Strategic & Innovation Management
Course Contents
● Lecture on Wednesday (4h)
● Assessements: Group assignment + presentation; Exam 31/10
● Debates (10% of final grade) the assignment (30% of final grade) and an individual exam
(60% of final grade). The exam is closed-book with open-ended questions about the
mandatory course literature. The exam will take place on-campus and will be done on a
compute.
Group activities:
● - Weekly debates on “Relying on external R&D for its innovation activities hampers a firm
own internal R&D capabilities (in favour)” (lecture 2)
● Essay: requirements on course manual
Deadlines:
, WEEK 36
Lecture 1
Introduction to Strategy & Innovation Management
Jitse Duijsters
This lecture discusses the course details, giving special attention to the requirements of the
assignment and how it will be evaluated. In addition, it will introduce the topic strategy and
innovation management. In particular, the importance of innovation to firms and to society
and the innovation processes that occur within firms will be discussed.
After a short introduction to the course we will have a guest speaker: Ronald Apeldoorn. He
will speak about the innovation processes at Avebe, an international Dutch starch
manufacturer located in the north of the Netherlands.
Mandatory Literature:
Course Manual: Strategy & Innovation Management
-Pisano, G. (2015) You Need an Innovation Strategy.
-Zollo, M., Minoja, M., & Coda, V. (2018) Toward an Integrated Theory of Strategy.
Pisano (2015, p. 2): “A strategy is (…) a commitment to a set of coherent, mutually
reinforcing policies or behaviors aimed at achieving a specific competitive goal.”
Innovation: “the implementation of a new or significantly improved product (good or
service), or process, a new marketing method, or a new organisational method in business
practices, workplace organisation or external relations” (OECD, 2005, p. 46).
Focus: How can we develop and implement a strategy that fosters innovation?
What is Strategic Management?
“The strategic management process is a sequential set of analyses and choices that can
increase the likelihood that a firm will choose a good strategy; that is a strategy that
generates competitive advantages” (Barney and Hesterly, 2012)
− Searching for new information and opportunities (Lecture 2), search for new ideas;
− Selecting opportunities and actions amidst uncertainty (Lecture 3) how to select right
project under uncertainty;
− Context of innovation (Lecture 4) how to adjust internal setting of an organization for
them to innovate;
− Implementing strategies and business models (Lectures 5, 6 and 7) structure of
companies and how to implement;
− Capturing this value (Course “Capturing Value from Innovation”, Semester 2.1)
, WEEK 37
Lecture 2
Search and Sources of Innovation
Jitse Duijsters
Today even the largest firms that invest heavily in R&D activities do not rely solely on internal
knowledge sources but also on knowledge that is developed outside their boundaries. This
lecture discusses the different knowledge sources that firms use in their innovation activities
and how this knowledge is incorporated effectively in new products and processes. Special
attention is given to the complementarity between internal and external knowledge, to the
concept of absorptive capacity and its role on this complementarity and to the role of users
as drivers and sources of innovation.
Mandatory Literature:
● Bradonjic, P., Franke, N., and Lüthje, C. (2019). Decision-makers’ Underestimation of User
Innovation.
● Grimpe, C., and Kaiser, H. (2010) Balancing Internal and External Knowledge
Acquisition: The Gains and Pains from R&D Outsourcing.
● Zahra, S., and George, G. (2002) Absorptive Capacity: A Review, Reconceptualization,
and Extension.
Search: finding sources of innovation
1. Sources of innovation: open innovation as a source of innovation
2. of sources: how do we find info to be able to innovate. focus on linked users, such as
customers (product improvement)
3. Collaboration with external sources
4. Absorptive Capaticity (ACAP)
In order to innovate, we first need to find the right information and opportunities (Lecture 2), and then
select the best ones, within received information (despite uncertainty in success rates) (Lecture 3)
1st paper: Bradonjic, P., Franke, N., and Lüthje, C. (2019). Decision-makers’ Underestimation of
User Innovation.
“A realistic perception of the sources of innovation is important as it constitutes the basis for
a rational allocation of resources and thus indirectly impacts the innovation performance of
companies and societies at large”. (Bradonjic, Franke, and Lüthje, 2019)
→ If you don’t have the right info, can’t do the best innovation.
, How do firm’s make innovations: closed innovation. Firm R&D department, finding and searches for
best ideas.
→ Advantages: close control and patent easily
→ Disadvantages: downside: smart people from other companies. Firm takes all the risks
Innovation funnel: research: a lot of projects, ideas in development: you take out the ones that
don’t work out, within company**
Closed Innovation: Advantages and Principles of a Closed Innovation System
o • The smart people in the field work for us.
o • To profit from R&D, we must discover it, develop it, and ship it ourselves.
o • If we discover it ourselves, we will get it to the market first.
o • The company that gets an innovation to the market first will win.
o • If we create the most and the best ideas in the industry, we will win.
o • We should control our IP, so that our competitors don't profit from our ideas.
