CE

Proposition 1: Long-lived family firms display constantly high levels of external autonomy across time, whereas internal autonomy increases as later family generations join the firm

roposition 2: The level of external innovativeness (new markets, products, and technological services) and internal innovativeness (new processes, structures, and management systems) in long-lived family firms fluctuates across time

=> WAVES

Proposition 3: Long-lived family firms display higher levels of ownership risk and lower levels of both performance hazard and control risk. 

Proposition 4a: Proactiveness in long-lived family firms fluctuates over time, with periods of low levels of proactiveness interspersed with carefully selected proactive moves.

• Strategic opportunity to be patient
• ( maybe not be the first but the second to do the move, let try the others first 
  But when you act do  it!! all in )
• When active, high persistence and excellence in implementation

Proposition 5: Competitive aggressiveness of long-lived family firms decreases over time due to reputation concerns of the controlling family(Same name so connected to the past)

• Strong wish to dominate a market niche while avoiding the competition 
• Striving to what has been labeled "hidden champion” (fly under the radar)
• “Live and let live” (accept competitors) 
• Reputation concerns 

Both low, wendys  :

• Prediodic/Inclemental 

High frequency of entrepreneurship, low degree of EO; P&G:

• Continuous / Inclemental 

middle : regular innovation;

• Dimanic 

both high; Google;

• Revolutionary 

Bring new businesses to the corporation 

Internal or external corporate bventuring 

• an acticity which seeks to generate new busiensses for the corporation
• It involves entrepreneurial efforts in which established business organizations invest in and/or create new businesses 
• It is about regeneration an organization by giving it new competencies 

Internal Corporate Venturing

• New businesses created and owned by the corporation
• Part of existing organizational structure
• Or in new organizational entities within the corporate structure

Cooperative Corporate Venturing (joint corporate venturing) (Mixform) 

• New businesses created and owned by the corporation together with external partners
• Exist as external entities beyond the organizational boundarie

External Corporate Venturing

• New businesses created by third parties
• Corporation subsequently invests in or acquires it
• Typically very young ventures or early growth-stage firms
• Exist as external entities beyond the organizational boundaries

• Make the corporation more entrepreneurial
• Build new/innovative capabilities
  • Introduce new technologies
  • Enter new markets
  • Drive overall corporate growth
• Generate (quick) financial returns
• Leapfrog” out of declining businesses
• Balance exploration and exploitation (class 4) 

•  An initiative whereby a firm stimulates entrepreneurial activity and new business development within its boundaries 
• Building entrepreneurial businesses within existing corporations («corporate new venture creation») 
• Set of activities used to create inventions through internal means

• Activity separated from other ongoing operations ( an internal selction group that is responsible for innovation) 
• Corporate entrepreneurship domain of autonomous work groups
• These pursue entrepreneurial aims independent of the rest of the firm

Example: Signode V Team 

Key facts: Signode • Manufacturer of plastic and steel strapping • USD 750 million in sales, located in Glenview, IL • Aggressive strategy for growth

Task: suggest new business opportunities • Min. USD 50 million to be generated in 5 years • Needs to build on corporate strengths • Basic technology had to exist • Initial investment of USD 30 millions or less

Characteristics

• High risk-taking abilities
• Creativity
• Participants are multidisciplinary volunteers
• Various backgrounds

Success

• Not all were successful in developing promising ventures
• One did, generating > USD 50 million sales
• Enthusiasm created and spread across organization

 Corporate division with own staff and budget ( like loistics, marketing etc.) 

• Identify potential venture partners
• Gather resources
• Actually launching a venture

Aka: «New Venture Division», «Corporate Venturing Units"

•  Grow businesses identified by the NVG ( NV Group)
• Support and nurture until they thrive on their own
• Later: decision about integration into existing corporate division (What happens then?) 
• ( help them step by step) 

•  Funding
• Physical space
• Business services (phones, IT, public relations, personnel management)
• Mentoring
• Networking

• Frees team members to think and act entrepreneurially
• Leads to open-minded creativity
• Invigorate learning processes
• Protection of ideas and strategic assets
• Existing competencies can be leveraged
• Signaling effect (internal and external)

• Isolation from corporate mainstream ( the creative people are a aussenseitergroup in the company )
• May fail to obtain resources & support to carry project to completion  (if not successfull at the beginning, theyc an cut the budget )
• Cultural challenges (innovative peole vs the rest )

• Occurs when larger companies «buy in» innovation by acquiring smaller companies
• Activities whereby the firm engages with external constituencies such as entrepreneurial ventures and venture capital firms
• ( big company with money buys small startups ) 

• Not short-term financial gain but rather innovation and strategic foresight ( strategie says what resources we need for the future, tehn you by or innovate) 
• When innovation performance is lagging behind ( buying innovation external is quicker then be innovaative themselve) 
• Survive in “Schumpeterian environments”

• Innovation & knowledge transfer from external sources
•  «Quick» to execute ( Because you buy it) 
• External sources of finance comparably easy to find ( bans see assets and helps)
• Highly motivating to the staff involved ( staff will stay because on new opprtunities in big company) 
• Spread risk ( if one boat is sinking not too bad) 

• Risky investment
• Investment in venture management and networks necessary
• Lack of complete control of innovation development ( because startup have intelectual properties etc) 
• Cultural issues ( does it match')
• ( not invented here syndrom, we bought it so not really our team )

• External funding
• Enhancement of own reputation/valuation •
• Improvement of operations (R&D, manufacturing, distribution)- access to shelf space and retailer 
• Capitalize on corporate resources
  • Use laboratories
  • Access to network of customers and suppliers
  •  Access to domestic and foreign distribution channels
  • Use corporate lawyers
• Enhance chances of succes

• Parent firm wants to maximize own overall value ( the own value and not the value of the startupt) 
• Parent firm may produce competing products ( blockbuster buing netflix to get rid of them) 
• Expropriation of IP ( what does the company do with the property rights?) 
• Parent firm may lack crucial expertise

• Commitment of senior management ( carefully screen the market and integate, COMMITMENT) 
• Consistent with corporate strategy ( matching?) 
• Effective HR policies
  • Keep talented staff in acquired firm
  • Encourage continuity
• Sufficient (financial) capital to use ECV strategically
• Find the right target ( need to have a good searching stategy go find target) 
  • Search mechanism needs to be flexible
  • Use dedicated teams searching for potential acquisitions ( experts searchng and convincing) 
  • «Beat venture capitalists at their own game ( convince to sell startup) 

Market uncertanty: High ( if you dont knoe what is coming but you know that you can do it ( no mater what will come)

Firm capabilities and learnign distance: Low ( we can do it) 

=> 1: Internal venture ( internal corporate venturing) 

When to hcoose it: 

• Distruptice innovation needed 
• exact type not sure yet 
• firm has skills / capabilities/resources for inventing 

2. Joint venture ( cooperative corporate venture) 

( not capable and the uncertanty is hig. so joint venture. so you spread the risk ) 

When to choose it 

• desired invention does not exist yet
• not fully clear yet what is needed
• capabilities/ learning too distant 

3. Acquisitions ( external corporate venturing) 

When to choose it: 

• opportunity quite evolved 
• capabilities not available internally 
• but necessary capabilities cleat 

( we can do it but we know what is needed ( what will come) so you buy a start up that offers the missing resoruces)

4: no entrepreneural entry 

When to choose it: 

• when only incremental innovation is sufficient ( products, processes)
• cst reductions doable 
• will this context remain stable? 

( Wait, potential not big enoth. so wait for the next big wave. UNCERTANTY status can change an be high in a sudden, then you need to act) 

• Internal venture capital funds that are used to invest in external new ventures ( fund that invest in startups with potential) 
• Either strategically important or financially attractive
• Target: new businesses in specific technology or product-market arenas

Venture capital arm of swisscom AG

Offers: 

• Operations 
• expertise 
• scale 
• Network 

 Founded in 2000 • 2010: independent venture capital firm (HV capital) • 2020: around 200 investments, 1.7bn Euros assets under management • See: https://www.hvcapital.com/

Zalando, Fliybust, StudiVZ....

“External corporate venturing refers to corporate venturing activities that result in the creation of semi-autonomous or autonomous organizational entities that reside outside the existing organizational domain” 

Franchising: 

• “A business form essentially consisting of an organization (the franchisor) with a markettested business package centered on a product or service” •
• Entering into a continuing contractual relationship with franchisees, typically self-financed and independently owner-managed small firms”
•  “Operating under the franchisor’s trade name to produce and/or market goods or services according to a format specified by the franchisor”

• Sharing complementary resources to overcome resource constraints and enhance the value-creating ability of both parties
• Franchisor and franchisee combine their resources to create bundles with the capability to create more value than either party would create acting independently 
• 1+1=3

• Copyrights, patents and formulas
• Registered brands
• Networks, procedures, and operations
• Purchasing power
• Management/marketing assistance and advice