Innovation management. Учебное пособие
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4. Pricing of innovations
2.Profitability index (PI), PI=∑CFi/(1+r)i /I
where I – investment sum. ∑CFi/(1+r)i – net cash flow sum.
3.Payback period is simple and discounted,
4.Internal Rate of Return и (IRR). Internal Rate of Return – this is the value of the discount rate at which NPV=0.
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5. INNOVATION STRATEGIC MANAGEMENT
The concept of strategic management in the innovation sphere. Features and choice of strategy. Extrapolation, search forecast, normative forecast, forecast on the basis of trend analysis, intuitive forecast. The overall goal and model of innovation management system. Optimal control techniques. Basic concepts of the theory of decision-making. Classification problems of innovative strategies’ development.
The choice of strategy is the key to success of innovative activity. The firm can turn out in crisis if it doesn't manage to expect the changing circumstances and to react to them in time. The strategy choice is the most important component of innovative management. Strategy can be defined as decision-making process.
Strategy means the interconnected complex of actions for strengthening of viability and power of the enterprise (firm) in relation to his competitors. It is a detailed, comprehensive, complex plan of goals achievement. Development of plans of carrying out research and development and other forms of innovative activity is connected with the choice of strategy.
Strategy development pursues two main objectives:
1.Effective distribution and use of resources. It "internal strategy" - is planned use of limited resources, such as capital, technologies, humans. Besides, acquisition of the enterprises in new branches, an exit from undesirable branches, selection of effective "portfolio" of the enterprises is carried out.
2.Adaptation to the external environment - the task to provide effective adaptation to change of external factors is set (economic changes, political factors, a demographic situation, etc.).
Development of strategy begins with a formulation of a common goal of the organization which has to be clear to any expert. Statement of the purpose plays an important role in communications of firm with the external environment, the market, the consumer.
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5. Innovation strategic management
The common goal of the organization has to consider:
•main activity of firm;
•the working principles in the external environment (the principles of trade);
•attitudes towards the consumer (maintaining business contacts);
•culture of the organization, its tradition, working climate.
At the choice of the purpose it is necessary to consider two aspects:
Who are the firm clients? and
What requirements can it satisfy?
After statement sheathe the purposes the second stage of strategic planning is carried out - the specification of aims. For example, the following main objectives can be defined:
1)the profitability - to achieve in the current year the level of net profit of 5 million c.u.;
2)the markets (sales volume, a market share) - to bring a market share to 20% or to bring sales volume to 40 thousand units;
3)productivity - average hour development on one worker has to be 8 units of production:
4)financial resources (size and structure of the capital; ratio of own and loan capital; size of working capital, etc.);
5)production capacities, buildings and constructions - to build new warehouse of 4000 sq.m;
6)the organization (change in organizational structure and activity) - to open representative office of firm in a certain region, etc.
That the objectives could be achieved, at its statement the following requirements have to be considered:
• the accurate and concrete formulation of the purpose expressed in concrete measuring instruments (monetary, natural, labor);
• each purpose has to be limited in time, the term of her achievement is set.
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Innovation management
The goals could be achieved, at its statement the following requirements have to be considered:
•can be long-term (up to 10 years), medium-term (up to 5 years) and short-term (till 1 year): they are specified taking into account changes of a situation and results of control:
•have to be achievable;
•shouldn't deny one another.
Strategic planning is based on the careful analysis of external and internal environment of company:
-the changes happening or possible in the planned period are estimated;
-the factors menacing to positions of firm come to light;
-the factors favorable for activity of firm are investigated. Processes and changes in the external environment make the vital
impact on firm. The major factors connected with the external environment are economy, policy, the market, technology, the competition. Especially important factor is the competition. Therefore it is necessary to reveal the main competitors and to find out their market positions (a market share, sales volumes, the purposes, etc.). It is expedient to conduct researches on the following directions for this purpose:
•to estimate the current strategy of competitors (their behavior in the market, methods of advance of goods, etc.);
•to investigate influence of the external environment on competitors;
•to try to collect data on scientific and technical developments of rivals and other information, to make the forecast of future actions of competitors and to plan ways of counteraction.
Careful studying strong both weaknesses of competitors and comparison of their results with own indicators will allow thinking over the strategy of competition better.
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5. Innovation strategic management
Strategy is a starting point for theoretical and empirical researches. The organizations can differ with that as far as their heads making key decisions have connected themselves with the strategy of use of innovations. If the top management supports attempts to realize an innovation, probability that it will be accepted to introduction in the organization increases. In process of involvement in decision-making process the highest the managements the value of the strategic and financial objectives increases,
Development of strategy is carried out according to the following scheme (Fig. 5.1).
The first phase is the most difficult. It includes formation of the purposes and carrying out SWOT analysis.
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Fig.5.1. Phases of strategic planning
Types of innovative strategy
Innovative strategy represents means of achievement of the goals of the organization in relation to the internal environment of the organization. The innovative strategy is subdivided into the following groups:
-grocery - are focused on creation of new goods, services, technologies;
-functional - belong them scientific and technical, production, marketing and service strategy;
-resource - the novelty aspect is brought in resource providing (labor, material, financial, information):
-organizational and administrative - concern change of control systems.
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Innovation management
The basis of elaboration of innovative strategy is made the scientific and technical policy pursued by firm, a market position of firm and the theory of life cycle of a product.
Depending on scientific and technical policy allocate three types of innovative strategy.
1.Offensive - it is characteristic of the firms basing the activity on the principles of the enterprise competition; it is peculiar to small innovative firms.
2.Defensive - it is directed to hold competitive positions of firm in already available markets. The main function of such strategy is to make active a ratio of "expense result" in innovative process. Such strategy demands intensive research and development.
3.Imitating - it is used by the firms having strong market and technological positions: not being pioneers in release on the market of these or those innovations. At the same time the main consumer properties (but unreliable technical features) the innovations put on the market by small innovative firms or leading firms are copied.
Now basic (reference) innovative strategies are widely used. They are aimed at the development of competitive advantages therefore they are called the strategy of growth (Fig.5.2).
The basic strategies of growth are divided into four groups:
1)strategy of intensive development;
2)strategy of integration development:
3)strategy of diversification:
4)strategy of reduction.
At implementation of strategy of intensive development the organization increases the potential by the best use of the internal forces and those opportunities which are given by the external environment.
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5. Innovation strategic management
BASIC STRATEGY OF COMPANY GROWTH
Group of strategy of intensive growth. Deep penetration (strengthening of positions) on this market with this product. Local innovative strategy in connection with change of a condition of elements of the company.
Market development Marketing innovation (the new market - old goods)
Market development Product innovation (new goods - the old market)
Group of strategy of integration growth. Vertical integration down (with suppliers). Organizational innovation: merge, absorption, alliances with suppliers and supplying companies
Vertical integration up (with consumers) Organizational innovation: merge, absorption, alliances with consumers and with household companies
Horizontal innovation (with the industry rival organizations) Organizational innovation: merge, absorption, alliances with the developing organizations of an industry
Group of strategy of diversification growth. Design diversification (centralize). Design (product) innovation (new product, old technology, old market).
Design-technology diversification Design and technological innovations (new product, new technology, old market)
Conglomerate ("net" or complete) diversification Design, technological and marketing innovations (new product, new technology, new market)
Fig.5.2. Basic strategies of company growth
Three strategies of intensive development are known:
•"the existing goods in the existing market" - strategy is directed to deeper penetration with these goods on the market;
•"the new goods - the old market" are a grocery innovative strategy at which the goods with new consumer properties are developed and implemented in the old market;
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Innovation management
•"the old goods - the new market" - the marketing innovative strategy directed to realization of the known goods in new market segments.
There are three strategy of integration development:
•vertical integration with suppliers;
•vertical integration with consumers;
•horizontal integration (interaction with the branch rival enterprises).
Allocate also three strategies of diversification:
- design - the grocery strategy aimed at finding and use of additional opportunities of business; scheme of realization of strategy: a new product - old technology - the old market;
- design and technological strategy - assumes changes in a product and technology: scheme of realization of strategy: a new product - new technology - the old market:
- design, technological and marketing strategy - is used according to the scheme: a new product - new technology - the new market.
- The strategy of reduction is shown that the organizations reveal and reduce inexpedient expenses. These actions of the enterprise involve acquisition of new types of materials, technologies, changes of organizational structure.
There are several types of strategy of reduction:
•administrative (organizational) - changes in structure of the enterprise and, as a result, elimination of separate structural links;
•local innovative - the management of prime cost connected with change of separate elements of the enterprise;
•technological - change of a production cycle for reduction of shots and joint costs.
The innovative strategy developed on the basis of the theory of life cycle of a product considers phases in which the product is. Sometimes include several stages in life cycle of an innovation: origin,
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5. Innovation strategic management
birth, statement, stabilization, simplification, falling, outcome and destructurisation.
1.Origin. This turning point is characterized by emergence of a germ of new system in the old environment that demands reorganization of all activity. For example, emergence of the first idea (the issued technical solution) or the organization of the firm specializing in creation new or radical transformation of old segments of the market which undertakes to develop the new equipment.
2.Birth. At this stage there is a new system created substantially just like the systems which have generated it. For example, after registration of technical solution pass to general idea of a new type of the equipment (formulation of the layout scheme) or to transformation of the created firm to another, working for a narrow segment of the market and satisfying its specific requirements.
3.Statement. The system which begins to compete on equal terms with created earlier arises and is formed. For example, emergence of the first idea will allow passing to practical creation of the first samples of a new type of the equipment or transformation of the previous firm to firm with ""power" strategy, acting in the sphere of large standard business.
4.Stabilization. The change consists in the entry of system into such period when it exhausts the potential of further growth and is close to a maturity. For example, transition to implementation of the technical systems suitable for large-scale realization or entry of firm into the world market and education on him the first branch.
5.Simplification. On this ethane "withering" of system begins. For example, optimization of created technical system or formation of the multinational company.
6.Falling. In many cases decrease in the majority of significant vital signs of system is noted, that makes a change essence. At this stage improvements of earlier created technical system at the level of improvement suggestions, disintegration of a multinational corporation
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Innovation management
on a number of the isolated firms which are carrying out medium and small business for satisfaction of local requirements begin.
7.Outcome. At this stage of life cycle the system comes back to the initial state and is prepared for transition to a new state. For example, change of functions exploited technicians or death of one of the firms which have separated from a multinational corporation.
8.Destructurization. There is a stop of all processes of activity of system, or it is used in other quality, or utilization is carried out. The firm stops existence; as a rule, it means its re-specialization on release of other production.
Classification and characteristic of methods of management of innovations. The method (reception) of management of innovations is a way of impact of the subject of management on the operated subsystem, object of management (innovations, innovative process and the relations in the market of realization of an innovation). Impact of methods of innovative management can be directed to area of production and/or sale of an innovation. From here they can be divided into the following groups:
1.Methods of forecasting of innovations;
2.Methods of search of the ideas of innovations;
3.The receptions influencing only production of innovations have the only purpose creation of a new product or new operation (technology) with high qualitative parameters. The benchmarking and marketing reception of management belong to these receptions;
4.The receptions influencing both production, and realization, advance and diffusion of an innovation: engineering of an innovation, reengineering of an innovation, innovation brand strategy;
5. The receptions influencing only realization, advance and diffusion of an innovation: price reception of management, front of the market, merger. The main goal of all receptions of this group is an acceleration of sale of innovations with the greatest benefit and
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