WAAD_MGT325_2

Description

Learning Outcomes:

 Explain of the concepts, models for formulating strategies, defining the organizational strategic directions and crafting a deployment strategy..

Case Study : Tesla, Inc. in 2018

Please read the case study “Tesla, Inc. in 2018” on page 115 of your textbook “Strategic Management of Technological Innovation” and answer the following discussion questions. This assignment is worth 10 marks, with each question assigned specific marks as indicated.

Question 1 (2 marks):

 What were Elon Musk’s and Martin Eberhard’s goals in founding Tesla?

Analyze and compare their motivations and vision for the company.

Question 2 (2 marks):

 How would you characterize competition in the auto industry in 2018?

Discuss the key factors that defined the competitive landscape for Tesla during that time.

Question 3 (2 marks):

 What do you think are Tesla’s core competencies? Identify the strengths that contributed to its success.

 Does Tesla have any sources of sustainable competitive advantage?

Explain whether these advantages are likely to endure.

Question 4 (2 marks):

 Evaluate Tesla’s strategic moves into:

a) Mass-market cars,

b) Batteries (car batteries and Powerwall),

c) Solar panels.

Discuss the motivations behind these moves and the opportunities and challenges Tesla faced in competing in these businesses.

Question 5 (1 mark):

 Do you think Tesla will be profitable in all of these businesses?

Provide a rationale for your assessment, considering the unique aspects of each business.

Question 6 (1 mark):

 What do you think Tesla’s, or more specifically, Elon Musk’s strategic intent is?

Describe the overarching vision and objectives that appear to guide Tesla’s direction in 2018.

Directions:

 All students are encouraged to use their own words.

 Write a three-part essay (i.e., an essay that includes an introduction paragraph, the essay’s body, and a conclusion paragraph).

 Use Saudi Electronic University academic writing standards and APA style guidelines.

 Use proper referencing (APA style) to reference, other styles will not be accepted.

 Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles unless the assignment calls for more.

 It is strongly encouraged that you submit all assignments into the safe assignment Originality Check prior to submitting it to your instructor for grading and review the grading rubric to understand how you will be graded for this assignment.

Unformatted Attachment Preview

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Management of Technology (MGT 325)
Due Date: 11/11/2023 @ 23:59
Course Name: Management of Technology
Student’s Name:
Course Code: MGT 325
Student’s ID Number:
Semester: First
CRN: 14029
Academic Year:2023-24-1st Semester
For Instructor’s Use only
Instructor’s Name: Dr. Swapnali Baruah
Students’ Grade:
Marks Obtained: /Out of 10
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only)
via allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks
may be reduced for poor presentation. This includes filling your information
on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from
students or other resources without proper referencing will result in ZERO
marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, doublespaced) font. No pictures containing text will be accepted and will be
considered plagiarism).
• Submissions without this cover page will NOT be accepted.
Learning Outcomes:
➢ Explain of the concepts, models for formulating strategies, defining the
organizational strategic directions and crafting a deployment strategy..
Case Study : Tesla, Inc. in 2018
Please read the case study “Tesla, Inc. in 2018” on page 115 of your
textbook “Strategic Management of Technological Innovation” and answer
the following discussion questions. This assignment is worth 10 marks, with
each question assigned specific marks as indicated.
Question 1 (2 marks):
✓ What were Elon Musk’s and Martin Eberhard’s goals in founding
Tesla?
Analyze and compare their motivations and vision for the company.
Question 2 (2 marks):
✓ How would you characterize competition in the auto industry in
2018?
Discuss the key factors that defined the competitive landscape for
Tesla during that time.
Question 3 (2 marks):
✓ What do you think are Tesla’s core competencies? Identify the
strengths that contributed to its success.
✓ Does Tesla have any sources of sustainable competitive
advantage?
Explain whether these advantages are likely to endure.
Question 4 (2 marks):
✓ Evaluate Tesla’s strategic moves into:
a) Mass-market cars,
b) Batteries (car batteries and Powerwall),
c) Solar panels.
Discuss the motivations behind these moves and the opportunities and
challenges Tesla faced in competing in these businesses.
Question 5 (1 mark):
✓ Do you think Tesla will be profitable in all of these businesses?
Provide a rationale for your assessment, considering the unique
aspects of each business.
Question 6 (1 mark):
✓ What do you think Tesla’s, or more specifically, Elon Musk’s
strategic intent is?
Describe the overarching vision and objectives that appear to guide
Tesla’s direction in 2018.
Directions:
✓ All students are encouraged to use their own words.
✓ Write a three-part essay (i.e., an essay that includes an introduction
paragraph, the essay’s body, and a conclusion paragraph).
✓ Use Saudi Electronic University academic writing standards and APA style
guidelines.
✓ Use proper referencing (APA style) to reference, other styles will not be
accepted.
✓ Support your submission with course material concepts, principles, and
theories from the textbook and at least two scholarly, peer-reviewed journal
articles unless the assignment calls for more.
✓ It is strongly encouraged that you submit all assignments into the safe
assignment Originality Check prior to submitting it to your instructor for
grading and review the grading rubric to understand how you will be
graded for this assignment.
Strategic
Management of
Technological
Innovation
Strategic
Management of
Technological
Innovation
Sixth Edition
Melissa A. Schilling
New York University
First Pages
STRATEGIC MANAGEMENT OF TECHNOLOGICAL INNOVATION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2020 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent
of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission,
or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 LCR 21 20 19
ISBN 978-1-260-56579-9
MHID 1-260-56579-3
Cover Image: ©Shutterstock/iSam iSmile
All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not
indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the
accuracy of the information presented at these sites.
mheducation.com/highered
sch65793_fm_ise.indd iv
12/04/18 11:25 AM
About the Author
Melissa A. Schilling, Ph.D.
Melissa Schilling is the John Herzog family professor of management and organizations at New York University’s Stern School of Business. Professor Schilling teaches
courses in strategic management, corporate strategy and technology, and innovation management. Before joining NYU, she was an Assistant Professor at ­Boston
­University (1997–2001), and has also served as a Visiting Professor at INSEAD
and the Bren School of Environmental Science & Management at the University of
California at Santa Barbara. She has also taught strategy and innovation courses at
Siemens ­Corporation, IBM, the Kauffman Foundation Entrepreneurship Fellows
­program, Sogang University in Korea, and the Alta Scuola Polytecnica, a joint institution of Politecnico di Milano and Politecnico di Torino.
Professor Schilling’s research focuses on technological innovation and knowledge creation. She has studied how technology shocks influence collaboration activity and innovation outcomes, how firms fight technology standards battles, and how
firms utilize collaboration, protection, and timing of entry strategies. She also studies how product designs and organizational structures migrate toward or away from
modularity. Her most recent work focuses on knowledge creation, including how
breadth of knowledge and search influences insight and learning, and how the structure of knowledge networks influences their overall capacity for knowledge creation.
Her research in innovation and strategy has appeared in the leading academic journals
such as ­Academy of Management Journal, Academy of Management Review, Management Science, Organization Science, Strategic Management Journal, and Journal
of ­Economics and Management Strategy and Research Policy. She also sits on the editorial review boards of Academy of Management Journal, Academy of Management
Discoveries, Organization Science, Strategy Science, and Strategic Organization.
She is the author of Quirky: The Remarkable Story of the Traits, Foibles, and Genius
of Breakthrough Innovators Who Changed the World, and she is coauthor of Strategic
Management: An Integrated Approach. Professor Schilling won an NSF CAREER
award in 2003, and Boston University’s Broderick Prize for research in 2000.
v
Preface
Innovation is a beautiful thing. It is a force with both aesthetic and pragmatic appeal:
It unleashes our creative spirit, opening our minds to hitherto undreamed of possibilities, while accelerating economic growth and providing advances in such crucial human
endeavors as medicine, agriculture, and education. For industrial organizations, the primary engines of innovation in the Western world, innovation provides both exceptional
opportunities and steep challenges. While innovation is a powerful means of competitive
differentiation, enabling firms to penetrate new markets and achieve higher margins, it is
also a competitive race that must be run with speed, skill, and precision. It is not enough
for a firm to be innovative—to be successful it must innovate better than its competitors.
As scholars and managers have raced to better understand innovation, a wide range
of work on the topic has emerged and flourished in disciplines such as strategic management, organization theory, economics, marketing, engineering, and sociology.
This work has generated many insights about how innovation affects the competitive
dynamics of markets, how firms can strategically manage innovation, and how firms
can implement their innovation strategies to maximize their likelihood of success. A
great benefit of the dispersion of this literature across such diverse domains of study
is that many innovation topics have been examined from different angles. However,
this diversity also can pose integration challenges to both instructors and students.
This book seeks to integrate this wide body of work into a single coherent strategic
framework, attempting to provide coverage that is rigorous, inclusive, and accessible.
Organization of the Book
The subject of innovation management is approached here as a strategic process. The
outline of the book is designed to mirror the strategic management process used in
most strategy textbooks, progressing from assessing the competitive dynamics of the
situation, to strategy formulation, and then to strategy implementation. The first part
of the book covers the foundations and implications of the dynamics of innovation,
helping managers and future managers better interpret their technological environments and identify meaningful trends. The second part of the book begins the process of crafting the firm’s strategic direction and formulating its innovation strategy,
including project selection, collaboration strategies, and strategies for protecting the
firm’s property rights. The third part of the book covers the process of implementing
innovation, including the implications of organization structure on innovation, the
management of new product development processes, the construction and management of new product development teams, and crafting the firm’s deployment strategy. While the book emphasizes practical applications and examples, it also provides
systematic coverage of the existing research and footnotes to guide further reading.
Complete Coverage for Both Business
and Engineering Students
vi
This book is designed to be a primary text for courses in the strategic management of
innovation and new product development. Such courses are frequently taught in both
Preface vii
business and engineering programs; thus, this book has been written with the needs
of business and engineering students in mind. For example, Chapter Six (Defining the
Organization’s Strategic Direction) provides basic strategic analysis tools with which
business students may already be familiar, but which may be unfamiliar to engineering students. Similarly, some of the material in Chapter Eleven (Managing the New
Product Development Process) on computer-aided design or quality function deployment may be review material for information system students or engineering students,
while being new to management students. Though the chapters are designed to have
an intuitive order to them, they are also designed to be self-standing so instructors can
pick and choose from them “buffet style” if they prefer.
New for the Sixth Edition
This sixth edition of the text has been comprehensively revised to ensure that the
frameworks and tools are rigorous and comprehensive, the examples are fresh and
exciting, and the figures and cases represent the most current information available.
Some changes of particular note include:
Six New Short Cases
The Rise of “Clean Meat”. The new opening case for Chapter Two is about the
development of “clean meat”—meat grown from animal cells without the animal
itself. Traditional meat production methods are extremely resource intensive and
produce large amounts of greenhouse gases. Further, the growing demand for meat
indicated an impending “meat crisis” whereby not enough meat could be produced
to meet demand. “Clean meat” promised to enable meat production using a tiny
fraction of the energy, water, and land used for traditional meat production. Its
production would create negligible greenhouse gases, and the meat itself would
have no antibiotics or steroids, alleviating some of the health concerns of traditional meat consumption. Furthermore, it would dramatically reduce animal suffering. If successful, it would be one of the largest breakthroughs ever achieved in
food production.
Innovating in India: The Chotukool Project. Chapter Three opens with a case about
the Chotukool, a small, inexpensive, and portable refrigerator developed in India. In
rural India, as many as 90 percent of families could not afford household appliances,
did not have reliable access to electricity, and had no means of refrigeration. Godrej
and Boyce believed that finding a way to provide refrigeration to this segment of the
population offered the promise of both a huge market and making a meaningful difference in people’s quality of life.
UberAIR. Chapter Five now opens with a case about UberAIR, Uber’s new service
to provide air transport on demand. Uber had already become synonymous with
­on-demand car transport in most of the Western world; it now believed it could
develop the same service for air transport using electric vertical take-off and landing
aircraft (eVTOLs). There were a lot of pieces to this puzzle, however. In addition to
the technology of the aircraft, the service would require an extensive network of landing pads, specially trained pilots (at least until autonomous eVTOLs became practical), and dramatically new air traffic control regulations and infrastructure. Was the
time ripe for on-demand air transport, or was UberAIR ahead of its time?
viii Preface
Tesla Inc. in 2018. Chapter Six opens with a new case on Tesla, no longer just an
electric vehicle company. This case reviews the rise of Tesla, and then explores the
new businesses Tesla has entered, including solar panel leasing and installation (Solar
City), solar roof production, and energy storage systems (e.g., Powerwall). Why did
the company move into these businesses, and would synergies betweeen them help to
make the company more successful?
Where Should We Focus Our Innovation Efforts? An Exercise. Chapter Seven now
opens with an exercise that shows how firms can tease apart the dimensions of value
driving technological progress in an industry, map the marginal returns to further
investment on each dimension, and prioritize their innovation efforts. Using numerous
examples, the exercise helps managers realize where the breakthrough opportunities
of the future are likely to be, and where the firm may be currently overspending.
Scrums, Sprints, and Burnouts: Agile Development at Cisco Systems. Chapter Eleven
opens with a case about Cisco’s adoption of the agile development method now commonly used in software development. The case explains what agile development is,
how it differs from other development methods (such as stage-gated methods), and
when (and why) a firm would choose agile development versus gated development for
a particular innovation.
Cases, Data, and Examples from around the World
Careful attention has been paid to ensure that the text is global in its scope. The
opening cases and examples feature companies from China, India, Israel, Japan, The
­Netherlands, Kenya, the United States, and more. Wherever possible, statistics used in
the text are based on worldwide data.
More Comprehensive Coverage and Focus on Current Innovation Trends
In response to reviewer suggestions, the new edition now provides an extensive
discussion of modularity and platform competition, crowdsourcing and customer
­co-creation, agile development strategies, and more. The suggested readings for each
chapter have also been updated to identify some of the more recent publications that
have gained widespread attention in the topic area of each chapter. Despite these additions, great effort has also been put into ensuring the book remains concise—a feature
that has proven popular with both instructors and students.
Supplements
The teaching package for Strategic Management of Technological Innovation is available online from Connect at connect.mheducation.com and includes:
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text. The slides can also be modified by the instructor to customize them to the
instructor’s needs.
∙ A testbank with true/false, multiple choice, and short answer/short essay questions.
∙ A suggested list of cases to pair with chapters from the text.
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Acknowledgments
This book arose out of my research and teaching on technological innovation and
new product development over the last decade; however, it has been anything but a
lone endeavor. I owe much of the original inspiration of the book to Charles Hill, who
helped to ignite my initial interest in innovation, guided me in my research agenda,
and ultimately encouraged me to write this book. I am also very grateful to colleagues
and friends such as Rajshree Agarwal, Juan Alcacer, Rick Alden, William Baumol,
Bruno Braga, Gino Cattanni, Tom Davis, Sinziana Dorobantu, Gary Dushnitsky,
Douglas Fulop, Raghu Garud, Deepak Hegde, Hla Lifshitz, Tammy Madsen, Rodolfo
Martinez, Goncalo Pacheco D’Almeida, Joost Rietveld, Paul Shapiro, Jaspal Singh,
Deepak Somaya, Bill Starbuck, Christopher Tucci, and Andy Zynga for their suggestions, insights, and encouragement. I am grateful to director Mike Ablassmeir and
marketing manager Lisa Granger. I am also thankful to my editors, Laura Hurst Spell
and Diana Murphy, who have been so supportive and made this book possible, and to
the many reviewers whose suggestions have dramatically improved the book:
Joan Adams
Baruch Business School
(City University of New York)
Shahzad Ansari
Erasmus University
Deborah Dougherty
Rutgers University
Cathy A. Enz
Cornell University
Rajaram B. Baliga
Wake Forest University
Robert Finklestein
University of Maryland–University
College
Sandy Becker
Rutgers Business School
Sandra Finklestein
Clarkson University School of Business
David Berkowitz
University of Alabama in Huntsville
Jeffrey L. Furman
Boston University
John Bers
Vanderbilt University
Cheryl Gaimon
Georgia Institute of Technology
Paul Bierly
James Madison University
Elie Geisler
Illinois Institute of Technology
Paul Cheney
University of Central Florida
Sanjay Goel
University of Minnesota in Duluth
Pete Dailey
Marshall University
Andrew Hargadon
University of California, Davis
Robert DeFillippi
Suffolk University
Steven Harper
James Madison University
xi
xii Acknowledgments
Donald E. Hatfield
Virginia Polytechnic Institute and State
University
Glenn Hoetker
University of Illinois
Sanjay Jain
University of Wisconsin–Madison
Theodore Khoury
Oregon State University
Rajiv Kohli
College of William and Mary
Aija Leiponen
Cornell University
Vince Lutheran
University of North
Carolina—Wilmington
Steve Markham
North Carolina State University
Steven C. Michael
University of Illinois
Michael Mino
Clemson University
Robert Nash
Vanderbilt University
Anthony Paoni
Northwestern University
Johannes M. Pennings
University of Pennsylvania
Raja Roy
Tulane University
Mukesh Srivastava
University of Mary Washington
Linda F. Tegarden
Virginia Tech
Oya Tukel
Cleveland State University
Anthony Warren
The Pennsylvania State University
I am also very grateful to the many students of the Technological Innovation and
New Product Development courses I have taught at New York University, INSEAD,
Boston University, and University of California at Santa Barbara. Not only did these
students read, challenge, and help improve many earlier drafts of the work, but they
also contributed numerous examples that have made the text far richer than it would
have otherwise been. I thank them wholeheartedly for their patience and generosity.
Melissa A. Schilling
Brief Contents
Preface   vi
1
Introduction   1
PART ONE
Industry Dynamics of Technological Innovation   13
2
Sources of Innovation   15
3
Types and Patterns of Innovation   43
4
Standards Battles, Modularity, and Platform Competition   67
5
Timing of Entry   95
PART TWO
Formulating Technological Innovation Strategy   113
6
Defining the Organization’s Strategic Direction   115
7
Choosing Innovation Projects   141
8
Collaboration Strategies   167
9
Protecting Innovation   197
PART THREE
Implementing Technological Innovation Strategy   223
10
Organizing for Innovation   225
11
Managing the New Product Development Process   249
12
Managing New Product Development Teams   277
13
Crafting a Deployment Strategy   297
INDEX   327
xiii
Contents
Chapter 1
Introduction   1
The Importance of Technological
Innovation   1
The Impact of Technological Innovation
on Society   2
Innovation by Industry: The Importance of
Strategy   4
The Innovation Funnel   4
The Strategic Management of Technological
Innovation   6
Summary of Chapter   9
Discussion Questions   10
Suggested Further Reading   10
Endnotes   10
PART ONE
INDUSTRY DYNAMICS
OF TECHNOLOGICAL
INNOVATION   13
Chapter 2
Sources of Innovation   15
The Rise of “Clean Meat”   15
Overview   19
Creativity   20
Individual Creativity   20
Organizational Creativity   22
Translating Creativity Into Innovation   24
The Inventor   24
Innovation by Users   26
Research and Development by Firms   27
Firm Linkages with Customers, Suppliers,
Competitors, and Complementors   28
xiv
Universities and Government-Funded
Research   30
Private Nonprofit Organizations   32
Innovation in Collaborative Networks   32
Technology Clusters   33
Technological Spillovers   36
Summary of Chapter   37
Discussion Questions   38
Suggested Further Reading   38
Endnotes   39
Chapter 3
Types and Patterns of Innovation   43
Innovating in India: The Chotukool Project   43
Overview   46
Types of Innovation   46
Product Innovation versus Process
Innovation   46
Radical Innovation versus Incremental
Innovation   47
Competence-Enhancing Innovation versus
Competence-Destroying Innovation   48
Architectural Innovation versus Component
Innovation   49
Using the Dimensions   50
Technology S-Curves   50
S-Curves in Technological Improvement   50
S-Curves in Technology Diffusion   53
S-Curves as a Prescriptive Tool   54
Limitations of S-Curve Model as a Prescriptive
Tool   55
Technology Cycles   56
Summary of Chapter   62
Discussion Questions   63
Suggested Further Reading   63
Endnotes   64
Contents xv
Chapter 4
Standards Battles, Modularity,
and Platform Competition   67
A Battle for Dominance in Mobile
Payments   67
Overview   71
Why Dominant Designs Are Selected   71
Learning Effects   72
Network Externalities   73
Government Regulation   76
The Result: Winner-Take-All Markets   76
Multiple Dimensions of Value   77
A Technology’s Stand-Alone Value   78
Network Externality Value   78
Competing for Design Dominance
in Markets with Network Externalities   83
Modularity and Platform Competition   87
Modularity   87
Platform Ecosystems   89
Summary of Chapter   91
Discussion Questions   92
Suggested Further Reading   92
Endnotes   93
Chapter 5
Timing of Entry   95
UberAIR   95
Overview   98
First-Mover Advantages   98
Brand Loyalty and Technological
Leadership   98
Preemption of Scarce Assets   99
Exploiting Buyer Switching Costs   99
Reaping Increasing Returns Advantages   100
First-Mover Disadvantages   100
Research and Development Expenses   101
Undeveloped Supply and Distribution
Channels   101
Immature Enabling Technologies and
Complements   101
Uncertainty of Customer Requirements   102
Factors Influencing Optimal Timing of
Entry   104
Strategies to Improve Timing Options   108
Summary of Chapter   108
Discussion Questions   109
Suggested Further Reading   109
Endnotes   110
PART TWO
FORMULATING TECHNOLOGICAL
INNOVATION STRATEGY   113
Chapter 6
Defining the Organization’s Strategic
Direction   115
Tesla, Inc. in 2018   115
Overview   123
Assessing the Firm’s Current
Position   123
External Analysis   123
Internal Analysis   127
Identifying Core Competencies and Dynamic
Capabilities   131
Core Competencies   131
The Risk of Core Rigidities   132
Dynamic Capabilities   133
Strategic Intent   133
Summary of Chapter   137
Discussion Questions   138
Suggested Further Reading   139
Endnotes   139
Chapter 7
Choosing Innovation Projects   141
Where Should We Focus Our Innovation
Efforts? An Exercise   141
Overview   146
The Development Budget   146
Quantitative Methods For Choosing
Projects   149
Discounted Cash Flow Methods   149
Real Options   152
Disadvantages of Quantitative
Methods   154
xvi Contents
Qualitative Methods for Choosing
Projects   154
Screening Questions   155
The Aggregate Project Planning Framework   157
Q-Sort   159
Combining Quantitative and Qualitative
Information   159
Conjoint Analysis   159
Data Envelopment Analysis   161
Summary of Chapter   163
Discussion Questions   163
Suggested Further Reading   164
Endnotes   164
Chapter 8
Collaboration Strategies   167
Ending HIV? Sangamo Therapeutics and Gene
Editing   167
Overview   175
Reasons for Going Solo   175
1. Availability of Capabilities   176
2. Protecting Proprietary Technologies   176
3. Controlling Technology Development
and Use   176
4. Building and Renewing Capabilities   177
Advantages of Collaborating   177
1. Acquiring Capabilities and Resources
Quickly   177
2. Increasing Flexibility   178
3. Learning from Partners   178
4. Resource and Risk Pooling   178
5. Building a Coalition around a Shared
Standard   178
Types of Collaborative Arrangements   178
Strategic Alliances   179
Joint Ventures   181
Licensing   182
Outsourcing   183
Collective Research Organizations   184
Choosing a Mode of Collaboration   184
Choosing and Monitoring Partners   187
Partner Selection   187
Partner Monitoring and Governance   191
Summary of Chapter   192
Discussion Questions   193
Suggested Further Reading   193
Endnotes   194
Chapter 9
Protecting Innovation   197
The Digital Music Distribution
Revolution   197
Overview   201
Appropriability   202
Patents, Trademarks, and Copyrights   202
Patents   203
Trademarks and Service Marks   207
Copyright   208
Trade Secrets   210
The Effectiveness and Use of Protection
Mechanisms   211
Wholly Proprietary Systems versus Wholly Open
Systems   212
Advantages of Protection   213
Advantages of Diffusion   215
Summary of Chapter   218
Discussion Questions   219
Suggested Further Reading   219
Endnotes   220
PART THREE
IMPLEMENTING TECHNOLOGICAL
INNOVATION STRATEGY   223
Chapter 10
Organizing for Innovation   225
Organizing for Innovation at Google   225
Overview   227
Size and Structural Dimensions of the
Firm   228
Size: Is Bigger Better?   228
Structural Dimensions of the Firm   230
Centralization   230
Formalization and Standardization   231
Mechanistic versus Organic Structures   232
Size versus Structure   234
The Ambidextrous Organization: The Best of Both
Worlds?   234
Contents xvii
Modularity and “Loosely Coupled”
Organizations   236
Modular Products   236
Loosely Coupled Organizational
Structures   237
Managing Innovation Across Borders   240
Summary of Chapter   243
Discussion Questions   244
Suggested Further Reading   244
Endnotes   245
Chapter 11
Managing the New Product Development
Process   249
Scrums, Sprints, and Burnouts: Agile
Development at Cisco Systems   249
Overview   252
Objectives of the New Product Development
Process   252
Maximizing Fit with Customer
Requirements   252
Minimizing Development Cycle Time   253
Controlling Development Costs   254
Sequential versus Partly Parallel
Development Processes   254
Project Champions   257
Risks of Championing   257
Involving Customers and Suppliers in the
Development Process   259
Involving Customers   259
Involving Suppliers   260
Crowdsourcing   260
Tools for Improving the New Product
Development Process   262
Stage-Gate Processes   262
Quality Function Deployment (QFD)—The House
of Quality   265
Design for Manufacturing   267
Failure Modes and Effects Analysis   267
Computer-Aided Design/Computer-Aided
Engineering/Computer-Aided Manufacturing   268
Tools for Measuring New Product Development
Performance   269
New Product Development Process Metrics   271
Overall Innovation Performance   271
Summary of Chapter   271
Discussion Questions   272
Suggested Further Reading   272
Endnotes   273
Chapter 12
Managing New Product Development
Teams   277
Innovation Teams at the Walt Disney
Company   277
Overview   279
Constructing New Product Development
Teams   280
Team Size   280
Team Composition   280
The Structure of New Product Development
Teams   285
Functional Teams   285
Lightweight Teams   286
Heavyweight Teams   286
Autonomous Teams   286
The Management of New Product
Development Teams   288
Team Leadership   288
Team Administration   288
Managing Virtual Teams   289
Summary of Chapter   292
Discussion Questions   292
Suggested Further Reading   293
Endnotes   293
Chapter 13
Crafting a Deployment Strategy   297
Deployment Tactics in the Global Video Game
Industry   297
Overview   306
Launch Timing   306
Strategic Launch Timing   306
Optimizing Cash Flow versus Embr