Daniel Jaspers and Heike Proff
This paper investigates how capital-intensive companies, especially in the automotive sector, navigate the challenge of balancing significant technological investments against…
Abstract
Purpose
This paper investigates how capital-intensive companies, especially in the automotive sector, navigate the challenge of balancing significant technological investments against market demands for asset-light strategies. It examines the use of innovation platforms as a strategic solution for mediating these goal conflicts and sustaining competitiveness in a technology-driven market.
Design/methodology/approach
The study analysed 286 automotive companies from Europe, North America and Asia through a quantitative survey conducted in 2022, focusing on companies using innovation platforms. It applied partial least squares structural equation modelling (PLS-SEM) to assess the relationships between the use of innovation platforms, relational rents and performance.
Findings
The research found that companies using innovation platforms can achieve early-stage relational rents through partnerships and resource sharing, although these benefits have not yet translated into profitability. Companies in the sample are still developing their partner network, and while they experience collaborative advantages, they face initial challenges in converting these into financial gains. The study highlights the critical role of scaling in the network, complementarities in production, limiting the outflow of resources and capabilities besides modularisation in achieving long-term profitability.
Originality/value
This study contributes to the literature by providing empirical evidence on how capital-intensive companies use innovation platforms to balance technological investments and asset-light pressures, a topic with limited previous research. It underscores the long-term potential of such digital platforms in innovation ecosystems in generating value and the need for patient investment in promising platform effects. The findings support the strategic value of innovation platforms as capital-intensive industries face intensified competition from high-technology companies.
Details
Keywords
Heike Proff and Thomas M. Fojcik
Really new products (RNP) run the risk not only of technical problems in the development process, but also of problems with customer acceptance. Because market uncertainty in…
Abstract
Purpose
Really new products (RNP) run the risk not only of technical problems in the development process, but also of problems with customer acceptance. Because market uncertainty in particular is frequently high, many top management teams defer essential management decisions on these products until sufficient information is available to be able to make a sound decision. In many cases, however, the market is already been divided up by that time. The purpose of this paper is to examine how better information about customers can be acquired by providing them with a better offering of information which has been prepared in a variety of forms (“information acceleration”) and how management decisions can be improved as a result.
Design/methodology/approach
The paper is based on modern models for decision making under uncertainty that incorporate group decisions, and shows how the measurement of purchasing behavior can be improved by information acceleration in a test studio. This is needed because customers generally cannot draw on mentally established analogies in the case of RNP, so that they are virtually unable to make meaningful statements that would improve strategic management decisions when completing standard customer surveys. A test studio was set up in the form of a Car Clinic for the example of a future electric vehicle as a RNP. 121 customers were to be offered a wide variety of information (about the future urban environment, the design of the vehicle concept and the driver’s experience), partly in order to acquire information about the customers. In particular, the extent to which customers could better evaluate their purchasing probability and willingness to pay certain prices and the extent to which the variance of customer opinions was reduced after attending the Car Clinic were examined, because these factors make it easier to forecast future sales revenue and management decisions can be made more easily.
Findings
The results reveal that information acceleration in a test studio can improve the estimation of sales revenue in an early decision-making phase and can have a positive influence on decision-making behavior under uncertainty.
Originality/value
This study provides an empirical, valuable step toward an investigation of management decisions on RNP under uncertainty.
Details
Keywords
The growing modularization of complex products encourages the division of labor in industry. End product manufacturers outsource production of individual components to large…
Abstract
The growing modularization of complex products encourages the division of labor in industry. End product manufacturers outsource production of individual components to large module suppliers, saving on costs in the short term. In the medium term, however, they sacrifice competences. The competitive strategy they choose – either cost leadership or differentiation – determines how this conflict is resolved. This paper examines the shift in competences to module suppliers, and the likely reactions of end product manufacturers, particularly those pursuing a differentiation strategy. The discussion begins at a general level, and then focuses on the automotive industry as an example. The paper derives potential strategic actions going forward based on transaction cost theory and core competency theory, and conducts a content analysis to examine them empirically.
This paper presents a model of resources refinement for systematically and comprehensively deriving competence-based competitive advantages. Competence-based competitive…
Abstract
This paper presents a model of resources refinement for systematically and comprehensively deriving competence-based competitive advantages. Competence-based competitive advantages support market-based strategies. They reinforce the overall market-based advantages of low costs, product differentiation and minimal cost differentiation at the business unit level and of carrying out tasks jointly in a performance compound at the corporate level. Competence-based competitive advantages also support resource-based strategies by reinforcing the advantages of product innovation skills at the business unit level and transfer of core competences in a performance compound at the corporate level.
Growth strategies exist, specifically for business divisions with a poor competitive position, by “orchestrating” value chains in external networks. The theory of competence…
Abstract
Growth strategies exist, specifically for business divisions with a poor competitive position, by “orchestrating” value chains in external networks. The theory of competence development provides a basis for successfully developing new value architectures, since massive changes in a business division can take place only if they are based on durable competences. Four steps to orchestrating value chains can be deduced: (1) identifying changes in the value architecture as a possible growth strategy, (2) creating the organizational prerequisites for the deconstruction of value chains, (3) selling nonspecific value-added and (4) building networks around the core business that link (nonspecific) noncore activities to the firm.
This paper examines competence development as a facet of a firm’s dynamics. Proceeding from a “model of competence building” developed in an earlier study, a theory of competence…
Abstract
This paper examines competence development as a facet of a firm’s dynamics. Proceeding from a “model of competence building” developed in an earlier study, a theory of competence development is outlined, which recommends that competence development should cyclically alternate between competence upgrading and competence renewal. This cycle is subject to various influences, including the firm-specific resource base, the way in which managers perceive competence to create customer value, the level of undesired knowledge diffusion, and changes in the environmental dynamics specific to the firm. Inevitably, the theory of competence development involves some simplifications; yet it’s relevance is underlined by the fact that it stands up to empirical analysis.
Part I of this issue begins with a paper by Colin Eden and Fran Ackermann on “Competences, distinctive competences, and core competences.” Eden and Ackermann draw on their…
Abstract
Part I of this issue begins with a paper by Colin Eden and Fran Ackermann on “Competences, distinctive competences, and core competences.” Eden and Ackermann draw on their extensive work with top management teams in workshops focused on identifying the competences of an organization. They describe an interactive process of engagement with managers through which an organization's competences are identified, some of which are further judged to be “distinctive competences” of the organization. Analysis of the interrelationships among a firm's identified competences then leads to the discovery of a pattern of competence interactions in which some competences appear to be at the “core” of the organizations distinctive competences. The paper presents an interesting perspective on how the capabilities and competences of a firm are often interrelated in ways that invite special attention and development by managers. Further, the paper explains the systems methodology that the authors have developed for use with managers to help identify and assess an organization's competences.
In their paper “Fractals, stories, and the development of coherence in strategic logic,” Janice Black, Frances Fabian, and Kim Hinrichs explore key communication dynamics that…
Abstract
In their paper “Fractals, stories, and the development of coherence in strategic logic,” Janice Black, Frances Fabian, and Kim Hinrichs explore key communication dynamics that drive the emergence of a coherent strategic logic in an organization. Using a longitudinal study of a non-profit organization in the health and caring industry, the authors use “fractals” as a metaphor for organizational processes that help to crystallize a clear, coherent, and well understood statement of an organization’s strategic logic. Their study also suggests how the mathematical rules that govern the iterative generation of fractals in nature can be applied to develop a “mathematics of social systems.” The authors’ analysis of strategy processes in the subject organization shows how the use of storytelling through internal organizational publications can contribute substantially to the emergence of a coherent strategic logic and supporting value system within an organization.
The competence-based perspective shares with the resource-based view the notion of the fundamental importance of an organization's resources in its competitive outcomes.1 In his…
Abstract
The competence-based perspective shares with the resource-based view the notion of the fundamental importance of an organization's resources in its competitive outcomes.1 In his paper “Probing into the nature of resources: Sustainable advantages and appropriable rents in the U.S. motion picture industry,” Jamal Shamsie investigates the sustainability of the competitive advantages that strategically important resources can bring to a firm, as well as the appropriability of the economic profits (rents) that can be derived from the uses of resources. To this end, the paper develops a classification of resource types based on the nature of a resource's ownership and control. Shamsie studies the U.S. motion picture industry to assess the degree of sustainable advantages and appropriable rents that can be generated by three types of resources: contracted resources, owned resources, and embedded resources. His findings suggest that in the subject industry both sustainability and appropriability are likely to be low for contracted resources such as top-rated stars and directors, while the greatest potential for sustainability and appropriability attach to embedded resources that accumulate firm-specific knowledge and learning in the development and marketing of various film genres.