CE

1. Strategic Renewal
2. Sustained Regeneration
3. Domain Redefinition
4. Organizational Rejuvention 
5. Business Model Recostruction

• Firm “seeks to redefine its relationship with its markets or industry competitors by fundamentally altering how it competes” (firms change the position in the market)
• Strategic renewal represents fundamental repositioning efforts by the firm within its competitive space (from unhelaty to healthy food MC)

• Firm “regularly and continuously introduces new products and services or enters new markets”
• Mostly incremental innovations (product extensions, related markets)
• Attain/sustain competitive advantage when product life-cycles are short, technological standards change, products/market get segmented
• “Innovation machines” 
• ( not reinvent the world buy every day a new thing 

• 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)