantly flowing through a supply chain from the beginning of the process to the end: information and materials. Accurate information can ensure customer satisfaction, receiving the right raw materials at the right time and good communication with employees. Information is critical even after the end product has been finished. Right away the product goes to the distributor so it can be shipped to the shipper and the merchant. The more efficient the processes are that make a quality product that is purchased by the computer the better it is for the company. Information is passed to the consumer in the form of advertising. The consumer passes information back to the supplier about satisfaction with the product or innovations that they may request. Quick response times are essential in order to replenish raw materials or the end product to merchants.