13894802
Description
Flashcards by Christian Weibel, updated more than 1 year ago
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Created by Christian Weibel
almost 6 years ago
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| Question | Answer |
| What is Corporate Venturing? | 1. Generate new business 2. Established organizations invest in or create new businesses |
| 3 Forms of Corporate Venturing | 1. Internal CV 2. Cooperative CV 3. External CV |
| Motives and Goals for CV | - Make the corporation more entrepreneurial - Build innovative capabilities - Generate quick financial returns - Learning possibilities - Build new competencies - But: High risk of failure! |
| Internal CV: Definition | A firm stimulates entrepreneurial activity within its boundaries. Building businesses in existing corporations. has to be separated from other ongoing operations! |
| Motives for ICV | Leveraging: Exploit existing corporate competencies in new product or market Learning: To acquire new knowledge and skills that may be useful in existing products or markets |
| Advantages of ICV | - Leads to open-minded creativity - Signaling effect, provides excitement - Competencies can be leveraged - Learning processes are started - Frees team members to think and act entrepreneurially - Refreshs employees - Stimulates new waysof thinking |
| Disadvantages of ICV | - Isolation from corporate mainstream - Failure to obtain resources and support to carry project - Cultural challenge - High risk if much money involved - Break up teams - Distraction from core business - Loss of focus of managers |
| What means New Venture Group? | - Semi-autonomous unit with little formal structure - Own staff and own budget - Development might later be integrated or spun out |
| Succes Factors of New Venture Groups | - Role clarity - Senior governance to access resources - VC-style funding - Independent ventures - Entrepreneurial talent pool |
| What means External Corporate Venturing? Main motivations for it? | Buy in of innovation by acquiring smaller companies No short term financial gain, rather innovation and strategic foresight. When innovation performance is lagging behind. |
| Advantages of ECV | For main corporation: - Knowledge transfer from external sources - Quick to execute - Easier to find than internal innovations - Can be a strategy of business transformation - Highly motivating to the staff involved For acquired firm: - Availability of funding - Enhancement of own reputation - Improvement of operations - Capitalize of corporate resources |
| Disadvantages of ECV | For main corporation: - Risky investment - Lack of complete control - Cultural issues For acquired firm: - Canibalization of parent product - Parent firm maximization - CVC unit may lack crucial expertise |
| Succes factors of ECV | - Commitment of senior management - Consistent with corporate strategy - Effective HR policies - Sufficient financial capital for strategic use - Find the right target |
| When to choose internal CV? | Situation: Creative destruction at work, innovation is needed Firm has skills and capabilities for development of a new invention. Efficiently draw on existing resources possible. |
| When to choose Joint Ventures? | - Uncertainty and learning distance high - Desired invention does not exist yet - Capabilities too distant - Unique learning possible 1+1=3 - All partners send key resources into the collaboration |
| When to choose External CV? | - Current capabilities and needed to pursue entrepreneurial opportunity do not match. - Possible value creation - No cheap deals - Considerable risk and investment - Possibility to keep key people on board |
| When to do nothing? | - Only incremental innovation - Cost reductions - Stable environment |
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