Transcript Folie 1 - Indiana University

Innovation Management along the
Supply Chain of the European
Aviation Industry:
Measuring its Impact on Company’s Success with
Structural Equation Models
Dipl.-Kfm. Andreas Potzner
Doctoral Candidate
Advisor: Prof. Dr. Christopher Jahns
ebs European Business School
Supply Management Institute SMI™
International Research and Training Center for
Purchasing, Logistics and Supply Chain Management
Academy of Management
Atlanta
August 12th, 2006
Summary
 Stage in the dissertation research:
• Proposal defended in March 2006 and halfway through data collection.
 Dissertation topic:
• Measuring the impact of cooperative idea generation within the supply chain.
 Practical contribution:
• In both core markets European network airlines are loosing market shares but they could increase their
market shares through a cooperative idea generation with customers and suppliers.
 Academic/ scholarly/ theoretical contribution:
• It is remarked by Hauschildt that especially in the research field of the success of innovations (or
innovative ideas), cooperation between companies has hardly ever been conducted. (Hauschildt, 2004)
• Scientific theories (e. g. Game Theory, Transaction Cost Theory and the Relational View) are applied to a
real world problem.
 Primary research methodology employed:
• Survey and Structural Equation Modeling
 Unit of observation:
• Deutsche Lufthansa AG
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Illustration of the problem and the main research gap.
Problem
Solution
&
Market share 
Result
&
Cooperative idea
generation
a. o. Market share 
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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The firm and its possible innovation partners.
Public Administration
Supplier
Research & Education
• Subsidy, Infrastructure
• New Materials, Components
• Research, Technical knowledge
• Political Support
• New Means of Production
• Training, Education
• Mediation, Coordination
• New Systems
• Junior Employees
• Laws, De-Regulations
Co-seller in Systems selling
• Complementary Know-how
• Solving Interface Problems
The Firm
• Innovation strategy
• Technical Competence
• Network-Competence
Competitor
• Sharing Information
• Joint Basic Research
• Establishing Standards
• Publicity Promotion
Consultant
Customer
Trader, Distributor
• Innovation Concepts
• Market Informant
• New Trends in Demand
• Organization of Innovation Processes
• Defining new requirements
• Financial & Admin. Services
• Implementation partner
• Early Information about
developments of competitors
• Laws, De-Regulations
• Reference Appeal
Source: Gemünden (2004).
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Focusing on the idea generation within the dissertation.
Phases of the innovation process
Main phases
1. Idea generation
2. Idea acceptance
3. Idea realization
Specification of main phases
1.1 Determination of area of ideas
2.1 Checking of ideas
3.1 Concrete realization of the
new idea
1.2 Finding of ideas
2.2 Construction of plans for
realization
3.2 Selling of the new idea to
target group
1.3 Suggestion of ideas
2.3 Decision for one plan for
realization
3.3 Controlling of acceptance
Source: Thom (1980).
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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In both core markets European network airlines are loosing market shares.
Highly relevant problem for the aviation industry:
 General:
• Since European countries have financial problems and the liberalization of the aviation industry:
- It is easier for new competitors to enter the market.
- There are more competitors on the market.
- There is a bigger competition for the best price.
- The margins for airlines are getting lower.
 Air Freight Market:
• Since there are good insurances for damages the quality is getting less important.
• Integrators are getting more important:
- When analyzing total transport volume as an indicator in 2004, the first (FedEx) and the fourth (UPS) are claimed by
integrators. (IATA, 2005)
- When looking at Europe the players DHL and TNT have considerable shares. (IATA, 2005)
 Passenger Market:
• Low cost carriers are getting more important:
- In 2005 European low cost carriers had a joint market share of 16 %. (McKinsey & Company, 2005; Auerbach/ Delfmann, 2005)
- In 2010 European low cost carriers will have a joint market share of 24 % (McKinsey & Company, 2005; Auerbach/ Delfmann,
2005).
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Increasing the market shares of European network airlines through a
cooperative idea generation with customers and suppliers.
Solving the problem via a cooperative idea generation:
• Integration of consumers and suppliers – especially in the field of generating ideas – leads to considerable
advantages in competition. (Christiansen, 2000; Cooper, 1999; Handfield et al., 2004; Tether, 2003)
• Cross-company ventures may accelerate technological innovation.
(Powell, 2004)
• Consumers and suppliers are, besides the company’s own possibilities, the most important sources for
information about innovation. (Tether, 2003)
• Suppliers have a strong direct influence on cost, quality, technology and time-to-market of product
innovations. (Handfield et al., 2004)
• Supplier participation in product development projects can help reducing concept-to-customer
development time, costs at the same time improving quality and providing innovative technologies that
can help capture market share. (Handfield et al., 2004)
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Overview about research gaps.
 Main research gap:
• Keeping the focus on the network airlines an extensive literature review shows that there is not a single
work concerning:
- Measuring the impact of cooperative idea generation within the supply chain of the European aviation
industry,
- specifying the conditions for a cooperative idea generation
- and additionally describing what kind of innovative ideas can be cooperatively generated between the
key players of the European aviation industry.
 Some further research gaps:
• The current research for success factors is characterized by considerable methodological deficits. (Hauschildt,
2004)
• Within the research of success factors of innovations the aspect of cooperation of supply chain partners
has hardly been analyzed so far. (Hauschildt, 2004)
• “Whilst supply chain analysis and supply chain management has achieved a firm basis in literature,
attention to the processes of market induced innovation in and through chains and networks is relatively
new.” (Trienekens et al., 2003)
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Main question
Fundamentals
Leading research questions of the dissertation.
Research Question I:
Research Question II:
What kind of innovative ideas
are suitable for a cooperative
idea generation between airlines
and their customers & suppliers?
When is it possible to make a
cooperative idea generation
between airlines and their
customers & suppliers?
Research Question III:
How does the cooperative idea generation
between airlines and their customers &
suppliers affect cost, time and quality as
well as the airlines innovation success and
their individual company’s business
success?
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Hypothesis 1: A cooperative idea generation between
airlines and their customers & suppliers is better for an
innovation with a lower degree of innovativeness.
What kind of innovative
ideas are suitable for a
cooperative idea generation
between airlines and their
customers & suppliers?
When is it possible to make
a cooperative idea
generation between airlines
and their customers &
suppliers?
How does the cooperative idea
generation between airlines and their
customers & suppliers affect cost,
time and quality as well as the airlines
innovation success and their
individual company’s business
success?
 Incremental innovation:
• Takes place in known markets with known fields
of application.
• Usually no new technologies are introduced.
• Ways and means are new.
• During the last 25 years about two thirds of
successful innovations are incremental
innovations.
 Radical innovation:
radical
innovation
pace maker
technology
key
technology
incremental
innovation
• Is characterized by a high degree of novelty and
complex changings in the firm.
• Radical innovations bear a higher economic risk
than incremental innovations.
base
technology
• The chances of a market success are higher, the
more they satisfy customer‘s needs.
today‘s
market
extended
market
completely
new market
Source: Pleschak, Sabisch (1996).
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Hypothesis 2 & 3: A cooperative idea generation between
airlines and their customers is better for a product innovation
and with their suppliers better for a process innovation.
 Customers:
• Customers are typically partners for product innovations.
• Intensive and daily use of producer‘s products.
• They know the limits of product application.
• They can communicate their experiences and possible
troubles. Moreover, they can set miles stones for
innovation.
What kind of innovative
ideas are suitable for a
cooperative idea generation
between airlines and their
customers & suppliers?
When is it possible to make
a cooperative idea
generation between airlines
and their customers &
suppliers?
How does the cooperative idea
generation between airlines and their
customers & suppliers affect cost,
time and quality as well as the airlines
innovation success and their
individual company’s business
success?
 Product innovations:
• Through product innovations a new kind of product is
created. It enables the consumer to fulfill new purposes
or it fulfills an existing purpose in a completely new way.
• Objective: Improving effectiveness (thereby it is also
possible to gain efficiency).
• Special role of lead users.
 Supplier:
• Suppliers are typically partners of process innovations.
• They can contribute to process innovation success of
focal company by providing better or new machines.
• Administrative / organizational adjustment and product
modification enable process optimization at the focal
company (e. g. Just-in-Time delivery or shortened lead
times).
 Process innovations:
• Process innovations are new combinations of factors.
This changes make the production of a good either
cheaper, faster or improve the quality of the produced
good.
• Objective: Increasing the efficiency.
• Suppliers can sensitize focal company on new products
(e. g. better satisfaction of needs, higher reliability of
delivered product) and in this way contribute to success.
Source: Hauschildt (2004), Gemünden (2001).
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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What kind of innovative
ideas are suitable for a
cooperative idea generation
between airlines and their
customers & suppliers?
Hypothesis 4 - 14: In accordance with the chosen form
and intensity of an innovation cooperation special
requirements have to be fulfilled.
When is it possible to make
a cooperative idea
generation between airlines
and their customers &
suppliers?
How does the cooperative idea
generation between airlines and their
customers & suppliers affect cost,
time and quality as well as the airlines
innovation success and their
individual company’s business
success?
fundamental fit
duration
cultural fit
trust
legal requirements
uncertainty
transparency
political requirements
absorptive capacities
cost-benefit-sharing
investments
experiences
strategic fit
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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A theoretical research model for the third research
question.
What kind of innovative
ideas are suitable for a
cooperative idea generation
between airlines and their
customers & suppliers?
When is it possible to make
a cooperative idea
generation between airlines
and their customers &
suppliers?
How does the cooperative idea
generation between airlines and their
customers & suppliers affect cost,
time and quality as well as the airlines
innovation success and their
individual company’s business
success?
cost reduction
success of
product
innovation
company’s
success
quality increase
success of
process
innovation
= formative construct
time reduction
= reflective construct
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Explanation of the empirical research.
1. Research type: Quantitative
2. Format: Standardized questionnaire
3. Methodology of asking: Using an online tool of Lufthansa for questionnaires
4. Target group:
1. Lufthansa Cargo AG (freight): Sales, Purchasing, Network Development, Innovation, Strategy
2. Deutsche Lufthansa AG (passenger): Sales, Purchasing, Innovation, Marketing
5. Unit of observation and sample size:
1. Lufthansa Cargo AG (freight): 60-100 participants
2. Deutsche Lufthansa AG (passenger): 60-100 participants
6. Geographical scope: Europe
7. Timeframe: August 2006 and September 2006
8. Analysis of data:
1. Research questions 1 & 2: SPSS
2. Research question 3: SmartPLS
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Some open questions are left.
1. How can I justify that I only ask Lufthansa (air freight market and passenger
market)?
2. How many participants do I need for using SPSS?
3. Is it to much for one dissertation?
4. Do you have any relevant literature concerning my topic?
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Thank you very much for your attention and support!
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Back up Slides
Cooperation is a hybrid form between market and hierarchy.
 In general there are three forms of organization:
• market,
• hierarchy,
• cooperation.
 In business science there are plenty of papers
concerning the term cooperation and its meaning.
 In this lecture we define cooperation as follows:
• A cooperation is a national or international
collaboration – either voluntary or contractually –
between legally and – at least in the beginning –
economically independent entities (companies,
universities, research institutes, organizations or
institutions).
Source: Williamson (1991) and Schüller (2002).
© Supply Management Institute SMI™ • ebs European Business School • D-65201 Wiesbaden • Tel.: +49 (0) 611 36 018 800 • E-Mail: [email protected]
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Organizational forms of innovation cooperation: [1/2]
 One can distinguish between four types of innovation cooperation, namely (1) horizontal, (2)
vertical, (3) diagonal and (4) conglomerate innovation cooperations.
(1) Horizontal relationships:
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Between companies of the same industry.
-
Companies compete on sales market.
-
Value chains of partners are not affected.
-
Common between direct competitors in order to save money and time further to get know-how
advantages.
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Example: Star Alliance.
(2) Vertical relationships:
-
Between companies that are on different tiers of the same value chain (consumer-supplierrelationship).
-
Cooperations between producer and supplier are typical.
-
Various characteristics (reaching from simple supplier-relationships with manufacturing of components
to partnerships in development).
-
Exist between producer and customers of products and services as well (e.g. pilot applications of new
products).
-
Example: Cooperation between Lufthansa and Airbus.
Source: Pleschak/ Sabisch (1996).
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Organizational forms of innovation cooperation: [2/2]
 They subdivide (1) horizontal, (2) vertical, (3) diagonal and (4) conglomerate innovation
cooperation.
(3) Diagonal relationships:
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Companies from different industries and different tiers of the value chain cooperate.
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Players are acting on different markets but cooperation on neighboring markets.
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Increasing application on new technology field with broad application spectrum.
(4) Conglomerate relationships:
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Cooperation on markets that are unrelated to the markets of the cooperation partners.
Source: Pleschak/ Sabisch (1996).
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References.
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