Le Petit

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15.351 Managing Innovation and Entrepreneurship

Spring 2008

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15. 351 Managing Innovation & Entrepreneurship

Fiona Murray MIT Sloan School of Management Spring 2008 Class Eighteen – R&D Portfolios

Module Three:

Exploiting innovations

Four Classes - insights into the most effective exploitation strategies & processes

Exploiting Innovations Key strategies & processes IP & Complementary Assets framework – commercialization strategies Le Petit Chef – portfolios & portfolio management processes Leveraging platforms – Electronic Arts & video gaming – Cyrus Beagly from McKinsey Leveraging portfolios – A123 – Ric Fulop, founder & VP Biz Dev

Interaction between Appropriability & Complementary Assets critical when determining who makes $ exploiting innovation

Controlling the Assets No, free or don’t yet exist Controlling the Ideas

Innovators can profit

Yes by powerful incumbents

Weak

Hard position for innovators to profit – need to move!

Strong

Innovators in strong position to profit

Innovators & Asset holders share profits

Effective Commercialization Strategy Depends on Assessing Two Key Questions

Do incumbents control assets that you need to create value from your innovation? How well do you control the ideas behind your innovation? No, free or don’t yet exist

Innovators can profit if they are fast or stealthy– otherwise risk “catch-up” e.g. Disney, fashion Profit opportunities but need to build a value chain – hard to do, need $$$ e.g. eInk, Nintendo

Yes by powerful incumbents

Ensure partners have a reputation & prove your value early e.g. A123, semiconductors Licensing, partnerships, key is where on value chain to contract e.g. biotech

Strong

Weak

Attackers’ Advantage

If there is weak IP protection, and there are relatively few or widespread CAs, then this is basically a...