CE

• Firm “proactively creates a new productmarket arena that others have not recognized or actively sought to exploit” (you do sth that nobody else as ever done before) 
• Move into unoccupied competitive space (“blue ocean”)
• Redefine boundaries of existing industries 
• ( Zirkus, Musikal and Theoter all toghether )

•  Today, new products and prices are available and easily accessible
• Niches vanish
• In many product categories, supply exceeds demand
• Price becomes the most important buying argument for customers

RED OCEAN: Market where competition is high, price pressure is severe, and differentiation is more and more difficult to achieve

• untapped market space, demand creation and the opportunity for highly profitable growth. in blue oceans, competition is irrelevant because the rules of the game are waiting to be set 
• "Value innovation": a combinaiton of differentation and low cost that sets a product line or service apart from its competitiors 
• actual saving plus appreciable benefit
• competition is irrelevant- there is none 

BLUE OCEAN: Market which can be created by changing factors influencing customer values. Competitors are pushed back.

• Org changes internaly, do what they already did but more efficient.
• Firm “seeks to sustain or improve its competitive standing by altering its internal processes, structures, and/or capabilities”
•  Focus of innovation: internal operations that implement firm’s strategy
•  General focus: efficiency and effectivenes

• design or redesign of core busienss model 
• Business Models : " stories that explain ow enterprises work" 
• " a structural template of how a focal firm transacts, with customers, partners, and vendors"
• Business model nicht gleich business plan
  • business model: what you do 
  • business plan : how you do it 
• netflix from DVD zu Streeming 

• both handen
• An organization’s ability to be aligned and efficient in its management of today’s business demands as well as being adaptive to changes in the environment at the same time
• Ambidextrous organizations are capable of simultaneously exploiting existing competencies and exploring new opportunities (Raisch et al., 2009) 

• Search, discovery, experimentation, risk taking, innovation
• From opportunities to innovations: often not obvious, hidden desires (latent needs) 
• if I had asked people what they wanted, they wouldhave said faster horses

• Refinement, implementation, efficiency, production
• Improved innovations: Continuously refined products and services
• Dark side: Dynamic conservatis ( staying to the same thing can be dangerous) 

•  Be extremely good at both or have a good balance?
• Exploration / exploitation require substantially different structures, processes, strategies, and cultures
• Tension because of scarce resources
• Critical managerial task: resource allocatio

relative exploration : 

Relative share off exploration ( entrepreneurship) vs. sxploitation ( strategic management) 

DEPENDS on the industry: 

Dynamic: hing indrusts R%D: 0.25 Exploration and .07 exploitation 

lox R%D industry: 07 Exploration good 

• OA refers to the simultanuous use of explorationa dn exploitation 
• meaning tha ambidexterity is present when organizations ( or individuals) engage in high levels of both at the same time and not in low level of one or both
• HOW should you actually calculate the level of Ambidexerty? 
• Preconditions of ambidexterity to occur: that explorationd and exploitation are 
  • orthogonal to wach other ( x, y und nicht linie) 
  • independent 
  • nun subsitutional 

Exploration and exploitation commonly assessed with 4 items each (average calculated)

How important are the following objectives for undertaking innovation projects in your business (1=not important at all, 7=very important)? 1-4 exploration / exploitation

1. 1. Introduce new generation of products/services
2. 2. Extend product/service range
3. 3. Open up new markets
4. 4. Enter new technology fields 
5. Improve existing products quality
6. imporve fexibilita in producing goods 
7. reduce costs of producing goods
8. improve yield or reduce material consumption

THen use a multiplicative score ( one time the other), 

• Apply creativity and entrepreneurial thinking to the development of a core strategy for the company
• «A vision-directed, organization-wide reliance on entrepreneurial behavior that […] rejuventates the organization […] through the recognition and exploitation of entrepreneurial opportunity»

Challenges

• Discovering unique positions is difficult
• Breaking away from status quo as well
• Entrepreneurial strategy is risky ) invest a lot withour knowling if it works) 

• to what extend are entrepreneurial activities and core strategies integreted? 
• corporate venturing activity ( CV) vs. business strategy ( BS) 
• Model 1: CV and BS are unrelated or only weakly related 

Disadvantages: 

• less synergies
  unfitting strategies 
  misscommunicaiton 
  partenrs contradict each other
  no clear vision
  no integration in core business 

advantages

• free of contrains, speed boat strategy
  most convenient model, you have a well running business and just open anew little one that can do sth else. 
  if you want a blue ocean ( freedom, etc) 

BS drives CV

• Unidirectional relationship 
• BS designates areas for innovation and CV

Disadvantages: 

• little exploitation
  mis sopportunities because not enoth freedom 
  frustrating as CV team
  no free thinkin
  no communication the other way around so you miss imput from the CV 
  more pressure 

advantages: 

• competitive advantage( Exploitation is not bad,) 
• can also be successfull in red ocean 
• keep fokus and a direction 
• everage resources, synergies

CV drives BS 

• Unidirectional relationship
• BS is emergent and continuously
•  Example: P&G under CEO Jager (1990s) • Investments in diverse new ventures • If successful, they would take the firm in new strategic directions • Core established businesses treated as cash cows

Disadvantage 

• no structure, no clear guidance 
  if you let flow everything= too caotic
  conflicts for resoruces 
  volatility( uncertanty where to go) 
  risk is high 
  lose corporate entrepreneurs because they want to do it by their own 

advantages 

• aximize exploration (blue ocean possible) 
  diversify 
  attract Corporate entrepreneurs 

CV and BS are reciprocally interdependent

•  BS opportunistically redefined through emergent CV activities
• BS specifies general directions and domains for innovation/CV ( but in a wide sence, still a lot of freedom) 
• Example: Skandia AB • Informal, two-way communication channels between top management and lower-level corporate entrepreneurs • Circumvents organizational hierarchy

CV as the BS ( CV is BS)

• A combination of Models 3 and 4?
• But: CV initiatives need to respond to the firm’s innovation imperatives ( need to follow the rules but its all one so cant really disintinguish it) 
• More purposeful firm with greater focus and direction
• «Entrepreneurship as important shared value»
• Example: 3M • CV as a core element of business activity • Continuous strategic renewal through CV is «normal» • Strategic interests in plac

Y: Innovation 

X: Risk 

• LOW/LOW : Musiklehrer: not innoative but risk low because not a lot of competitors/ here: Protect position, relationship with costumers is important
• Inno low, risk hign: Frisör:red ocean, high risk because not innovative, try to find a position where you can say that you are different from the others 
• risk low, inno high: LEGO: the first ones with that kind of brick that you can combine with other bricks / TODO: Protect and exploit
• high/high: high innovative car in the 80 ies , risk very high beause very costy , Danger of failure, so try to reduce risk by joint ventures etc. 

• develop an entrepreneurial vision
• insitutionalize change ( change is normal and gerne gesehen, opportunity, 
• invest in poeples ideas 
• shra risks and rewards with emplolyees 
• recognize the importance of failure( part of the process) 

• Organizational structure & over bureaucracy
• innovation without commercialization 
• little focus on user experience
• culture aund communication

• During growth period: decentralized, fluid, improvisational structure with freedom for people
• Matrix structure since 2004 •
  • Not fitting for one of the fastest-moving industries
  • Bad coordination: software lease & lease back, incompatible address book features
• 2009: restructuring of the matrix organization
  • “Solutions” becomes a third dimension •
  • Organization becomes even more rigid and top-heavy
  • Many “yeses” versus one “no”
• Nokia Headquartes POWER POINT PLACES ( just meeting without a decision) 
• Suppliers offering novel solutions had to wait months while Nokia managers went through rounds after round of meeting 

Take home: If you grow you have to adapt moving dinamic industry

Portfolio of 30’000 patents • Prototype device with large color touchscreen set above a single button 7 years before the iPhone • 2005: Nokia 770 Internet Tablet • iPad launched 2010

• they were innovative but didnt indtoduce the products because the old ones have been good sellers 

• little focus on user experience 
• communication ( mails about how bad it is going, no trust anymore) 
•  

It describes entrepreneurial behavior inside established organizations, indicating how entrepreneurial a firm as a whole is. 

It describes entrepreneurial behavior inside established organizations, indicating how entrepreneurial a firm as a whole is. 

• The process whereby an individual or a group of individuals, in association with an existing organization, create a new organization, or instigate renewal or innovation within that organization.
• An organization is entrepreneurial if it develops a higher than average number of new products and/or new markets.
• 1) the birth of new businesses within existing organizations, i.e. internal innovation or venturing, and (2) the transformation of organizations t

• Involve opportunity recognition, evaluation, and exploitation
• Require a unique product, service, or process
• Imply encountering resistance and obstacles
• Entail risk and uncertainty
• Entail a window of opportunity

Start up Entrepreneurship / corporate entrepreneurship 

• entrepreneur "owns" the concept od innovative idea / Company owns the concept and usually intelectual rights
• entrepreneur owns all/much of the business / Enrepreneur may have no /little equity in the company 
• potential rewards for the entrepreneur unlimited / clear limits on the financial rewards for corporate entrepreneurs
• one misstep can mean failure / more room for errors; company can absorb failure 
• flexibility in changing course, experimenting, or trying new directions / rules, procedures, and bureaucracy
• severe resource limitations / access to finances, R&D, production facilities, sales force, distribution channel, costumer base 

• “Start-up advantage": high level of motivation and effort
• Flexible structures and good communication
• Direct and quick decision processes
• Cost advantages
• Orientation towards the clients' needs
• Charismatic entrepreneurs
• „Can do“ attitude

• Established processes and organization
•  Know-how, networks, and resources
• Economies of scale
• Established brand / better marketing
• Know about young firm's advantages

independent entrepreneurship 

corporate Entrepreneurship 

• strategic Entrepreneurship " innovate for competitive advantafe" ( class 4) 
• corporate Venturing " Bring new business to the corporation" ( Class 3) 

•  Existing assumptions challenged
• Value creation in novel ways anywhere
• New product and service introduction at a record rate
• Redefined: what you make, how you make it, where you sell it, how you distribute it

in a nutshell: 

• The pace and magnitude of change are significantly greater than ever before
• Performance and survival at stake
  • Act quickly or miss out opportunities
  • External forces force internal changes
• Established companies can either become victims of this revolution or join it

in a nutshell: 

• The pace and magnitude of change are significantly greater than ever before
• Performance and survival at stake
  • Act quickly or miss out opportunities
  • External forces force internal changes
• Established companies can either become victims of this revolution or join it

• Sustainable competitive advantage needed •
• What is not working
  • Be static and rely on previous success •
  • Too much exploitation
  • Bureaucracy, hierarchy, and «command-and-control»
  •  
• What is needed
  • Continually adjust, adapt, and redefine
  • Adaptability, flexibility, speed, aggressiveness, innovativeness
  • Sense that turbulence and change mean opportunity
  • Corporate entrepreneurship!

• counter the threat of new entrants
• Satisfy and retain motivated employees
• Utilise under-exploited resources
• Divest from non-core activities
• Grow and diversify business activities

=> Entrepreneurship and innovation on the firm level as a key to long-term growth and performance.

Employees’ entrepreneurial behavior (individual level)

• Creation of entrepreneurial atmosphere
• Support of subordinates
• Generation of own ideas •
• Implementation of entrepreneurial actions

Corporate Entrepreneurship (firm level) 

•  New products
• New markets
• New services
• Corporate venturing
• Renewal from within

Company performance 

• (Financial) performance
• Growth
• Success across generations
• Competitive advantages
• Survival

The Theory of Economic Development« (1911)

•  Interested in how capitalism administers existing structures, but also how it creates and destroys them
•  Economic development is a dynamic process: it is a disturbance of the economic status quo

•  Bring the economy out of the equilibrium by means of "creative destruction“
• “Process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one“

• Occurs when an entrepreneur sets up a new business
• By destroying existing market structures and shifting market shares to itself, wealth is redistributed
• “Creative destruction process”: creation of innovations and new wealth combined with the destruction of market structures