INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Post Graduate Programme

Detailed Outline of the Course (Pages: 1-10)
Course Title

Strategic Management of Innovation

Instructor

Dr. Suram Balasubrahmanyam

Contact Details

Email: bala@iimk.ac.in; Phone: +91-495-2809120

Course credit

3.0 (30 Hours of Teaching)

Total No. of Sessions

15

Session Duration

2 Hours

Term

IV (June-August, 2015)

Year

PGP-II (Term-4) 2015-16

Max. No. of Students

120

Course Description
To develop an awareness of the range, scope, and complexity of the issues and problems
related to the strategic management of technology and innovation.
To develop an understanding of the "state of the art" of the strategic management of
technology and innovation.
To develop a conceptual framework for assessing and auditing the innovative capabilities
of a business organization.
Innovation is the lifeblood of winning organizations. As Indian technology firms move towards
positions of global market leadership, it becomes increasingly important for them to create
sustainable competitive advantage based on the creativity of their employees. They need to
ensure that there is structure in house that encourages a continuous process of intellectual
property rights generation.
It is often said that Indian technology firms need to migrate up the value chain. The relatively
low-end services model offered by IT service firms will need to be supplemented by products. In
terms of diversifying their portfolios, Indian firms will need to consider new product
development activity including intellectual property rights creation as part of their operational
strategies.

One of Indias core competencies is the development of intellectual property. Historically, India
has been the source of many revolutionary ideas and concepts. It is also universally
acknowledged that Indian technical and managerial brainpower is among the best in the world.
However, innovation and IPR generation have not been recognized as important elements in
company strategy in the recent past. This course considers a framework to create strategic
change through technological innovation and internal entrepreneurship.
It is necessary to forecast technology trends, anticipate customer needs, predict competitor
moves and strategies as well as environmental conditions and respond in flexible ways via midcourse corrections. Business plan generation and implementation is a combined product
management and engineering activity.
There are very good examples in technology areas where Indian firms have managed to make the
conceptual leap from follower to leader by investing in R&D. The most visible are the
pharmaceutical industry and the automotive components industry. In the face of intense global
competition, Indian firms in both these sectors have done remarkably well by leveraging Indian
skills in engineering, reverse engineering, and re engineering. In particular, the pharmaceutical
sector has remarkable for its rapid emergence as an IPR generation machine.
Thus there is a need for a strategic re-evaluation of what Indian knowledge-industry firms need
to do. In addition to creating a strategy, it is important to translate it into an implementation
framework and methodology on the ground that enables the firm to create an architecture and a
specific action plan.
Many, but not all, of the instances considered will be from the information technology industry,
partly because it has seen rapid cycles of innovation and the concomitant creative destruction,
and partly because of the immediate relevance to many Indian firms. Since the Case Study
Method is best suited for critical analysis and problem-solving, that is the method adopted in this
course.
__________________________________________________________________________
Pedagogy:
Case analysis and readings. Emphasis on class discussion of the cases, relating them to
similar experiences from participants own experience (if any), and applying the principles
learned to current, real-life situations
_________________________________________________________________________
Evaluation Scheme:
Components
Surprise Quizzes or Tests
Case Presentation
Project or Term Paper
End Term Exam

Weightage (%)
20%
20%
20%
40%

Syllabus and References:

Textbook: Burgelman, R. A., Christensen, C. M. and Wheelwright, S. C., Strategic
Management of Technology and Innovation, Fifth Edition, Indian Edition available,
Tata-McGraw-Hill/Irwin, 2009. (Called "BCW" in this course description.)
REFERENCE BOOKS (OPTIONAL READING)
Davila, T., Epstein, M. J., and Shelton, R., Making Innovation Work: How to Manage It,
Measure It, and Profit from It., Wharton School Publishing/Pearson Education, 2005. There are
two copies in the Library.
Grove, Andrew S., Only the Paranoid Survive, Harper Collins Business, 1997
Moore, Geoffrey A., Crossing the Chasm, Harper Collins Business, 1991
Moore, Geoffrey A., Inside the Tornado, Harper Collins Business, 1995
Bronson, Po, The Nudist on the Late Shift, Random House, 1999
Collins, Jim, Built to Last, Harper Collins, 1994
Collins, Jim, Good to Great, Random House, 2001
Ghoshal, Sumantra, Managing Radical Change What Indian Companies must do to become
world-class, Viking, 2000
Porter, Michael E., Competitive Advantage, The Free Press, 2004
Pressman, David, Patent It Yourself, Tenth Edition, Nolo Press, 2004
Rackham, Neil, Rethinking the Sales Force, Tata McGraw-Hill, 2001
_

SESSION PLAN
Session
Topics
No.
1.
Dominant design and
Standard-setting,
Appropriability and
capturing value, Cospecialized assets,
Impact of policy, Role
of distribution channels

2.

Readings
Technology, Innovation, and
Strategy: A General
Management Perspective
(BCW, pp. 1-12)

Cases/Caselets
Elio Engineering Inc(A)
(BCW, pp. 13-31)

Profiting from Technological

Innovation: Implications for
Integration, Collaboration,
Licensing, and Public Policy
(BCW, p. 32-48)
Preparation Questions for the Case:
1. What is the structure of the automotive seat industry in 1998? How attractive is this
industry?
2. What are the potential sources of competitive advantage that Elio Engineering has?
How sustainable are they? Why/Why not?
3. What are Elio Engineering's strategic options in entering the automotive market?
Please evaluate these options and reach a conclusion on the most attractive one.
4. How well is Elio Engineering's technology strategy aligned with the requirements
for a successful entry into the automotive seat market? What, if anything, should they
change?
Moving to innovation
Designing and Implementing a
Advent Corporation
from invention, Creating Technology Strategy
(BCW, pp. 49-61)
utility, Focusing on
(BCW, pp. 141-155)
value levers of
customer, Identifying
and nurturing core
The Core Competence of the
competency of
Corporation
organization
(BCW, pp. 102-112)
Preparation Questions for the Case:
1. What are the key elements in Advent's strategy? How successful has Advent been?
Why?
2. What are Advent's distinct technological competencies? Please construct a matrix
showing the technological competencies embodied in the different segments of the
audio business. How is this different for the video business?
3. What are the key issues and problems facing Advent? Please prepare a detailed
action plan.
4. Characterize Kloss's style as a general manager. Does he need to change? How?

Session
No.
3.

4.

Topics
Strategy in a context of
punctuated equilibrium
of industry cycles, the
dynamics of vertically
integrated ecosystems
and how they are broken
by open systems,
managing technology
risks

Readings

Cases/Caselets

What is Strategy?
(BCW, pp. 113-129)

Electronic Arts in 1995

(BCW, pp. 67-82)

Technology, Innovation, and

Strategy: A General
Management Perspective
(BCW, pp. 1-12)

Electronic Arts in 2002

(BCW, pp.83-101)

Profiting from Technological

Innovation: Implications for
Integration, Collaboration,
Licensing, and Public Policy
(BCW, p. 32-48)
Preparation Questions for the Case:
1. In 1995, what are the key characteristics of the video game industry? In which
ways is it similar/different from the movie industry?
2. Until 1995, how successful has EA been? Why? What is the basis of their
competitive advantage?
3. Until 1995, what has been EA's technology strategy? How is it linked to their
business strategy?
4. In 1995, how should EA top management think about the platform development
decisions it faces?
5. By 2002, how has the Internet affected the video game industry? How does it affect
EAs corporate strategy? What should EAs corporate strategy be for the next 5 years?
Why? How execute the strategy?
Internal factors of
Intraorganizational Ecology of
None
technology evolution:
Strategy Making and
Strategic Action and
Organizational Adaptation
Structural Inertia of
(BCW, pp. 511-528)
Organization, Resourcebased model for longStrategic Intent
term strategic advantage (BCW, pp. 550-561)
Gunfire at Sea: A Case Study of
Innovation (BCW pp. 431-441)

Session
No.
5.

6.

Topics

Readings

Cases/Caselets

Cultural impediments to Note on New Drug

Eli Lilly and Company:
innovation based on
Development in the United
Drug Development
aversion to change, NIH States (BCW, pp. 410-414)
Strategy (BCW, pp.
or the not-invented-here
415-430)
syndrome, Risk-taking
based on long-term
strategic purpose
Preparation Questions for the Case:
1. What are the environmental factors facing the pharmaceutical industry especially
in the US? What is Eli Lillys strategic response to these?
2. Compare the various competitors balance sheet summaries in Exhibit 4 (page 418).
Compare R&D expenses and net earnings as a % of sales. How do you account for the
discrepancies in return on equity?
3. Diagram the new product development process in place at Eli Lilly as applied to the
migraine project. What are the advantages and disadvantages you can see in this
process? Compare this to the process in a smaller firm, example Advent (and Kloss) in
an earlier case.
4. What are the human factors issues creating resistance to the new techniques of
combinatorial chemistry and high throughput screening? Compare this to the issues in
the reading Gunfire at Sea
5. What are the possible financial implications of gaining first mover advantage? See
Exhibit 9. On the other hand, what is the downside of bringing an immature product to
market?
6. What would you recommend to the PTAC if you were Bianca Sharma? Why?
Innovation in business
Crossing the Chasm and
SAP America (BCW,
model including channel Beyond (BCW, pp. 362-367)
pp. 348-361)
dynamics, Evolution of
structure, Product life
cycle and relating
innovation to it
Preparation Questions for the Case:
1. What are the external and internal forces that explain why SAP America has grown
so rapidly? What are the challenges associated with this explosive growth?
2. What are the key features of SAP's approach to partnering, sales, and consulting?
What are the advantages and potential disadvantages of this approach?
3. What is your evaluation of the new organization? What problems was it designed to
solve?
4. As Eileen Basho, what is your action plan for dealing with the strategic and
organizational challenges that you face? Be specific!

Session
No.
7.

8.

Topics
Pitfalls in innovation,
The perils of listening
too hard to customers,
Failure of technology
leaders due to fear of
cannibalization

Readings
Architectural Innovation: The
Reconfiguration of Existing
Product Technologies and the
Failure of Established Firms
(BCW, pp. 441-454)

Cases/Caselets
Hewlett-Packard: The
Flight of the Kittyhawk
(BCW, pp. 529-540)

Preparation Questions for the Case:

1. Who were the key players in the emergence of the Kittyhawk project? What did
each of them contribute?
2. What are the strengths and weaknesses of the way Hewlett-Packard structured and
supported the Kittyhawk development team?
3. Why did Hewlett-Packard pursue the Kittyhawk project this way? What should they
do differently if they could do it over?
Battling corporate
Customer Power, Strategic
Hewlett Packards
inertia, Dealing with
Investment, and the Failure of
Merced Division (BCW,
industry structural
Leading Firms
pp. 233-244)
changes, The perils of
(BCW, pp. 245-264)
collaboration, Managing
the customer base at a
time of disruption
Preparation Questions for the Case:
1. In summer 1998, what is the position of the Enterprise Server Group (ESG) in its
industry? How has it evolved? Why?
2. Why did HP get involved in developing the IA-64 architecture?
3. Who will benefit the most from the introduction of the Merced chip in the markets
served by ESG? Who will benefit the least? Why?
4. In summer 1998, what should Jim Davis recommend?

Session
No.
9.

10.

Topics
Internal Corporate
Venturing, Reengineering Technology
Development, the role
of executive sponsors

Readings
Managing the Internal
Corporate Venturing Process
(BCW, pp. 915-924)

Cases/Caselets
R.R. Donnelley: The
Digital Division
(BCW, pp. 889-901)

Preparation Questions for the Case:

1. How do the critical success factors for Donnelleys traditional printing business
compare with those for digital printing?
2. Is digital printing a disruptive or a sustaining technology for Donnelley? Why?
3. What were the key stages in the development of the Digital Division?
4. In June 1995, what is the key strategic challenge facing Barb Schetter, general
manager of the Digital Division? How do you evaluate these? Prepare an action plan.
Reinventing processes,
The New Product Development Apple Computer, 1999
Using technology for
Map (BCW, pp. 1089 1098)
(BCW, pp. 1110 1127)
creating competitive
advantage, Capturing
value from ecosystem
Preparation Questions for the Case:
1. Historically, what were Apples major competitive advantages?
2. Analyze the structure of the personal computer industry over the last 10 years. How
have the dynamics of the PC industry changed?
3. Evaluate Apples strategies since 1990.
4. What are Steve Jobs options?

Session
No.
11.

12.

Topics

Readings

Cases/Caselets

Technology strategy
Enactment of Technology
Cisco Systems, Inc.:
implementation through StrategyDeveloping a Firms Acquisition Integration
acquisition, challenges
Innovative Capabilities
for Manufacturing (A)
of manufacturing
(BCW, pp. 657-670)
(BCW, pp. 745-761)
integration after
acquisition, new product
development process
Preparation Questions for the Case:
1.What are the most important elements (criteria, processes, specific actions, etc.) of
Ciscos approach to selecting and integrating acquisitions? Why?
2. How can Cisco improve its acquisition selection and integration process? What
should they add or modify? Why?
3. What are the specific challenges of the Summa Four acquisition? How well does
the Cisco process address these challenges? Why?
New product
Organizing and Leading
Product Development at
development as a
Heavyweight Development
Dell Computer
competitive weapon,
Teams (BCW, pp. 1012-1023) Corporation
Structuring teams for
(BCW, pp. 957-970)
efficient delivery, How
informal and formal
networks help
innovation
Preparation Questions for the Case:
1. How does Dell Computer differentiate itself from its competition in the desktop
market? What is its business strategy and its core competence? How is it able to
appropriate value from its innovations?
2. What are the advantages or disadvantages of Dells new product development
process as compared to others you have seen such as Cisco or 3M? What
improvements would you recommend?
3. What are the possible choices before Mark Holliday at the time of the case? What
would you recommend and why? What are the risks (including financial) associated
with your choice?

Session
No.
13.

Topics

Readings

Disruptive Technologies
and white Space
business opportunities

Bower and Christensen (1995).

Disruptive Technologies:
Catching the Wave. Harvard
Business Review, Jan-Feb.

Characteristics of a
Good Business Model;
Choices and
Consequences of
Business Models

Johnson, Christensen and

Technology Spin-off
Kagermann (2008). Reinventing Companies of Xerox
Your Business Model. Harvard Corporation
Business Review, Dec.
Casadesus-Masanell and Ricart
(2011). How to Design A
Winning Business Model.
Harvard Business Review,
Jan-Feb

Cases/Caselets
Spring Hospitals,
Vonage, Gyan Shala,
Salesforce.com, Nucor
Minimills

Dow Corning

Hilti

Ryannair Airlines
14.

Managing Process
Innovations

Utterback and Abernathy, 1975.

A Dynamic Model of Process
and Product Innovation.
Omega, Vol. 3 (6): 639-656.
Pisano and Wheelright, 1995.
The New Logic of High-Tech
R&D. Harvard Business
Review, Sep-Oct, 1995: 93-105.

15.

Barriers to Consumption
and Value Innovation to
capture untapped
Markets

Kim and Mauborgne (1999).

Creating New Market Space.
Harvard Business Review,
Jan-Feb (1-13).
Govindarajan and Trimble
(2011). The CEOs Role in
Business Model Reinvention.
Harvard Business Review,
Jan-Feb (109-114).

Gujarat Ambuja
Cements Cost Leader
in the Indian Cement
Industry

Bloomberg, NABI,
Charles Schwab,
Starbucks, Blyth
Industries, Novo
Nordisk, Chotukool