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Copy of Technological Innovation & Strategy

Facilitation 1, Business Innovation, Maastricht University

Amaury de Francquen

on 14 May 2013

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Transcript of Copy of Technological Innovation & Strategy

Technological Innovation & Strategy
Elio Engineering, Inc. Elio Engineering, Inc. How would you describe 'core competence' in your own words? A combination of a firms' collective skills with respect to What are the 3 ways to identify core competencies? Can we say that the innovation of the NC seat is based on core competencies? Let's apply this tree framework to the NC case Core competence: Core competencies

commercializing inventions >how can it be profitable?
3 types: Relation between Technology and Strategy http://www.kickstarter.com New way to fund creative projects
Each project is independently created
Creators keep 100% ownership of their work Competitive
advantage! Technology Portfolio In which quadrant does NC seat belong?
What does this imply for the producing firm? Technology Adoption Life Cycle Technology Life Cycle coupled to strategy Where do NC seats belong? Technology Innovation Invention knowledge, skills, artifacts creation of new intellectual property for the first time Incremental
Architectural Amount sought: $900,000.
Amount raised: $2,933,252 Amount sought: $100,000.
Amount raised: $1,192,793 Amount sought: $100,000.
Amount raised: $10,266,846 Amanda Palmer &
The Grand Theft Orchestra album Pebble e-paper watch Wasteland 2 1996: Paul Elio designed his revolutionary seat
1998: Foundation by Paul Elio and Hari Sankara
1998: Meeting with Bostrom Seating (heavy trucks and bus seats maker)
1999: Bostrom made a licensing deal with Elio the belt is attached to the car frame and can break after heavy impact. is also using cheaper and lighter materials which are easier to manufacture has a higher comfort level than Conventional Car seat customers Nature of Technology Product/Process
Tacit/Codified Dominant Design Paradigm Car buyers
OEM (Original Equipment Manufacturers)
Tier-one suppliers Car seat competitors General purpose asset which do
not need to be tailored to the
innovation in question Complementary
Asset Generic Assets Co-specialized Assets Specialized Assets Assets where there is unilateral dependence
between the innovation and the complementary asset Assets for which there is
a bilateral dependence Oligopoly:
Johnson Controls Inc.
Lear Corporation
Magna Barriers to Entry (BTE) Appropriability
Regimes Tight Weak Technology is easy to protect Technology is hard to protect Development phase(Tier-three)

Manufacturing phase(Tier-one) New entrant can:
start as tier-three
try to partner with a tier-one or OEM through Joint-Venture or Licensing Problem Statement: What will be the best way to put Elio Engineering's NC seat into the market? Bet Draw Fold Cash in Technology importance Relative Competitive position High Low High Low Advantages:
Greater control over core technology
Possibility to supply to all tier-one suppliers Disadvantages:
Lack of manufacturing expertise
Receive only a small part of final product's total value-added Advantages:
Availability of resources
Reduces technology- and market-risk Disadvantages:
Limits the size of total market
Less control over core technology
Potentially lower profit margin knowledge,
production, and
learning abilities with the main aim of getting a stronger position than the competition NC
(No Compromise) Conventional seat lighter, cheaper, stronger ABTS is only installed in luxury cars(1996) change of innovation focus
awareness that not all technologies can be manufactured in-house
growing importance of independent suppliers Contemporary issues in car market Taking a look at GM Decision Option 1:
Start-up company Option 3: Licensing with
Tier-one or OEM ABTS
(All-Belts-to-Seat) 1. provide access to a wide variety of markets 2. are difficult to imitate for competitors 3. contribute significantly to the perceived customer benefits of the end product Integration Modes (Innovator's side) Integration Modes (Incumbent's side) Advantages:
Availability of resources
Reduces technology- and market-risk Disadvantages:
Limits the size of total market
Less control over core technology
Potentially lower profit margin Option 2: Joint-Venture with
Tier-one or OEM Our consulting advices Further Insight The innovative product Agenda 1. Introduction
2. Case: Elio Engineering, Inc.
- Company
- Product
- Market
3. Consultancy advices
4. Further Insight Differentiation Cost Leadership Improve service performance Reduce product cost
Economies of scale Increase product quality The Market Thank you for your attention! assets, infrastructure or capabilities needed to support
the successful commercialization and marketing of a technological innovation. Elio's Seat is what kind of complementary asset for Bostrom? U.S. 1998 Light Vehicle Market Share
Total U.S. Sales: 15 million units U.S. Seat Systems: 1997 Market Share
Total Revenues: $8.2 Billion Further study The next meeting:
Patterns in Industrial Innovation
How to beat the most powerful Competitors
Disruption, Disintegration, and Dissipation of Differentiability What differences can you discover with 1996? Low BTE High BTE References Product
Differentiation Cost Reduction Break!
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