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Corporate Technology Ventures

Corporate Technology Ventures. Types of Business Ventures. Small business Sole proprietor, partnership, < 30 employees, $3million Niche business High-growth business Radical innovation business Corporate new venture. Corporate New Venture. CNV or Intrapreneurship Characteristics

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Corporate Technology Ventures

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  1. Corporate Technology Ventures

  2. Types of Business Ventures • Small business • Sole proprietor, partnership, < 30 employees, $3million • Niche business • High-growth business • Radical innovation business • Corporate new venture

  3. Corporate New Venture • CNV or Intrapreneurship • Characteristics • Novelty of product relative to existing products • Independence from existing corporate structure • High potential for significant innovation • Unique entrepreneurial team capabilities • Mature corporations that engage in new business venturing are innovative, continuously renew themselves, proactive

  4. Context • Dynamic market • Competitive rivalry • Need for new products CNV • Innovation • Novelty • Self-renewal • Proactive Performance • Growth • Profitability CNV Model

  5. Innovator’s Dilemma • Disruptive innovation can revolutionize industry and cause existing firms to fail • Firms listen to customers who tend not to want radical innovation • Disruptive innovation can cause cannibalization of existing product line • Fail to cannibalize if delusion that if they do not develop, no other firm will

  6. CNV Strengths / Weaknesses Weaknesses Strengths

  7. CNV: Incentives for Success • Resource advantages of corp. may not translate into higher performance for CNV • Corporate complexity, formality, rigidity are not conducive to high performance or reorientation • CNV entrepreneurs can benefit from knowledge of firm but must avoid excessive conformity to established means and norms of firm • Firms faced with disruptive technology should consider establishing a CNV

  8. CNV: Incentives for Success • Tie executive compensation to initiation and support of CNVs • Encourage ownership of stock in the firm by executives • Develop intrapreneurial infrastructure • 3M researchers can spend 15% of time on an idea without approval of management • Rubbermaid – no product on the shelf for longer than 3 years

  9. Incentives for Corp. Entrepreneur • Recognition of employees who create and champion new ideas • Culture that favors team initiative to create new ideas • Slack time for exploring ideas • Significant degree of autonomy of entrepreneurs • Effective rewards; promotion, bonus, stock options

  10. Parent Corp. • Financial • Physical • Intellectual • Human CNV or Spin-Off Champion Building CNVs • New independent venture • Spin-off of a new corporation • Transfer to existing product development line • Small project

  11. Building CNVs • Identify Opportunities • Create vision, designate venture champion, identify entrepreneurial team • Refine Concept • Prepare concept and vision statement, draft business plan summary • Business Plan • Determine Form for CNV • CNV, Spin-off, subsidiary, internal project • Establish CNV • Talent, resources, capabilities transfer from parent company

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