Transcript The Importance of Intellectual Property (IP) for Businesses, Chambers and other Business Support Organizations in a Knowledge-Driven Economy Dr.

The Importance of Intellectual
Property (IP) for Businesses,
Chambers and other Business
Support Organizations in a
Knowledge-Driven Economy
Dr. Guriqbal Singh Jaiya
Director
Small and Medium-Sized Enterprises Division
World Intellectual Property Organization
www.wipo.int/sme
SMEs Website
IP for Business Series
• Making a Mark
(Trademarks)
• Looking Good
(Designs)
• Inventing the
Future (Patents)
• Creative
Expression
(Copyright and
Related Rights)
Barriers to for
SMESMEs
IP Activity
IP Challenges
1.Cost – Both direct fees and
opportunity costs
2.Value for money
3.Complexity
4.Time
5.Need for secrecy
6.Difficulty in enforcing IP rights
Still the case, since the mid 1900’s
European Commission adopted a Communication on
a new industrial property rights strategy for Europe:
Brussels, 16 July 2008
•Ensuring high-quality industrial property rights in Europe that
are accessible to all innovators, including small and mediumsized enterprises (SMEs). To achieve this, the Commission
will undertake studies on the quality of the patent system and
on the overall functioning of the trademark systems in the EU.
This would also include the Community trademark, which the
Office for Harmonisation of the Internal Market has been
successfully registering for over 10 years. .
•Facilitating exploitation by SMEs of industrial property rights.
The Communication outlines measures to facilitate access to
industrial property rights and dispute resolution procedures,
and to improve awareness among SMEs of the management
of industrial property as an integral element within an overall
business plan.
The Commission
- continues to work on an efficient and cost-effective,
high quality and legally-secure patent system at
European level, including a Community patent and
EU-wide patent jurisdiction
- will explore how the fee structure for the future
Community patent can be designed to facilitate
access for SMEs.
Pending the adoption of the Community patent,
Member States are encouraged within the
Community framework for State aid for Research and
Development and Innovation
- to make use of the provisions to support industrial
property rights
- explore ways SMEs can make better use of rights
within this framework such as reducing patent fees,
or tax incentives to promote licensing activity .
The Commission will
-explore how mediation and arbitration
can further be encouraged and
facilitated in the context of ongoing
work on an EU-wide patent litigation
system.
Member States are
- encouraged within the context of the
Lisbon strategy to provide sufficient
support for SMEs to enforce their
industrial property rights.
The Commission will
- assess the IPR Helpdesk in China with
a view to providing optimised IPR
support services for SMEs in third
countries and to assessing the potential
for continued and expanded support.
Member States are encouraged to
- raise awareness of intellectual asset
management for all businesses and
researchers, including SMEs.
ICC has launched the BASCAP
initiative – “Business Action to
Stop Counterfeiting and Piracy”
Model IntellectualProperty Guidelines
for Business
May 08;Enterprise Europe Network Launched in Ireland:
A new and extensive European business and technology partnering
network for companies. http://www.enterpriseireland.com/News/Press+Releases/2008/PressMay082008.htm
The 5 Chambers (in Cork, Dublin, Galway, Sligo and Waterford) plus
Enterprise Ireland have united with all the major players in the European
business and technology partnering community to offer an accessible
"one-stop-shop" service to help SMEs, in particular, to access the
following services:
- Information on European legislation e.g. health & safety, environment
and labelling
- Finding suitable business partners and identifying market opportunities
- Identifying and sourcing proprietary, licensable technologies from
international sources
- Assisting with intellectual property issues and license agreements
- Assistance with licensing out proprietary technology
- Helping SMEs access European research funding
- Involvement in EU policy making and providing a channel for SMEs to
give their feedback to the European Commission.
IP-system Supporting SME´s and Employment
IdeaPilot
Finnish
Innovation
System
Fostering
Creativity
IdeaPilot
2008 PILOT
1
IP-system Supporting SME´s and Employment
IdeaPilot
What is it all about?
Finnish
Innovation
System
Fostering
Creativity
• Brand-building
• Investment for commercialization
• Knowledge management
4
IP-system Supporting SME´s and Employment
IdeaPilot
Background studies:
The Planning situation in SME´s
Finnish
Innovation
System
Fostering
Creativity
• The know-how of the entrepreneur is a key factor
• Development is a simple process:
• idea – development – implementation – feed-back
• Time is a scarce resource
• The planning skills are often small or limited
• IP is competing with other means of developing SME-business
12
IP-system Supporting SME´s and Employment
IdeaPilot
The Strategy for Winning Trust
Finnish
Innovation
System
Fostering
Creativity
 understand SME´s appropriate business processes
 locate IP-potential companies and decision makers
responsible for those prosesses
 INTEGRATE IP-services to business processes
 INTEGRATE first-phase delivery to
intermediary organizations service processes
22
IP-system Supporting SME´s and Employment
IdeaPilot
Finnish
Innovation
System
Fostering
Creativity
The critical success factors of the
project:
• home-work concerning the target group
• create desirability towards IP-system
• develop it´s usability
• improve the accessibility of services
23
IP-system Supporting SME´s and Employment
IdeaPilot
Finnish
Innovation
System
Fostering
Creativity
First steps:
1) Focus to the target group
2) Create an approach
3) Build your network
IP-system Supporting SME´s and Employment
IdeaPilot
Government Programme 2007:
Finnish
Innovation
System
Fostering
Creativity
--------”As part of the effort to strengthen national innovation policy, a
national strategy for industrial and intellectual property rights
will be drawn up.
Attention will be focused on the potential of SMEs and private
inventors to use various forms of protection and thereby
improve the commercial potential of their products.”
---------
25
IP-system Supporting SME´s and Employment
IdeaPilot
Finnish
Innovation
System
Fostering
Creativity
Background studies: The Status of Awareness and Usage
of the IP-system
The Usage of the IPR System (most IP-potential companies)
Strategic use
Liikesalaisuus
Trade Secret
Planned use
Trade Toiminimi
name
Occasional use
Tavaramerkki
Trade
Mark
No use
Patent Patentti
Mallisuoja
Design
Right
Tekijänoikeus
Copyright
Hyödyllisyysmalli
Utility Model
0%
käytetään strategiatasolla
Käytetään satunnaisesti
25 %
50 %
75 %
100 %
Käytetään suunnitelmallisesti
Ei käytetä lainkaan
(SME - barometer 2007: 82 % has no IPR´s)
11
IP-system Supporting SME´s and Employment
IdeaPilot
Background studies: Intermediate organisations
Foundation for Finnish Inventions,
27+ 9 innovation managers
Finnish
Innovation
System
Fostering
Creativity
Tekes (National Technology Agency)
15 outlets
Technology Industries in Finland
The Federation of Finnish Enterprises
The Confederation of Finnish Industries
Chambers of Commerce
Regional development
companies
hundreds
SME´s
Jobs and Society
33 outlets
EED-Centres
15 outlets
Start-up´s
Regional financiers
appr. 100
Centres of Expertise
covers 3 000 companies
Technology centres
22 outlets
13
Regional BSP:s
50 outlets
Consultants,
experts
appr. 100
Universities, 21
vocational high-schools, 31
R&D networks
4 + 11
IP-system Supporting SME´s and Employment
Usability: The structure of the IP-workbook
IdeaPilot
Management
Personnel, resources
Fostering
company know-how?
Employment
inventions?
Protecting
policy?
Implementing?
Responsibilities?
Intellectual
property?
Trends?
Markets, surveys
Competitors?
How to convince
financier?
Financing
Immaterialstrategy
Risk analysis?
Disclosing
business critical
information?
Standing out
in the market?
Freedom
to
operate?
How to
defend
infringements?
Marketing
17
Avoiding
redundant
R&D?
Make or Buy?
Licencing?
Partnerships?
How to protect
spearheadtechnology?
Key technology?
Monitoring
technical
development?
Evaluating
R&D project?
Technical
solutions?
Possibilities
to protect
technology?
Product
development
Production
methods?
Production
ip4inno
DISSEMINATION
IP-system Supporting SME´s and Employment
IdeaPilot
Business advisors, consultants
Information sessions
Network of business advisors
Network of consultants, first phase
Training for consultants:
Use of Pre-Diagnosis
ADVANCED - Programme
Network of consultants, advanced
tools: IP-Score, Imp3rove
New IP-consultancy concepts
available for SMEs
IP-system Supporting SME´s and Employment
IdeaPilot
Accessibility: Directly to SME´s, integrated to public service
Finnish
Innovation
System
Fostering
Creativity
Consulting process for the SME´s
ProductStart
Discussion with
the innovation
manager
in EED-Centre
1. consulting day
1 – 3 consulting days
1 – 5 additional consulting days
ProductStart is a consultancy concept created in
cooperation with EED-centres and produced by
private business consultants subsidized by EED-Centres
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IP-system Supporting SME´s and Employment
IdeaPilot
Accessibility: Directly to SME´s, integrated to public service
Product Start
Finnish
Innovation
System
Fostering
Creativity
Idea for product or service
IPR
viewpoint
-state-of-the-art
-novelty
-competition
-protection
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Marketing
viewpoint
Technical
viewpoint
Summary, reporting
Financial
viewpoint
Networking
viewpoint
IP-system Supporting SME´s and Employment
IdeaPilot
Activities 2008 InnoTraining-
IP-BASE
Training for Information Specialists
(PRH, VTT, TKK, Tietoas.)
project
(PRH, EU)
5)
Pre-Diagnosis
Training for
consultants
2)
11)
Imp3rove-
ip4inno-
InnoConsulting-
project
(PRH, EU)
7)
3)
Training for Consultants
(PRH, PKT-säät.)
2007
2008
InnoInfoPatent Information
in Product Development
and Marketing
(PRH, VTT)
8)
Training for
consultants
12)
2009
EnterPrise
Finland9)
BA-Training
Training for Business
Advisors
13)
project
SME Work-Shops
10)
-road-show for
SMEs
1)
Travelling work-shops
for SMEs
IP-Training
6)
for
SMEs
InnoInfo II
Patent Information
Search Interface
for Consultants
4)
IP Awareness and Enforcement:
Modular Based Actions for SMEs
Project co-financed by the European Commission
Hubert Rothe, Head of Division,
Information Services for the Public,
German Patent and Trade Mark Office, Munich
WIPO 6th Annual Forum on IP and SMEs,
Cardiff, 10 – 11 September 2008
Background
• Network of NPOs in Europe founded in 2005,
supported by European Commission, DG Enterprise
– Creation of the Innovaccess.eu website,
based on previous EU projects
– Presentation of the network by M. Philippe Cadre at the WIPO Forum
2006 in Geneva
• Termination of the IPR Helpdesk project (coordinated by
University of Alicante) at the end of 2007
• Call “IP Awareness and Enforcement Project (including IPR
Helpdesk)“ published by DG Enterprise in April 2007, based
on the CIP Programme
• 19 NPOs, University of Alicante and 6 other institutions filed
a common proposal in June 2007
• EC accepted the proposal in October 2007
• Project contract concluded with the EC on 31 October 2007
• Commencement of the project on 1 November 2007
IP Awareness and Enforcement:
Modular Based Action for SMEs
•
•
•
•
Duration:
Budget:
Coordinator:
Partners:
Nov. 2007 - Oct. 2010
7.9 M€
University of Alicante (ES)
19 NPOs
5 research institutions
1 trade organisation (EURATEX)
1 innovation agency (Luxinno)
Project objectives
• To significantly raise SMEs’ interest and knowledge about
Intellectual Property (IP) issues;
• To raise SMEs’ understanding of the need to integrate IP
in their innovation strategies and their business
planning;
• To improve the protection of SMEs’ IP rights through the
increased registration of rights EU-wide and also
internationally and increase the use of non-registered
protection methods through the effective promotion of
these methods;
• To improve protection and enforcement by SMEs of their
IP rights from infringement whether this originates from
within or outside the EU;
• To raise SMEs ability to fight counterfeiting and increase
knowledge on the methodologies available to detect it
Project objectives (continued)
• To develop actions to promote awareness on IPR protection
to educate the fashion and design industries (textiles,
leather, footwear and furniture) on the risks counterfeiting
poses and on the existing means and procedures to combat
it;
• To promote and support the use of IP rights in international
research, development and technology transfer activities,
providing an IP rights support service to actual and
potential beneficiaries of CIP and Research Framework
Programme actions, especially high-tech SMEs and Public
Research Organisations.
Modules and Target Audiences
Module 0 – Horizontal Work Packages
• WP1. Developing the Knowledge Base (DK)
• WP2. Developing the IPR Toolbox
(IT)
• WP3. IT Support
(UA)
• WP4. Communications and Marketing (GB)
• WP5. Cooperation with other actors
(SE)
• WP6. Project Management
(UA)
• Target audience
• All project partners
• External partners and stakeholders (WP5)
Modules and Target Audiences
Module 1
• WP7.
• WP8.
•
•
•
•
•
Setting up a user-friendly website for IPR support for European SMEs (FR)
Setting up local Helpdesks for IPR and
enforcement support for European SMEs
(DE)
WP9. Planning local actions for Awareness and Enforcement Services
(HU)
WP10. IPR Enforcement Support Services
(DK)
WP11 Delivering awareness and enforcement actions directly to SMEs (CRPHT)
WP12 Delivering Awareness and Enforcement Actions
for SMEs Support Services
(IEEPI)
Target audience
• Innovative and high-tech SMEs
• SME support services, innovation support actors and networks,
e.g. Chambers of Commerce
• IPR enforcement agencies
Modules and Target Audiences
Module 2
(University of Alicante)
• WP13. Sectoral Handbook(s) Production and Dissemination
• Target audience
• Enterprises (especially SMEs) of the fashion and design industries
(textiles, leather, footwear and furniture)
from target countries
• Sectoral associations
• Chambers of commerce,
regional development agencies, etc.
Modules and Target Audiences
Module 3
(University of Alicante)
• WP14. IPR-Helpdesk Website Content Generation and Info-Service
• WP15. Helpline for participants in EU-funded Research and Innovation
projects
• Target audience
• Current and potential participants, e.g.
• SMEs,
• universities and
• research organisations,
in CIP and RTD Framework Programmes of the European Commission
Expected Results
• Establishment of a cost-efficient and useful
trans-national website including an extranet
network of European helpdesks
• Development of new IPR enforcement support
services
• Implementation of at least 2 new sustainable
services on IPR and enforcement issues per
country according to the needs of the SMEs and to
the national IP policy
• Stronger and sustainable relations between each
NPO and the local intermediaries at national level
Project Structure
European Commission
DG Enterprise
Advisory
Board
(external
parties)
Scientific Coordination
Committee
(10 consortium members: NPOs of
DE, DK, FR, GB, HU, IT and SE,
University of Alicante (ES),
CRPHT (LU), IEEPI (FR))
Management Board
All 26 consortium members
Administrative
Coordination
(University of
Alicante)
SPANISH PATENT AND TRADEMARK OFFICE
IP PLAN TO SUPPORT SMEs
AIM
The aim of this Plan is that
Spanish SMEs become aware
of IP, in order to include it as a
tool in the management of the
innovation and business
processes.
WHAT IS THE IP SUPPORT PLAN FOR SMEs
The IP Support Plan consist on implementing a set of
measures based on:
1. Information: the SPTO must offer to SMEs an
information of quality tailored to their needs
2. Visibility: greater knowledge of the SPTO, its
activities and services
3. Cooperation:
implementing
the
actions
in
collaboration mainly with Regional PATLIB Centres of
Autonomous Communities and other national and
international institutions involved with SMEs
4. Simplicity and proximity: the final result of the
actions must contribute to a perception of IP as a
simple and easy tool
WHY AN IP SUPPORT PLAN FOR SMEs
SMEs account for more than 90% of all
Spanish enterprises among them, the SPTO
must be a visible and present organism.
In addition it is necessary to consider that
great companies already have a great
knowledge of IPR and make use of them,
through national and international systems.
The SPTO must direct its efforts to spread
the IP system between the SMEs,
traditionally nonusers.
TARGET GROUPS OF THE PLAN
 SMEs
 Entrepreneurs
 Technological Centers and Parks
 Intermediaries, that optimize and
multiply the actions adopted by the
SPTO
HOW IS THE PLAN CARRIED OUT :
To carry out the Plan, the SPTO
will adopt the following actions:
1
ACTIONS:
 Create an internal center specialized on SMEs
which will coordinate all the actions
 Create a SMEs microsite in the SPTO Web
 Create an external center
enterprises on trademarks
to
support
 Integrate the electronic trademark application
on enterprises networks and on One-StopShop for Entrepreneurs
ACTIONS:
2
 Strengthen the collaboration with other
institutions related with SMEs
 Create or improve the following tools:
 Patents:
 Subsidies
 Reduction
of
public
prices
(technological information reports)
 SMEs Patent brochure: adaptation of
SMEs WIPO brochure to the Spanish
Legislation
 Program of Visits to companies
ACTIONS:
3
 Trademarks
 Reduction of Trademark searches fee
 Massive distribution of specific trademark
leaflets
 Launch of the new service: Community
Trademarks applications surveillance
 Trademark Dissemination Programme for
SMEs in collaboration with Chambers of
Commerce and enterprise associations
 Industrial Property
 SPTO Presence on SMEs Forums
 Periodical workshops
 Dissemination Seminars (in collaboration
with Autonomous Communities and other
intermediaries)
ANNEX
INTERMEDIARY ELEMENTS
Intermediary
elements
 Chambers of Commerce, Enterprise
associations
 Foundations rooted in the business
world (pharmaceutical, technological
innovation, design…)
 Association of Science and
Techonology Parks of Spain,
Association of Innovation and
technology entities of Spain
Seminars,
News in their Bulletins,
Links in their webs
Search of new clients
 Administrative Bodies related with
SMEs
 Autonomous Communities: Patlib
Centres
Integrate IP on their
dissemination and formation
programmes
Integrate TM applications
and IP information on OneStop-Shop for
Entrepreneurs
Targeted SME Support
West Midlands IP Forum – Fillip
• Funded by the RDA – Advantage West Midlands
• Managed by Coventry University Enterprises Ltd
• Remit
– To raise awareness of IP
– To form a Forum of IP Professionals in the West
Midlands to provide businesses with a one stop
shop for IP
– To establish a website for IP Resources
– Managed Grant Funding for IP related work
Achievements
In the West Midlands, Fillip has:
•
•
•
•
Engaged with 327 individuals
Engaged with 305 businesses
Held 12 events
Managed a competition to win IP funding; providing
£149,500 of funding to small and medium sized
businesses
• Established 1999
• Funded by The Scottish Government
• Impartial
• Non-commercial
• Confidential
• FREE
• Not a funding programme
• Does NOT do work of Patent Attorneys or other
Professionals
Invention
nnovators
Innovation
ounselling
dvisory
ervice
cotland
• Established 1999
• Funded by The Scottish Government
• Impartial
• Non-commercial
• Confidential
• FREE
• Not a funding programme
• Does NOT do work of Patent Attorneys
or other Professionals
What is ICASS?
“Service that facilitates, the protection, development
and commercialisation of innovative ideas
originating in Scotland”
Early
stage
Interventi
on
One to one
What does ICASS do?
Advice
Counselling
• Intellectual Property
• Talking through ideas
• Product development
• Asking basic questions
• Establishing IPR
• Putting ideas in context
• Commercialisation issues
• How to Protect IP
• Investigating originality
• Confidentiality
• Licensing
Signposting
IP Support for SMEs &
Individuals in Wales
• Advice
• Working with UK IPO
• Financial
IP Advice for SMEs & Individuals
• Innovation Managers (IM)
– Support for SMEs
– Established in 1996 with a network of advisers
• Wales Innovators Network (WIN)
–
–
–
–
Unique support scheme for lone innovators/inventors
Established in 2002 with dedicated advisers
2004 number of advisers doubled
Award winning
Supporting Welsh IP:
Wales Innovators
Background
Network (WIN)
● Award-winning Welsh Assembly Government
Initiative - part of Technology & Innovation
team
● Helping individual innovators to progress their
ideas
● Support with IP, market research, prototyping,
testing, manufacture, commercialisation
● Structured Development Plan
Innovation
Manager Team
Supporting Welsh
IP:
●Background
Science / Technology background, several PhD level
●
Sector expertise (e.g. Geoscience, Optoelectronics,
Electrochemistry, Composites, Semiconductors…)
●
Private sector experience
●
Part of Welsh Assembly Government business support
team
●
12 focus on Welsh SMEs; 3 focus on individual
innovators (WIN)
●
IP Accreditation from UK IPO / Coventry University
●
Help with funding, testing, academic expertise,
collaborative partners, basic understanding of IP system,
introduction to esp@cenet searching, signposting &
funding to access professional help
Geography of IP Support
Bangor 
St Asaph 
15 IMs - Professionally qualified with
industrial experience including 1
chartered patent attorney.
Project Manager
Ex UK patent examiner
Newtown 
Carmarthen 
Pembroke 
UK IPO
IP Training for Advisors
IP Health Checks Pilot
Brecon 
Swansea 
IP Wales
Treforest 
 Newport UK IPO
 Cardiff WAG
IP Training for Innovation Managers
• Past
– 1 day awareness course
– Patent Searching
• Current/Future
– IP Master Class
– Licensing
– IP Valuation
Future IP Services
• IP Health Checks
• Funding Support for IP Professionals
– Accredited list of providers
– Patents - €4,400
– Trade Marks - €2,200
– Registered Designs - €2,200
– License Agreements - €3,600
• IP Commercialisation
Presentation of CERT-TTT-M
WIPI Annual Forum 2008– Cardiff
The “European Institute for Enterprise
and Intellectual Property”
• Created in 2004 by the French Ministry of Industry and
INPI (French NPO) in order to provide training
sessions on the economic and strategic issues of
intellectual property (IP).
• Promote "intellectual property awareness" within
companies, focusing on SME / SMI.
• Develops and organizes training sessions on the
offensive aspects of IP and innovation
• Is implicated in different European projects aiming at
the development of IP awareness toward SMEs.
CERT-TTT-M…
• means Certified Transnational Technology
Transfer Manager
• project within the FP6 programme of the EU
• Based on key assumptions of European IPR
experts :
– Lack of TT skilled people
– No registered TT profession
– No TT education / training programme
recognised all over Europe
2
CERT-TTT-M…
…addresses to the findings of CREST IPR expert
group
• Lack of holistic/integrated TT education programs
• Lack of trans-national/international attitude of
education
• No sufficient assessment of TT-skills possible
(comparable)
• No clear TT career structure / no accreditation for TT
professionals
• No sufficient benchmarks on education TT
programmes in EU-27 (comparable)
3
CERT-TTM…
To build up a blue-print education programme
that possibly :
• Professionalizes TT on a trans-national level
• Covers all phases of the TT process
• Meets the need for an official recognized course
• Supports MS policy-makers
• Standardizes the skill-set of TT profession in Europe
• Is based on surveys on demand and supply
4
CERT-TTT-M at a glance
• 11 partners of 7 Member States, 5
PROs, 7 policy makers (also CREST
participants)
• Advisory Panel: IPR/TT relevant
organisations
• Budget: € 1,3 Mio.
• 6 workpackages
• Duration: 24 months (2007-2008)
5
CERT-TTT-M Partner
11 Participants from 7 Countries
Austria: AWS – MCI
Belgium / Flanders: IWT
France: IEEPI – MESR
Italy: ASTER – ERPDA
Latvia: LIDA
Netherlands: EZ – RSM
Sweden: VINNOVA
6
Spotlight is on knowledge
in today’s economy
• Knowledge, Weightless, Information, Digital
or Service Economy
• Factors of production: Land, Labor, Capital,
Intangibles (Knowledge)
• Knowledge as useful Information (or
Service)
• Information as a “Public Good”
• Information as Property
Market-oriented Economy
• Playing Field: Unfair competition; free riding
• National Legal Systems: Diversity
(bilateral/regional/ international treaties or
agreements)
• Adding Value : Meeting or exceeding market
needs or expectations
• Market research: Consumers’ needs, competing
products or substitutes, gaps
• Technological innovation as an element of
marketing
Performance Gap
Time
Customer Expectation Dilemma
The challenge of adding value in
today’s economy
• Raw materials/Inputs: Processing (Value addition) = Value
added output/component; product; sale; Profit
• Value addition: Cheaper, Faster, Better:
Functional/technological or aesthetic/non-technological;
Rational/Emotional (More for Less)
• Price; access/availability; consistency
• Individual, Enterprise (legal person), Chains, Networks;
consortia; Open Innovation (Industry-GovernmentAcademia)
• Ownership vs. access to knowledge
• Value Addition, Value Delivery and Value Extraction
Levels of Product
Augmented
Product
Installation
Packaging
Brand
Name
Delivery
& Credit
Quality
Level
Core
Benefit
or
Service
Features
AfterSale
Service
Design
Warranty
Actual
Product
Core
Product
Tangibility Spectrum
Salt
 Soft Drinks
 Detergents
 Automobiles
 CosmeticsFast-food
 Outlets

Tangible
Dominant

Intangible
Dominant

Fast-food
Outlets
Advertising
Agencies
Airlines
Investment
Management
Consulting
Teaching




Customer experience as viewed
through our customers eyes
Right First Time
Fulfilling or exceeding customer
expectations, perfectly
Cycle Time
The elapsed time between the start and
end of any customer experience
New Product Development
All businesses must do this or eventually
die.
…use the firm’s resources to meet objectives
in an ever changing environment.
Acquisition versus Innovation
risk versus reward tradeoff
The Need for Innovation
• Commodity businesses compete on price
• Advantage goes to the low cost producer
– Perhaps due to lower labor costs, materials
costs, or a superior process
• The only way to avoid commoditization is
innovation
– Products
– Processes
– Value-added via integration or services
What is Innovation?
• Innovation is the process and outcome of
creating something new, which is also of value.
• Innovation involves the whole process from
opportunity identification, ideation or invention to
development, prototyping, production marketing
and sales, while entrepreneurship only needs
to involve commercialization (Schumpeter).
What is Innovation?
• Today it is said to involve the capacity to
quickly adapt by adopting new innovations
(products, processes, strategies,
organization, etc)
• Also, traditionally the focus has been on new
products or processes, but recently new
business models have come into focus, i.e.
the way a firm delivers value and secures
profits.
What is Innovation?
• Schumpeter argued that innovation
comes about through new
combinations made by an
entrepreneur, resulting in
– a new product,
– a new process,
– opening of new market,
– new way of organizing the business
– new sources of supply
Dimensions of Innovation
There are several types of innovation
– Process, product/service, strategy,
which can vary in degree of newness:
– Incremental to radical,
and impact:
continuous to discontinuous
Drivers for Innovation
– Financial pressures to reduce costs, increase efficiency, do
more with less, etc
– Increased competition
– Shorter product life cycles
– Value migration
– Stricter regulation
– Industry and community needs for sustainable development
– Increased demend for accountability
– Demographic, social and maket changes
– Rising customer expectations regarding service and quality
– Changing economy
– Greater availability of potentially useful technologies coupled
with a need to exceed the competition in these technologies
New Conditions for Innovation
• Small start-up entrepreneurs increasingly
depend on large firms:
– as suppliers or customers
– for venture finance,
– for exit opportunites,
– for knowledge (production, markets and
R&D)
– and for opening new markets.
New Conditions for Innovation
• Large firms increasingly depend on
small start-ups
– for NPD,
– as suppliers of new knowledge (which they
cannot develop themselves),
– or organizational renewal, for
experimentation with busienss models,
– for opening new markets, etc
New Product Development
Acquisition versus Innovation
corporate acquisition
buy the company
rapid entry, total control
invites antitrust attention, threat of divestiture
patent acquisition
buy the patent
avoids antitrust problems
does not give total control
New Product Development
Acquisition versus Innovation (cont.)
license the patent
…rent it
minimum investment, fast introduction, fast income
fast competition, lack of control, less reward
innovation
…develop new products internally
maximize long term profit, gain technological leadership
no legal problems...
New Product Development
Why is this so difficult?
Shortage of fundamentally new solutions to old problems
Fragmented markets due to increased competition,
decreased reaction time
Increase in social and government constraints
Cost
New Product Development
New Product Adoption Process
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Area under curve sums horizontally to form first three stages
of the product life cycle.
New Product Development
New Product Adoption Process is also known as
the diffusion process.
Each successive set of consumers behaves
differently.
Rate of Adoption is a function of:
relative advantage, compatibility, complexity,
availability of trial, observability
Risk Management in New Product Development
Why research and
analysis before new
product development
New product have a very high failure rates.
Products fail, not because of technical
shortcomings, but due to absence of
market.
Over 60% of new product fail before entering
the market, and out of the remaining 40% that
do see the ray of light, 40% fail to yield profit
and are withdrawn from the market.
Timely and reliable knowledge about
customer preferences is most important.
Such data is obtained from business
research.
New product development is linked with very
limited historical or preliminary data.
Hence, risky
Risk can be in form of market, technical, or
organizational issues. Risk analysis solves
the problem through flexible modeling,
primary and secondary research.
A good strategy is a must for evaluating
and dealing with the associated and
unavoidable risks.
Research conducted to understand
customer needs and develop a new product
is different from research required to launch
a new product.
Product development research is focused on
needs of customers while launch
research focuses on understanding the
motivation and attitudes of early adopters.
Successful targeting of early adopters
builds the fountain for new product success.
Success Rate of Entirely New Products
3000 raw
ideas
.03%
1.7 launches
60%
300 submitted
ideas
.3%
4 major
developments
25%
1 commercial
success
Stevens and Burley,
RTM May-June 1997
125 beginning
projects
.8%
9 large
developments
11%
THE PRODUCT LIFE CYCLE
• A reminder that
most products
do not live for
ever
• A conceptual
framework only
• Difficult to
measure where
a product is in
its life cycle
The chances for failure are greatest
when you know the least about the
technology being developed and/or
the target market
The “Familiarity Matrix” allows mapping of
R&D projects based on the extent of knowledge
about technologies and markets
Edward B. Roberts and Charles A. Berry, “Entering New Businesses:
Selecting Strategies for Success” Sloan Management Review, Spring 1985
pp 3-17
New, familiar New , unfamiliar
Familiar
Decreasing knowledge of the market
Familiarity Matrix: A Guide
Place Your Project in One of the Nine Boxes
Familiar
New , familiar
New , unfamiliar
Decreasing knowledge of the technology
Decreasing knowledge of the market
Familiarity Matrix: A Guide
Place Your Project in One of the Nine Boxes
Market
Business New Business
Model
Expansion Expansion
Market
Extension
Business
Extension
Business
Expansion
Market
Product
Penetration Extension
Product
Expansion
Decreasing knowledge of the technology
Familiarity Matrix: A Guide
Place Your Project in One of the Nine Boxes
Probability of Success
New Product with
unrelated technology in
existing market: 50%
Market
Business New Business
Model
Expansion Expansion
Market
Extension
Business
Extension
Business
Expansion
Market
Product
Penetration Extension
Product
Expansion
Familiarity Matrix: A Guide
Place Your Project in One of the Nine Boxes
Market
Business New Business
Model
Expansion Expansion
Probability of Success
Existing product in a new
market: 15%
Market
Extension
Business
Extension
Business
Expansion
Market
Product
Penetration Extension
Product
Expansion
Familiarity Matrix: A Guide
Place Your Project in One of the Nine Boxes
Probability of
Success
Improved product in
existing market: 75%
“Suicide Square”
.03%
Market
Business New Business
Expansion Expansion
Model
Market
Extension
Business
Extension
Business
Expansion
Market
Product
Penetration Extension
Product
Expansion
Familiarity Matrix: A Guide
Place Your Project in One of the Nine Boxes
Market
Business New Business
Model
Expansion Expansion
Probability of
Success
New Product in a New
Market: 5%
Business
Extension
Business
Expansion
Market
Product
Penetration Extension
Product
Expansion
Market
Extension
Profitability
Different types of Innovation give
greater profitability at different points
in the life cycle of a product family
New product
invention,
tailoring, and
development
Process Marketing
Application
InnovationInnovation Business
Innovation
Model
Structural
Innovation Innovation
Disruptive Product
Innovation Innovation
Time
Geoffrey A. Moore “Darwin and the Demon: Innovating Within
Established Enterprises” HBR July-August 2004 pp.87-92
Different Types of Innovation
• Disruptive Innovation – an
invention that can displace the
present market leader or create
an entirely new market
DuPont Diamond Award Winners 2002
Tetra Pak, Inc., Sweden / USA
Nestlé Purina PetCare, Italy
First Retortable Carton System for
Nestlé Dog Food.
This represents the first retortable
carton packaging system on the
market.
Different Types of Innovation
• Application Innovation: Takes existing
technologies into new markets to serve
new purposes
Different Types of Innovation
• Product Innovation: Takes an
established product to the next level –
reduced cost, improved quality, greater
functionality
Different Types of Innovation
• Process Innovation: Makes processes
for established products in established
markets more effective and more
efficient
Different Types of Innovation
• Experiential Innovation: Makes some
superficial changes in the product that
improve the customer’s experience with the
product – adding delight, greater satisfaction,
or reassurance
Different Types of Innovation
• Marketing Innovation:
Improves the interaction
with customers
Different Types of Innovation
• Business Model Innovation: Reframes
the role of the company in the value chain
or the way in which the company meets
customer needs
Different Types of Innovation
• Structural Innovation: Capitalizes on
disruption and changes in the industry to
restructure industry relationships
A company cannot rest on its laurels; many
product class winners have fallen victim to
their success
US Steel (steel)
ICI (chemicals)
Kodak (photography)
Goodyear (tires)
Polaroid (instant photography)
Zenith (TVs)
IBM (PCs)
Smith-Corona (typewriters)
Decreasing knowledge of the market
Familiarity Matrix: Optimum Strategies for
Technological Innovation: Finding others who
know more about the markets or the technology
Venture
Capital or
Educational
Acquisition
Venture capital,
or Educational
Acquisition, or
University
Relationship
Internal
Development,
Acquisition,
or Joint
Venture
Internal
Venture or
Acquisition
or License
Venture
Capital or
Educational
Acquisition
Internal
Development
Internal
project, or
Acquisition,
or License
Joint Venture,
Strategic
Alliance or
University
Relationship
Joint
Venture
Decreasing knowledge of the technology
New developments in innovation
raises new issues and problems
• Greater emphasis on commercializing scientific
discoveries, particularly in IT and the bio-sciences
• Speed and potential value of scientific progress leads
to emphasis on solid and well-designed portfolios
of research projects
• Universites as active drivers of innovation: Academic
entrepreneurship and the entrepreneurial university
• University-industry partnerships
• Increased search for radical innovation and top-line
growth.
Complementary Resources
Manufacturing Distribution
Finance
Core
technological
know-how
Service
Complementary
technologies
Marketing
Other
Other
Bargaining power of owners of complementary
resources depends upon whether complementary
resources are generic or specialized.
The eleven modes of cooperation
agreements: illustration of their anchor points
Common
Research
Research
contract
Ways
of...
Engineering
contract
Common
purchase Subcontracting
supplying
designing
Trademark
licence
Patent
Consortium Distribution
licence
(common agreements
marketing)
Common
production
producing
Source: S. Urban, S. Vendemini, CESAG, Strasbourg
marketing delivering
Know-how transfer
contract
Cooperations modes and value chain
Link of
the
chain
R&D
• Exchanges of
existing
knowledge
Cooperation
modes
• Organisation
of a common
research
• Setting up of
a common
project
(design,
engineering)
Logistic
supply
• Common
purchases
Production
Marketing
Distribution
• Subcontracting
agreements
• Trademark
licence
• Reciprocal
distribution
agreements
(access to
existing
distribution
networks)
• Access to the • Common
specific
manufacturing
resources of
agreements
the country
(raw
• Implementatio
materials,
n of
subventions,
engineering
capital cost,
contracts
compared
advantages) • Patent license
• Production
consortium
Source: S. Urban, S. Vendemini, CESAG, Strasbourg
• Consortium
(common
marketing)
• Joint
advertising
Services
• After sale
• Lobbying
• Relations
New Business Models Emerge
Then…
Now…
CRO’s
Product
Development
Product
Development
Cycle
Tool
Companies
One Integrated
Company
CRM’s
Testing
Services
Many Distributed
Companies
New Regional Model Emerge
Then…
Now…
Region D
Region A
Region B
Manufacturing
Region C
Research
Trials/Testing
Services
Development
Self-contained
regional clusters
Region G
Region E
Region F
Specialized,
networked regions
Commercialization Model
• Strategic Investment is the Foundation of a
Successful Commercialization Model
‘Opening up’ of industrial research process
Worldwide search and
Value creation:
evaluation of technology
products,
and knowledge
processes etc
‘Open innovation’
Research Campus, with
•Venturing
•‘Incubator’
•Technology transfer and support, …
Public-private
partnership
“Exploring wider range of
knowledge areas”
Developing
technological core
competences
within the
company X
“More focus and resources for
firm’s own competences”
R&D Lab of company X
Joint ventures
Creating more value faster
Gilead
Sciences
Hepsera
out-license
GlaxoSmith
Kline
Institute for Medical
Research
Gateway Fund
Vistide outlicense
(joint venture)
Pfizer
Founders
came out
macrolide of Pfizer
templates
Biotica
Cambridge
Biotechnology
(funding)
Northern Venture
Managers
(funding)
Daniolabs
Cambridge
University
Challenge Fund
Babraham Bioscience Inst
Technologies Ltd
Babraham Bioincubator
Addenbrooke’s
Hospital
Neurodegeneration
Consortium
Wellcome Trust
Lorantis
(funding)
Genzyme
Domantis
partnership
Babraham Technix
Cambridge
Crytallographic Data
Centre
(Cambridge University)
Astex
antibodies
license
Cambridge Antibody
Technology
Eli Lilly
virtual screening
collaboration
validation
Wyeth
Abbott
arthritis
collaboration
licensing
Amgen
licensing
(Cambridge
University
administered)
AstraZeneca
The New Paradigm for Innovation
“Open innovation…assumes that firms
can and should use external ideas as
well as internal ideas, and internal and
external paths to market, as they look
to advance their technology.”
Henry Chesbrough, Open Innovation:
Researching a New Paradigm
The Key is Collaboration
“Few if any companies today can hold all the pieces
of their own product technology…they simply must
collaborate with others if they want to survive and
prosper…IP has become much more of a bridge
to collaboration”
Marshall Phelps, Microsoft
Open Innovation – buying in ideas or
products to add to your model
Revenues
Sell Divest
Market
Revenues
New Revenue
Sources
Shorter Product
Life Cycle
License
Market
Revenues
Market
Revenues
Internal
Development
Golden Past
Internal &
External
Shared
Development
Internal
Development
Increasing
costs
Costs
Spin off
Decreasing
costs
Past Present
Present Future
Chesbrough, Sloan Management Review (2003)
‘Closed innovation single track’
1
2
“Ideas &
3
“Current Market Place”
Investigations”
4
5
Research
Development
Commercialisation
Based upon ‘Open Innovation: Researching a New Paradigm’
(2006) Henry Chesbrough, Wim Vanhaverbeke & Joel West
‘Open innovation three lane highway’
“External Ideas &
Investigations”
“External Technologies
1
Insourcing gate
2
“Ideas & 3
Investigations”
“Current Market Place”
Technology
spin-offs
4
licensing
“New Market Place”
“Other firm’s Market Place”
5
Research
Development
Commercialisation
Based upon ‘Open Innovation: Researching a New Paradigm’
(2006) Henry Chesbrough, Wim Vanhaverbeke & Joel West
IP model enabling “Open Innovation”
• R&D on generic technologies
• Industry value chains brought together
• Partners collaborate and contribute ideas
A Network View of Innovation
Depending on a firm’s strengths, different
firms play different roles in open
innovation value chain
• Some firms generate innovations
• Some integrate the innovations of others
• Some have a fully integrated model
An open innovation system is a networked
system
From a network IN an organization ….
To the network IS the organization
Hierarchy
Matrix
Network
TYPES OF NETWORKS
•
•
Task Networks: involve the exchange of specific job-related resources
including information, expertise, professional advice, political access,
and material resources.
Social Networks: involve relationships characterized by higher levels of
closeness and trust than those that are exclusively task-related. They
usually consist of people who share a common background or interest.
Since people have more leeway in choosing their friends than their coworkers, these networks tend to be less closely determined by formal
organizational arrangements and work assignments. Social networks,
however, often play a critical role in mobilizing resources, transmitting
information, and providing peer coaching.
Innovation Networks must combine both!
Thanks to H. Ibarra
TYPES OF RELATIONSHIPS
•
•
•
•
It is important to cultivate a broad range of network relationships!
Long-term, high reciprocity (Strong) ties: Close bonds and reciprocal
relationships ensure reliability under conditions of uncertainty. These
include peer alliances that function by exchange of favors, ties of trust
and loyalty between superiors and subordinates, and career development
ties between mentors and proteges.
Short-term, instrumental ties: Many important ties such as highly
circumscribed job-related connections, are often dissolved when the
relationship has served its purpose. Some are with individuals the
manager may not even like, but must interact with to get things done.
Distant Acquaintances (Weak ties): These types of relationships are
important because they function as bridges between the manager and
distant social or organizational groups. As a result, they are often
sources of unique or novel pieces of information. A networking strategy
that does not take these into account leaves a manager open to the risk of
developing an inbred network that will not provide information on
external opportunities or threats.
Raufoss – Light Metal Industry
• From an integrated and closed corporation to
dynamic cluster
– RA (Raufoss Ammunition Company) 1897
– Gradual growth of civil production in light metal
– Gradual growth of global customers (automotive)
• From national customers to global customer
• From closed innovation to open innovation
• Challenges for relations and
communications
From RA via Industrial Park to a
Dynamic Cluster ?
Phase 1
Phase 2
Phase 3
1896-1997
1997-2003
2004-
Raufoss
RA
HARA
HARA
Nammo
Nammo
Reintegration ?
Fission
Integrated company
Fragmentation
Dynamic cluster?
Technology - Aircraft
• Boeing Co - The first mass
jetliner - the 707.
• 98% made in the US 1950’s 60’s. 20th c.
• The 787 - Dreamliner - 21st c.
• 70% outsourced to 900
contractors
• Half made by contractors outside
the US - primarily Japan and
Italy but also China (rudder).
• Boeing does the final assembly.
• Boeing maintains the overall IP –
it’s their innovation.
– Without Open Innovation and
strong IP the above process
could not happen.
 Boeing Co.
Boeing - the platform Co.
Some cross-sector ‘platform’ candidate innovation
biographies in firms & regions arising from WP3
Revitalise FoodRiver Tourism
(e.g. Douro)
Bioengineering
Functional
Foods
Vehicle Processing
Systems
Biofuels
Food Biocluster
Knowledge
Intermediaries
Bio-imaging
Food
Biotechnology
ICT
New Media
KIBS
Automotive
Tourism
Wine
Tourism
Culinary
Tourism
DANFORS
Guidance Systems
Oenotechnology
Branding
Firm Level Innovation Biographies
EURODITE, Toulouse Targets for Innovation Investigation
 Research in Aquitaine, France integrates the wine industry and biotechnology
to develop the new field of Oenotechnology
 In Emilia-Romagna, Italy meat industry the Food and ICT industries have
collaborated to produce Biosensors for testing the maturity of Parma ham
 The German automotive industry is actively engaged in innovative activity
with a number of farms and agricultural research institutes in Brandenburg to
develop Biofuels
 In Bavaria, bioscientific knowledge on milk-based Lactobacteria are the
subject of research collaborations with the brewing and fermentation industries
 In Bornholm and North Jutland, Denmark the Agro-Food and Tourism
industries are collaborating on innovatory Culinary Tourism activities also
involving the delineation of Food Cultures involving anthropological research
 Innovation research in Midi-Pyrénées, France focuses on specialised tourismbased vehicle guidance systems integrating knowledge from Aerospace,
Automotives and ICT with that from Tourism, Agro-food and Bioscience
 In Hordaland (Bergen), Norway Tourism demand to experience Aquaculture
processes in organic fish farms has led to interactions between the Agro-Food
industry, New Media, ICT and Knowledge-Intensive Services to realise a
network facility
 In Jura, Switzerland the traditional Watch-making industry is being
transformed into a Tourism asset by formation of Agro-Food, Tourism, ICT,
New Media and traditional fine-mechanics ‘experience economy’ networks
Strategic Entrepreneurship
and Innovation
• Entrepreneurship is concerned with:
– The discovery of profitable opportunities
– The exploitation of profitable opportunities
• Firms that encourage entrepreneurship are:
– Risk takers
– Committed to innovation
– Proactive in creating opportunities rather than
waiting to respond to opportunities created by
others
Understanding the Process of
Innovation
The Process/Steps of Innovation
Pre-IPO
$
Expansion
• Legal Entity
• Viable
• Market acceptance
• Heading to IPO or M&A
• High Growth
• Founders = Mgt Team
• Bright Idea
• Head Count
• Minimal Revenue
• Experimental
Start-Up
• Multiple Cycles
• Slow Growth
• Research
• Support Functions
• Business Plan
• Administration
Seed
• Proof of Concept
• Marketing
• Revenue Growth
Idea / Concept
Time
The Needs of Each Stage
$
•Recruitment
•Business
•Corporate and
Development
Secretarial
•A & P
•Financial
•Market Access
•Training
•PR and Marketing
•Networking
Expansion
•Business
•Business Plan
Development
•International support and
•Prototype/ POC
Mkt. Access
•Project Management
Start-Up
•Diversification strategies
•Business Premises
and support
•Project Management
•Recruitment
•Management Training
•Training and Incentives
Seed
Idea / Concept
Time
IP Management Needed in all stages
Understanding the business/role of IP
Patent
Manufacturing
Distribution
Sales
Brand
• Understand the value chain of the business and industry
• Understand how profits are generated
– primary product
– spare parts and related products
– service and maintenance
• What are the important features of the IP? How does it add
value to the business?
• What are the important features of the industry other than
IP?
– other important intangible and tangible assets in the value chain
– competitive structure of the industry
– customer characteristics and purchasing criteria
Entrepreneurship 1
Entrepreneurship drives innovation,
competitiveness, job creation and
economic growth.
It allows new/innovative ideas to turn
into successful ventures in high-tech
sectors and/or can unlock the personal
potential of disadvantaged people to
create jobs for themselves and find a
better place in society.
Entrepreneurship 2
Entrepreneurship, in small business
or large, focuses on "what may be" or
"what can be".
One is practicing entrepreneurship
by looking for what is needed, what is
missing, what is changing, and what
consumers will buy during the
coming years.
Entrepreneurship 3
Entrepreneurs have:
– A passion for what they do
– The creativity and ability to innovate
– A sense of independence and selfreliance
– (Usually) a high level of self confidence
– A willingness and capability (though not
necessarily capacity or preference) for
taking risks
Entrepreneurship 4
Entrepreneurs do not (usually) have:
– A tolerance for organizational
bureaucracies
– A penchant for following rules
– A structured approach to developing
and implementing ideas
– The foresight to plan a course of action
once the idea is implemented and
established
Entrepreneurial Success
1. People (Entrepreneur /Entrepreneurial
Team)
2. Opportunity (Marriage of Market and
Product/Service)
3. Access to Resources (Land. Labor,
Capital, Knowledge
And the fit amongst these three elements
(Business Model)
Entry Strategies
• New Business
– Develop a new product or service
– Develop a similar product or service
– Competitive approaches
• Existing Business
– Buying a business
– Franchise
– Joint venture – customer or supplier
“Competitive strategy is about being
different. It means deliberately choosing
to perform activities differently or to
perform different activities than rivals to
deliver a unique mix of value.”
Michael E. Porter
Competitive Advantage
An advantage over
competitors gained by
offering consumers
greater value than
competitors offer.
Competitive Strategies
• How does an organization improve their
competitive performance?
• Must establish a competitive advantage in 3
areas:
– Uniqueness: of resources & processes (Bill
Gates knowledge of IBM)
– Value: where products/services warrant a higherthan-average price or exceptionally low
– Difficult to imitate: when products/services are
hard to mimic or duplicate
Competitive Strategies
• Basic Competitive Strategies: Porter
– Overall cost leadership
• Lowest production and distribution costs
– Differentiation
• Creating a highly differentiated product line
and marketing program
– Focus
• Effort is focused on serving a few market
segments
Competitive Strategies
• Basic Competitive Strategies: Value Disciplines
– Operational excellence
• Superior value via price and convenience
– Customer intimacy
• Superior value by means of building strong
relationships with buyers and satisfying
needs
– Product leadership
• Superior value via product innovation
CORE COMPETENCES
Hammel and Prahalad
defined core competence
as a central value creating capability of an
organization/enterprise.
CORE COMPETENCES
• Core competences are activities or
processes that critically underpin an
organisation competitive advantage.
• They create and sustain the ability to
meet the critical success factors of
particular customer groups better than
providers in ways that are difficult to
imitate
CORE COMPETENCES
• Core competences are
distinctive capabilities that lead
a company to a competitive
advantage.
• Features of an enterprise that
cannot be readily reproduced by
a competitor.
CORE COMPETENCES
Core competences can vary
through the time depending on the
strategy adapted by the
companies and the identification
of the core competencies is the
first step for a company to decide
which business opportunities to
pursue.
The Five Generic Competitive Strategies
Relative costs and differentiation
Relative costs
High
High
Niche
Outstanding
success
Differentiation
Disaster
Low
Lowest
cost
Low
PRICING OBJECTIVES
CORPORATE
OBJECTIVES
ENVIRONMENTAL
ANALYSIS
PRICING
OBJECTIVES
PROFIT
ORIENTATED
VOLUME
ORIENTATED
COST
ORIENTATED
COMPETITION
ORIENTATED
PRICING STRATEGIES
• Segmented/Differential:
•random/periodic/second market
discounting
• Exploiting Competitive Position:
•price
signalling/penetration/experience
curve/geographic pricing
PRICING STRATEGIES
• Product Line Pricing:
•image pricing/price
bundling/premium
pricing/complementary pricing
• Dynamic Pricing Strategies:
•multi-tiered price or channel
pricing
Low-Cost Provider Strategies
Keys to Success
• Make achievement of meaningful lower
costs
than rivals the theme of firm’s strategy
• Include features and services in product
offering that buyers consider essential
• Find approaches to achieve a cost
advantage
Low-cost leadership means low overall costs, not
in ways
difficult
for rivals
copy orcosts!
match
just low
manufacturing
or to
production
Differentiation Strategies
Objective
• Incorporate differentiating features that cause
buyers to prefer firm’s product over brands of
rivals
Keys to Success
• Find ways to differentiate that create value for
buyers and are not easily matched or cheaply
copied by rivals
• Not spending more to achieve differentiation
than the price premium that can be charged
Where to Find Differentiation
Opportunities in the Value Chain
• Purchasing and procurement activities
• Product R&D and product design activities
• Production process / technology-related activities
• Manufacturing / production activities
• Distribution-related activities
• Marketing, sales, and customer service activities
Activities,
Costs, &
Margins of
Suppliers
Internally
Performed
Activities,
Costs, &
Margins
Activities, Costs,
& Margins of
Forward Channel
Allies &
Strategic Partners
Buyer/User
Value
Chains
How to Achieve a
Differentiation-Based Advantage
Approach 1
Incorporate product features/attributes that
lower buyer’s overall costs of using product
Approach 2
Incorporate features/attributes that raise the
performance a buyer gets out of the product
Approach 3
Incorporate features/attributes that enhance buyer
satisfaction in non-economic or intangible ways
Approach 4
Compete on the basis of superior capabilities
Types of Differentiation Themes
• Unique taste – Dr. Pepper
• Multiple features – Microsoft Windows and Office
• Wide selection and one-stop shopping – Home Depot,
Amazon.com
• Superior service -- FedEx, Ritz-Carlton
• Spare parts availability – Caterpillar
• Engineering design and performance – Mercedes, BMW
• Prestige – Rolex
• Product reliability – Johnson & Johnson
• Quality manufacture – Michelin, Toyota
• Technological leadership – 3M Corporation
• Top-of-line image – Ralph Lauren, Starbucks, Chanel
Sustaining Differentiation:
Keys to Competitive Advantage
• Most appealing approaches to differentiation
– Those hardest for rivals to match or imitate
– Those buyers will find most appealing
• Best choices to gain a longer-lasting, more profitable
competitive edge
– New product innovation
– Technical superiority
– Product quality and reliability
– Comprehensive customer service
– Unique competitive capabilities
Best-Cost Provider Strategies
• Combine a strategic emphasis on low-cost with a
strategic emphasis on differentiation
– Make an upscale product at a lower cost
– Give customers more value for the money
Objectives
• Deliver superior value by meeting or exceeding
buyer expectations on product attributes and
beating their price expectations
• Be the low-cost provider of a product with good-toexcellent product attributes, then use cost
advantage to under price comparable brands
Focus / Niche Strategies
• Involve concentrated attention on a narrow piece of
the total market
Objective
–
Serve niche buyers better than rivals
Keys to Success
• Choose a market niche where buyers have
distinctive preferences, special requirements, or
unique needs
• Develop unique capabilities to serve needs of
target buyer segment
Examples of Focus Strategies
• Animal Planet and History Channel
– Cable TV
• Google
– Internet search engines
• Porsche
– Sports cars
• Cannondale
– Top-of-the line mountain bikes
• Enterprise Rent-a-Car
– Provides rental cars to repair garage customers
• Bandag
– Specialist in truck tire recapping
Focus / Niche Strategies
and Competitive Advantage
Approach 1
• Achieve lower costs than rivals in
serving a well-defined buyer segment –
Focused low-cost strategy
Approach 2
• Offer a product appealing to unique
preferences of a well-defined buyer
segment – Focused differentiation
strategy
Which
hat is
unique?
An Aspect of Good Management
• People Management –
used by
because IP is generated by people and
people
• Knowledge Management – because a lot of knowledge is informal
and
may or may not crystallise as
recognisable category of IP
• IT Strategic Planning –
because a lot of IP is IT-related; some
of the more complex IP issues arise in
IT context
• Contract Management – because IP is often created (or improved)
in
context of a contract (eg,
supply
contract or
joint venture relationship)
• Asset Management –
it has
because IP is an asset, albeit intangible;
a value
• Risk Management –
organisation
in
because there are risks to an
flowing from its actions, or failure to act,
relation to IP (including risk of lost
opportunity)
Introduction to IP Management 1
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•
Legal
Technical
Business
Export
Financial
Relationships
•
•
•
•
•
•
Accounting
Tax
Insurance
Security
Automation
Personnel
Introduction to IP Management 2
•
•
•
•
•
•
•
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Trademarks (Brands)
Geographical Indications
Industrial Designs
Patents and Utility Models
Copyright and Related Rights
Trade Secrets
New Varieties of Plants
Unfair Competition
Bringing it All Together
Example No. 1
• Decades ago, Coca-Cola decided to
keep its soft drink formula a secret
• The formula is only know to a few
people within the company
• Kept in the vault of a bank in Atlanta
• Those who know the secret formula
have signed non-disclosure agreements
• It is rumored that they are not allowed to
travel together
• If it had patented its formula, the whole
world would be making Coca-Cola
Bringing it All Together
Example No. 2
• Patent for stud and tube
coupling system (the way
bricks hold together)
• But: Today the patents have
long expired and the company
tries hard to keep out
competitors by using designs,
trademarks and copyright
Bringing it All Together
Example No. 3
• Patent for the fountain pen
that could store ink
• Utility Model for the grip and
pipette for injection of ink
• Industrial Design: smart
design with the grip in the
shape of an arrow
• Trademark: provided on the
product and the packaging to
distinguish it from other pens
Source: Japanese Patent Office
Bringing it All Together
Example No. 4
® Registered Trade Mark
‘TM’ Unregistered
Registered Design
Copyright: Labels & Artwork
Patents: Several dozen!
Basic Message 1
IP adds value at every stage of the value
chain from creative/innovative idea to putting a
new, better, and cheaper, product/service on
the market:
Trademarks/ GIs
Ind. Designs/Patents/Copyright
Patents /
Utility Models/Trade secrets
Patents /
Utility models
Invention
Commercialization
Marketing
Financing
Literary / artistic
creation
Copyright/Related Rights
All IP Rights
Industrial Designs/
Trademarks/GIs
Product Design
Licensing
All IP Rights
Exporting
Basic Message 2
• IP Strategy should be an integral part of the
overall business strategy of an Enterprise
• The IP strategy of an Enterprise is influenced
by its creative/innovative capacity, financial
resources, field of technology, competitive
environment, etc.
• BUT: Ignoring the IP system altogether is in
itself an IP strategy, which may eventually
prove very costly or even fatal