Transparency 13-1 Corporate Entrepreneurship Firm’s capabilities possessed to develop new goods or services and manage the innovation process Invention Creating or developing a new product or process idea Innovation Creating a commercializable product from invention Imitation Adoption of innovation by a population of similar firms Defining Entrepreneurship

Transparency 13-2 Successful Entrepreneurship The key to success with entrepreneurship and innovation is moving from the invention of ideas to effective commercialization and acceptance in the marketplace

Transparency 13-3 Innovation and Competitive Advantage Competitive Advantage Characteristics of Innovations which lead to...

Transparency 13-4 CommerciallyExploitable with Present Capabilities CommerciallyExploitable Innovation and Competitive Advantage Competitive Advantage Difficult for Competitors to Imitate Difficult for Competitors to Imitate TimelyTimely Provides Significant Value to Customers

Transparency 13-5 Appropriating Value from Innovation Value Appropriation from Innovation The goal or end point is developing a system which allows the firm to extract value effectively from their internal innovative capabilities

Transparency 13-6 Appropriating Value from Innovation Value Appropriation from Innovation Cross- Functional Integration/ Design Teams Cross- Functional Integration/ Design Teams Cross-functional design teams can help to break down barriers to entrepreneurship within firms

Transparency 13-7 Value Appropriation from Innovation These factors tend to reduce the effectiveness of Cross-functional integration or design teams Cross- Functional Integration/ Design Teams Cross- Functional Integration/ Design Teams Barriers to Integration Different Time Orientation Interpersonal Orientation Different Goal Orientation Formality of Structure Appropriating Value from Innovation

Transparency 13-8 Value Appropriation from Innovation These factors tend to increase the effective- ness of Cross-functional integration or design teams Cross- Functional Integration/ Design Teams Cross- Functional Integration/ Design Teams Barriers to Integration Different Time Interpersonal Different Goal Formality of Orientation Structure Facilitators of Integration Shared Values Leaders’ Vision Budget allocation Effective Communication Appropriating Value from Innovation

Transparency 13-9 Value Appropriation from Innovation Cross- Functional Integration/ Design Teams Cross- Functional Integration/ Design Teams Barriers to Integration Different Time Interpersonal Different Goal Formality of Orientation Structure Facilitators of Integration Shared Values Leaders’ Vision Effective Budget Allocation Communication Time to Market Product Quality Creation of Customer Value Appropriating Value from Innovation

Transparency Value Appropriation from Innovation Cross- Functional Integration/ Design Teams Barriers to Integration Different Time Interpersonal Different Goal Formality of Orientation Orientation Orientation Structure Facilitators of Integration Shared Values Leaders’ Vision Effective Budget Allocation Communication Time to Market Product Quality Appropriating Value from Innovation Creation of Customer Value

Transparency Strategic Alliances Alliances can help to foster innovation by combining the knowledge and resources of two or more partners Firms must focus on building knowledge, identifying core competencies and developing strong human resources to manage these projects Firms can also give away their core competencies by outsourcing to alliance partners rather than developing their own capabilities over time Cooperating to Produce Innovation

Transparency Many firms now use acquisitions of other firms as a substitute for developing innovations internally This can reduce risk and lower costly R&D investments The drawback is that firms can eventually lose their ability to generate innovations internally Many firms now use acquisitions of other firms as a substitute for developing innovations internally Acquiring Innovative Capability

Transparency While large firms account for over 80% of the world’s R&D spending, individuals or small firms are granted more than half of U.S. patents Many small firms are created when employees leave large firms to start their own businesses, frequently continuing to interact with their former firms to develop innovations and new products Small firms have created most of the new jobs in the U.S. in the 1990s Small Firms and Innovation