Fred Managing Innovation, Technology, and Entrepreneurship

1. Auflage 2009
ISBN: 978-1-84126-448-6
Verlag: Meyer & Meyer Sport (UK) Ltd.
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 344 Seiten

This book offes an overview of all three subjects - innovation, technology and entrepreneurship - that fits well with the compressed curricula in modern MBA programs. The affordable and easy-to-carry volume fits the needs of students in the targeted countries. If offers a comprehensive approach whereas other competing books are dated and/or deal only with two of the three subjects found in this book.

Fred Phillips is Professor of Entrepreneurship at Maastricht School of Management. He is also Professor of Management at Alliant International University in California, and Affiliate Professor at Pontificia Universidad Catolica de Lima in Peru.He is a Senior Research Fellow at the IC2 Institute, a renowned think-tank and incubator on technology and entrepreneurship at the University of Texas at Austin. He is Series Co-Editor for the MSM Series on Intercultural and Global Management. He is a founder and former member of the Advisory Board of the Austin Technology Council, and was also a Board member for the Software Association of Oregon.

Autoren/Hrsg.

Fred, Phillips

Leseproben

CHAPTER 2

ENTREPRENEURIAL INITIATIVE, ENTREPRENEURIAL BEHAVIOR, AND CORPORATE STRATEGY

LOUISE KELLY

EXPOSITION OF THE CHAPTER’S PRINCIPLES

Corporate strategies are forward looking, involve a significant commitment of resources to be played out over a number of years and, and are based on management assumptions about numerous events that have not yet occurred. Innovation and entrepreneurship are strategic, in that they involve a focus on the future and a commitment of a significant portion of the person’s or a firm’s resources. Breakthrough innovation involves far more risk than the incremental approach yet brings high rewards when successful.

Entrepreneurship is central to renewing and expanding businesses. Intrapreneurship is entrepreneurship within large organizations. For firms to engender innovation, they need to create an environment where there is freedom and support to pursue perceived opportunities and employees are allowed to fail and are given repeated chances to do so until they succeed with innovation. The structure and strategy of some successful companies may actually work against innovation. So, for innovation and entrepreneurship to thrive, in a corporate context, there have to be specific choices made by upper management to make this happen. These choices involve issues of culture, knowledge management, and upper management leadership. Also, in this chapter we consider the personality and contributions of some well-known entrepreneurs in order to gain insight into the entrepreneurial and innovation process.

Finally, it is interesting to note that the center of gravity for corporate innovation has shifted from the developed to the developing world. Previously the source of many of the innovative corporate strategies was considered to be the United States. Now we are witnessing a shift of the center of gravity towards developing countries. This chapter begins with a case of a premier American company’s innovation, Amazon.com’s Kindle ebook reader, and ends with the case of CEMEX, which details one of the most successful transnational strategies emanating from a developing country. There is a parallel shift in the prevalence of entrepreneurial ventures and new start-ups among women and minorities, especially in the United States.

CASE STUDY: AMAZON’S KINDLE

Amazon launched its electronic book reader in Christmas 2007: a physically appealing device that is it is lighter and easier to hold than a book. The large gray, rubberized panel in the back covering a battery and XD card memory slot is engraved with letters and symbols of different alphabets throughout the ages; designed to remind consumers of the tablets that held the first written words and give them the sense that they are part of something historic that will also change the world. Everything on the Kindle is white, seemingly to help the device disappear and allow the reader to become immersed in the words on the screen.

In design choice, one cannot help but notice the similarity to the original white iPod. The iPod is an exemplary story of corporate renewal through entrepreneurial initiative. In fact, we can say the Kindle is essentially an iPod for books, with Amazon’s online bookstore taking on the role of the iTunes. In both the cases, the Kindle and the iPod, it’s important to note that the hardware is integrated and packaged with complementary and enticing software such as the iTunes store and Amazon.com website. The software, even more so than the hardware, is the business model innovation of the devices that allow customers to interact with the entertainment and book content in a new, fun, and community-based ways. The Amazon.com website is a treasure trove of information about new books, with detailed reviews by customers, sample chapters, and extensive publisher-provided information. Amazon has been able to create community through this website, and they clearly hope that the Kindle will tap into a new type of community for the firm.

The Amazon Kindle is designed to appeal to technophiles and bibliophiles and is really aimed at improving the experience of reading a book. So, for example one can make one’s own comments on a book or highlight parts of it. However, it is not that easy to share those notations with other readers. The digital rights management (DRM) that Amazon has chosen as intellectual propert protection, does not allow for information on the Kindle to be stored and transferred to others’ devices. The choices that both Amazon and Apple made to limit access, through DRM, or through the iTunes software, has been criticized because it is considered a strategic move that is not in synch with the open-systems, open-source zeitgeist that is propelling forward many innovations such as Google’s cloudware: application software that is housed on the Internet rather than that on a desktop, thereby threatening Microsoft’s desktop software dominance.

The Kindle does provide a seamless purchasing and electronic reading experience. One can shop for Amazon books, or electronic newspapers, magazines and blogs subscriptions rights on the device which comes with a built-in Sprint EVDO card, so there is no WiFi. Amazon bought EVDO access wholesale from Sprint and is re-marketing it with the Kindle as Whispernet. The high speed wireless data access comes free with the device. The buyer gets to download reading material seamlessly, and this is the part of the Kindle experience that works really well.

Amazon, no doubt, made a big investment upfront to make this alliance strategy work. This EVDO data plan costs $60 a month for a Sprint customer. Although, Amazon was probably able to negotiate a much lower price, even at $10 a month for the Kindle, Amazon would need to sell a dozen books just to recoup its wireless networks. Another way of looking at it, is that the Kindle does not use a lot of bandwidth, because the device is designed more for “download -and – read” experience than the” always –on” mode. So perhaps Amazon was able to negotiate a much lower rate from Sprint, perhaps even as low as a dollar a month. Amazon will not comment on how much it is paying for the wireless network, or even if it’s paying Sprint on a per device basis.

The Kindle has limited web browser capability, allowing customers access to some preselected bookmarks including Amazon.com (so you can buy a digital camera and other things, just using the Kindle shopping page), Wikipedia, Google, BBC News, Yahoo Finance, Weather Underground and Yellow Pages.

Amazon included another experimental feature called “Ask Kindle Now.” You can ask any question you like and get a response from a human researcher. This is done through Amazon’s “Mechanical Turk” service.

The Kindle is definitely a step forward in the e-book reader category, an improvement over Sony’s previous offering. This is clearly a long-term investment for Amazon, in line with Amazon’s original strategy in which Jeff Bezos pursued product diversification over the first six years, foregoing company profitability in favor of continually expanding the product line. As a corporate strategy, the Kindle innovation is a step forward for Amazon; moving away from shipping physical goods to selling digital ones, which is more in keeping with the dynamics of a knowledge-based economy. Obviously the digital download versus shipping costs will have a very positive impact on Amzaon’s margins. So the first Kindle ebook reader is perhaps clunky in some ways, but Amazon’s gamble is not so much about the device as it is about delivering digital books through the ether. Just as we have seen Apple go through many iterations of the iPod, we will no doubt see the Kindle go through many iterations.

Case questions

1. What corporate strategy decisions did Amazon make in launching the Kindle?
2. What was the role of complementary products or services in this innovative product strategy?
3. Compare Amazon’s corporate strategy in launching the Kindle with Apple Computer’s corporate strategy in launching the iPod.
4. Identify some partners that Amazon included in the Kindle launch. How do these partnerships help support the innovation?
5. How is the Kindle a forward-looking strategy for Amazon.com?

Internet Research Questions

1. Do some research on Amazon’s “Mechanical Turk” program as an example of the “power of we: How to unleash the power of crowds in your business” (Libert and Specter 2008). How does this program work? What is the corporate innovation?
2. Compare Amazon’s strategy for their ebook reader with Sony’s strategy for their e-book. Which is more innovative? More likely to succeed?

INNOVATION AND ENTREPRENEURSHIP

A global study by the Boston consulting group in 2005 showed that large global companies worldwide want to increase their spending on innovation. These executives concurred, to a large degree, that generating growth through innovation is essential for success in their respective industries. Furthermore, these executives indicated they were not satisfied with their return on investment to date for innovation. Some of their concerns with innovation are in the area of how to move quickly from idea generation to commercialization and initial sales, how to leverage suppliers for new ideas, and how to properly balanced risk, time frames, and returns.

It is important to distinguish between invention and innovation. Invention is the creation of new products or processes through new knowledge or the integration of existing knowledge in new...

Über Autor(innen)

Fred Phillips is Professor of Entrepreneurship at Maastricht School of Management. He is also Professor of Management at Alliant International University in California, and Affiliate Professor at Pontificia Universidad Catolica de Lima in Peru.He is a Senior Research Fellow at the IC2 Institute, a renowned think-tank and incubator on technology and entrepreneurship at the University of Texas at Austin. He is Series Co-Editor for the MSM Series on Intercultural and Global Management. He is a founder and former member of the Advisory Board of the Austin Technology Council, and was also a Board member for the Software Association of Oregon.