ppt santos and doz

8/3/2019 PPT Santos and Doz

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Is Your

InnovationProcessGlobal?Jose Santos

Yves DozPeter Williamson

Present by:

Jen Spernak & Sean Meadows


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Authors Jose Santos

Management of the multinationalenterprise, management of globalintegration and global innovation

Yves Doz Strategy and organization of

multinational companies

Peter Williamson

Business strategy, mergers and

acquisitions, and international expansionto numerous companies, governmentsand international organizationsthroughout the Asia-Pacific, Europe, andNorth America


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Overview Are innovation processes global? Manufacturing is globalCost

Support Services are global

Cost

Is cost reduction the only reason to goglobal? New competitive advantage; metanational

innovation

Implementation of a process for innovating thattranscends local clusters and nationalboundaries


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Theory

Utilizing localized pockets of technology,market intelligence, & capabilities yields

more, higher-value innovation at a lowercost


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Theory Applied:Communication

MOTOROLA NOKIA

Pioneer Newcomer

US Centric Global

Insular Innovation Process Metanational Innovation Process

Market loss: UnfashionablePhones

Market gain: Phones asAccessory

Failed Market Research New Markets

One Size Fit All Product Customized Products

WINNER


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Theory Applied: AcrossIndustries

INDUSTRY COMPANY A COMPANY B

Transportation Boeing Airbus

Software CAI SAP

Food Starbucks McDonalds

Metanational Innovation:

Allowed firms to develop valuable business models, strategies,and capabilities that rivals could not emulate Decisive Source of Competitive Advantage


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Power of Diversity Accessing sufficient diversity of knowledge is

key challenge

Best Combinations of technical know how andmarket expertise

Go global; local sources are not enough

Rules of the game have changed

Me too Products are a result of fishing in the

same knowledge pond; Undesirable Complete solutions is the goal; not stand alone

product/services


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Geographic Knowledge

The link between geography and knowledgediversity is important but not always evident Finland - Radio Telephony Germany - Strong Green Expertise

Japan - Experts in JIT inventory

Globalization of the innovation process is not onlydesirable but essential Computer Industry shift from Boston to Silicon Valley

Dispersion of knowledge base is the logical resultof globalization of the supply chain Outsourcing of manufacturing creates new sources

of knowledge


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Reducing Costs Globalization of supply chains typically result in reducingoverall operational costs by accessing new raw materialsources, components or services from around the world. Same benefit evident through metanational innovation

process, but only a secondary benefit

Even if the home knowledge base is similar to overseas, it stillmay be less expensive to utilize the distant knowledge base.

Often the firm cant relocate the entire innovation processto realize the benefit of lower costs

Instead often move the lower cost knowledge andintegrate into complimentary knowledge elsewhere Through use of improved internet capabilities Relocating key personnel from the home innovation process


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Prospect, Assess, Mobilize To realize the benefits of metanational

innovation, a firm must do these three things

Prospect: Find relevant pockets of knowledgefrom around the world

Assess: Decide on the optimal footprint for aparticular innovation

Mobilize: Use cost-effective mechanisms tomove distant knowledge without degrading it


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Finding valuable new pockets of innovations is likeprospecting for gold!

Need to know what to look for, where to look for it and howto tap into it as a resource

Shiseido Co Ltd. Plans to enter the fragrance market Where: Paris, France & Gien, France How: Immerse the company into the French environment and

learn by doing The knowledge of what will gradually be learned through the

identification of the where and how.

Shiseido prospected for new knowledge in a very systematicand focused way leading to new innovations to theirproduct development and design.

Prospecting


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Company must determine an optimal footprintfor their innovation processes to limit costsincurred when incorporating new knowledgeinto that process.

Like optimizing a global supply chain Adding a new source may reduce costs or improve

the quality of required components to the process

A greater number of locations may lead toadditional complexity and costs

How to overcome the contrasting relationship?

Assessing


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6 Step Approach1. Determine which locations might be absolutely

necessary to obtain the knowledge required

2. The more radical the desired innovation thelarger the necessary footprint is likely to be

3. A companys overall strategy will be affected bythe size of its footprint

4. History is important

5. Using the knowledge accumulated within an

existing operation is usually easier than adding anew site

6. The right footprint may evolve as the innovationprocess unfolds

Assessing


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Real benefits of global innovation occur when bits of knowledge from differentsources interact over time in a virtual melting pot from which new products ortechnologies can emerge

Mobilizing

To succeed metanational

innovation needs a mix ofmobilization strategies

Must distinguish between

the type (simple vs.

complex) and the nature

(technical vs. market) of

the information involved


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Lesson Learned Valuable

innovation is not

local Supply Chain,

Service, &Innovation allbenefit from

globalization Diversity leads to

higher valueinnovation at alower cost


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Implications for Managers Increased

innovation at a

lower cost cana be acompetitiveadvantage

View diversityas anopportunity,not a problem

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