Ten Different Types of Innovation (cont.) 2

A. Configuration (focus on the innermost workings of an enterprise and its business systems -  2nd of 4 types)

2. Network (allows the firm to take advantage of other companies' processors, technologies, offerings, channels, brands, etc. This allows a firm to capitalise on its strengths while harnessing the capabilities and assets of others; includes sharing the risk in developing new products and services, etc.)

The network strategy involves these tactics:

- open innovation like crowd sourcing (obtain access to processes, or patents from other companies to leverage, extend and build on expertise, and/or do the same with internal IP & processes)

- creating secondary markets to connect with alternate customers (connect waste streams, by-products, or other alternative offerings with those who want them)

- alliances (share risk and revenue to jointly improve individual competitive advantage)

- collaboration (partnering with others for mutual benefit)

- complimentary partnering (leveraging assets by sharing with other organisations that serve similar markets and offer different products & services)

- consolidation (acquire other companies in the same market or complementary markets)

- coopetition (join forces with someone who would normally be your competitor to achieve a common goal)

- franchising (license business principles, processes, IP capabilities, content, brand, etc to paying partners)

- merger/acquisition (combine two or more identities to gain access to capabilities and assets)

- supply chain integration (co-ordinate and integrate information and/or processes across the company or different parts the value chain), etc

NB The above tactics can be used individually or in combination

Indicators of success are when the organisation

- is working with collaborators to drive a change from business as usual

- other players are allowed to use the firm's channels, processes, brand, or other unique assets

- in forming partnerships with unrelated parties

- is in collaboration with suppliers and/or customers in the market

Some examples include

- Target

("...combine the best of the fashion world with the best of the discount world, quality store with quality merchandise at discount prices..."

Douglas Dayton as quoted by Larry Keeley et al, 2013

They have worked with many products, and world-renowned fashion designers to create exclusive products for Target).

- GlaxoSmithKline (used co-innovation, ie allowed researchers, from outside the firm, to participate in R&D challenges)

- Natura (has developed a sophisticated network of relationships with around 25 universities worldwide.

"...By 2008, 50% of the company's product pipeline had come from its open innovation program..."

Larry Keeley et al, 2013)


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