The Steps in Teeces Model with Regards to Applicability to the Organisations Operations - Essay Example

Q3 Eurocopter Basically, dynamic capabilities describe the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. The “Teece’s” model is one good model that can be use to explain how the company can develop its innovation capabilities. This model divides the capabilities into three steps namely: the capability to sense and shape opportunities and threats, to seize opportunities and to maintain competitiveness through enhancing, protecting and reconfiguring the company’s assets. This model works like a cycle whereby a company finds its opportunities, seize the opportunity, transform itself then it goes back sense the new opportunity again. It can be noted that Eurocopter is one organisation that applies this model to enhance its dynamic capabilities hence this essay seeks to explain the different steps in the model with regards to applicability to the organisation’s operations. It is imperative that the organisation should first sense the opportunity from the environment in order to develop its dynamic capabilities. Sensing refers to the ability to scan and create an opportunity from the environment and it also refers to the organisation’s ability to learn and interpret those opportunities (Teece, 2009. p9). The sensing stage is mainly comprised of four elements namely: processes to direct internal R&D and also select the new technology, processes to tap the external development in technology, processes to exploit the innovation from supplier and complementor as well as the processes to target the market segment and managing customer needs and innovations. As far as the processes to direct internal R & D and new technology are concerned, it can be noted that Eurocopter internally perceives the opportunity on the blade business. The blades often require to be repaired as they form a very important aspect in the life of the helicopter hence Eurocopter finds this as a big opportunity in the blade business if they can increase competency in terms of blade business processes which may include design, manufacturing and maintenance of composite rotor blades, propellers, turbine blades as well as other issues related to repairs. Under the strategic alliance the organisation collaborates with many external partners given that it strongly believes that these parties will help it to improve its innovativeness on the blades. It also has a joint manufacturing project with the other companies such as Kawasaki. Basically, Kawasaki is the major supplier of the cabin as well as the electrical systems, while Eurocopter will be responsible for the tail boom, the dynamic system, and the engine equipment and it also works with other suppliers. The other stage is processes to target the market segment and managing the customer needs and innovations and it can be noted that after consideration of the blade repair as a new stream innovation, Euro then works closely with its customers in order to carefully manage their requirements. The strategy is further enhanced by opening the opportunities that are meant to involve the customers through conducting customer surveys as well as customer focus groups. The involvement of the customers greatly help Eurocopter to gain new information about the customer needs which can be used to create the products that meet their needs. Having found the opportunity in the blade repair business, the next step for Euro is to focus on seizing which is concerned with addressing, developing and commercializing the opportunity. This seizing step is comprised of four main areas namely: refining the business model, selecting the decision-making protocol, selecting the platform as well as building loyalty. After identifying that the blade repair is the mainstream activity, Erocopter can realign its business model in the repair process of the blades in order to seize the opportunity more effectively. Thus, Euro has changed from a sequential vertical approach to horizontally aligned cross-functional processes. It can be noted that in its old business model, the repair process was very isolated from the customers since the blade was passed sequentially from warehouse, technical assessment, repair and maintenance, and lastly at customer support center before being sent back to the customer. After changing to the new approach, the waiting time was significantly reduced. The decision making protocol at Eurocopter is improved by virtue of it seen as a process that is not centrally located in one department but is spread across all departments. According to the case study, innovation becomes the state of mind that guides both the employee and the company. Thus, in this new dispensation in the decision making protocol, staff in the support team is seen closely involved in the decision making process in order to reflect their wishes and interests. As noted already, Euro has much collaboration with its complementors and suppliers. It however, reconfigured the blade repair process after it had discovered some glitches in the old process especially in the repair department. Then, the last element in the seizing step is building loyalty. HR tools are used to build loyalty where the motivation takes the center stage. Euro also empowers its employees through participation in the decision making process that will help them create a sense of belonging to the organisation. Employee loyalty is also created through offering training and development that is meant to empower them to be innovative. Having followed the four main areas mentioned above, the company will then be concerned with commercializing the newly found opportunity to grow and attain profits. However, there is no guarantee that this profit and growth would be sustained in the future. It is therefore important for the company to manage the threats and reconfigure itself and it should have a tool or control method to reduce the risk from the threats. There are four main areas that need to be focused by the company and these include decentralization, co specialisation, governance and knowledge management. The decentralization and co specialisation can help the company to sustain its innovation capabilities while governance and knowledge management would help the company to reduce the threats on its innovations. A good example of what Euro has done with regards to decentralization is that it is reorganizing its blade repair process as noted above. The horizontal structure helps the organisation to embrace its innovation given the fact that there is flexibility in the decision making process. Through continuous training, job rotation and development, Euro enhances knowledge management through exchange of information in a free environment. Co specialisation is concerned with extending relationships to external parties just like the case with Euro which makes it easy for them to sustain its innovation capabilities. Above all, Euro has adopted the mainstream activities and newstream innovation strategy, so that it can enhance the company’s asset combination’s value. It considers the helicopter as its mainstream activities, and uses its core competency in blade repair process as newstream innovation to increase its company’s value. Governance is the last step of its innovation. Euro reduces its risk of innovation leakage to outside by controlling its employee turnover through motivating them through different incentives. Over and above, it can be noted that an analysis of Euro above resembles many features of Teece’s model the reason why it is successful in its business especially the blade repair business. It can be noted that all the steps in the model are achieved and the company has sufficient capabilities to gain competitive advantages. Q3 star Introduction The concept of dynamic capabilities is used to describe the firm’s ability to integrate, build, and reconfigure internal and external competences in order to address rapidly changing environments. An ideal model that can be used to explain how a company can develop its innovation capabilities is “Teece’s model.” This model actually divides the dynamic capabilities into three steps which involve the following: capabilities to sense and shape opportunities and threats, to seize opportunities, and to maintain competitiveness through enhancing, combining, protecting and reconfiguring the organisation’s assets. Thus, this model is like a circle. Against this background, this essay seeks to critically explain the elements of each step in Teece’s model as well as illustrating how SPM applies this model. Sensing includes scanning as well as creating the opportunity from the environment. This also refers to the ability of the organisation to learn as well as interpreting those opportunities (Teece, 2009. p9). The process of scanning the environment is mainly comprised of four element which involve the following stages: Processes to direct internal R&D and also select the new technology, processes to tap the external development in technology, processes to exploit the innovation from supplier and complimentor as well as the processes to target the market segment and managing customer needs and innovations. As far as direct internal R & D and technology are concerned, SPM has quite a strong internal R & D team. As noted from the case study, the organisation is comprised of a highly qualified workforce whereby 11 out of the 22 workers are holders of PhD qualifications. It can be noted that these two factors can enhance SPM to have a large opportunity to explore internally. On top of that, it is also mentioned in its annual report that SPM develops high value dendrimer nanodrugs in order to address the unmet needs of the market which could help it to create another new opportunity. The processes to tap the external development in technology at SPM mainly draw from the external market by observing the competitors’ patenting portfolios which is also used as a guide to niche its market. The organisation observes the technology used by the competitors then tries to filter if there can be any other technology it can explore further. For instance in the 2002 AGM, the foundation of its value proposition included the new technology, Nanotechology, which is the new technology that SPM was interested. The third stage is concerned with processes to exploit the innovation from the supplier and it can be noted that SPM has much collaboration with its suppliers and complimentors. First and foremost, it can be noted that it has a good relationship with DNT which is holding many patents for the dendrimer science field. Given that SPM holds 49.99% in DNT, it would be very easy for SPM to have access to this large intellectual property portfolio and help accelerate its new product development process. SPM believes that closely working together would reduce the barriers to entry and encourage other companies to help each other to invest in the development of the dendrimer. The last stage is the processes to target the market segment and managing customer needs and innovations. The case study has shown that SPM observes the competitors’ patenting portfolio and it can use the result for this observation to target its niche market. The case study also shows that the market is characterized by a pull situation which implies that SPM is encouraged to work with its customers closely in order to understand their needs and what it can offer to them. The next step SPM should be focusing on is seizing. This is the ability to address, develop, and commercialize the opportunity. Addressing the opportunities also involves maintaining and improving the company’s technology as well as competences and complementary assets. Seizing step is comprised of four important areas which include the following: refining the business model, selecting the decision-making protocol, selecting the platform as well as building loyalty. SPM is a group company which consists Viralstar Limited and Angiostar Limited. SPM is the license holder for technology and it manages the group innovations or intellectual property portfolio. The other two subsidiaries specifically focus on its own technology which involves Anti-viral therapeutic and Angiogenesis. This business model is mainly concerned with innovation capabilities that would be enhanced as each company could focus on its own technology, explore and exploit on that of specialty. In the decision making protocol, SPM focuses on how to shorten the decision making process so that it would benefit in the launching of a product or even registering for the intellectual property protection process. On the other hand, the business platform for SPM in developing its innovation capabilities is based on the dendrimer platform technology. The last element is the seizing the step which is concerned with building loyalty among the stakeholders involved. This refers to the process whereby the leadership communicates the goals, values and expectations of the organisation while at the same time motivating the employees to create a sense of belonging to the organisation. This can be used as a step to increase innovation capabilities through its action and communication process. Since there is no guarantee that its profitability and growth can be sustained in the future, the company should be concerned with managing its threats while at the same time reconfiguring its operations. This can be done through four different steps which include: decentralization, core specialisation, governance and knowledge management. The decentralization and co specialisation would help the company to sustain its innovation capabilities while governance and knowledge management would help the company to reduce the threats on its innovations. Being a small organisation decentralization of the workforce at SPM is achievable since the roles and responsibilities for the individuals are broad. Co specialisation can be further developed from its complimentors as noted above. The strong relationship with the complementors such as DNT, they could further support each other in development as well as sharing knowledge and expertise with each other. Governance is mainly comprised of three aspects at SPM. The senior management regularly meets to discuss the issues pertaining to innovation and commercialization of the current products and R&D projects. Additionally, this senior management is also responsible for creating and maintaining a culture which has already helped SPM to enhance its innovation capabilities. SPM ensures that the patents which have expired will be replaced with new ones so as to be able to sustain its competitiveness. SPM tries to be in compliance with international standards and regulations. SPM is a good example of an organisation which practices knowledge management through provision of access to external facilities such as the biomedical resources. On top of that it uses the internet to stay connected with the global community and as well as to update its knowledge about the competitors. In conclusion, it can be noted that a close analysis of SPM above shows that SPM has passed though many activities which resemble the Teece’s model. This is the reason why SPM is successful in its dendrimer technology. It can be noted that once all the steps in the Teece’s model have been successfully achieved, the company will be better positioned to have sufficient capabilities to gain competitive advantages. Q3 UGM Basically, the purpose of Teece’s model is to analyse the dynamic capabilities which allow the business to establish, maintain as well as to safeguard valuable assets to the organisation that are not tangible to ensure its survival and viability in the long run. This model is mainly comprised of three steps which include the following: model sensing, seizing and managing threats as well as transforming. Thus, this model is going to be used to analyse how Caterpillar Underground Mining (UGM), a world leader in mining machines and components industry operates. Sensing stage is mainly concerned with analytical systems that are meant to search, filter and shape the opportunities in the environment. It is divided into four categories. The first and major process is to direct internal R&D and select new technology. This is primarily concerned with exploring and checking if there are opportunities in the R & D activities. UGM strongly relies on selecting the appropriate technologies that can help it improve its business processes as well as the products. A good example can be drawn from the stance it took to select technologies meant to minimize waste, reduce pollution as well as to recycle waste. It can be seen that UGM does not solely rely on local sources for the technologies used to improve its products but they also come from external sources. The dynamic capabilities model posits to the effect that tapping of supplier and complementor innovation can be classified as the other example of a process of sensing. The next stage is concerned with tapping developments in exogenous science and technology. This is concerned with full use of external assets finding information and searching as well as shaping the opportunity. UGM also uses different sources to learn about the new products. As far as the external sources are concerned, UGM works hand in hand with the external partners such as Commonwealth Scientific and Industrial Research, the Australian Metal Industries Research Association, the small automate Technology Company and Brisbane-based Cooperative Research Center of Excellence in Mining. Identifying the target market segment is the last stage which is also concerned with changing the customer needs. This will enhance the organisation to create a vision that will be very helpful in its endeavor to gain competitive advantage in the industry that can ensure its long term survival and development. It often obtains information about the customers through site visits or surveys which makes it able to stay in touch with the changes that can take place on the ground. Potential markets are also identified by UGM through market research where opportunities for growth of the market are identified and nurtured. Focusing on customer needs, increased used of sophisticated technology as well as continuous improvement of R&D greatly help in development of requisite solutions for UGM. The first stage is delineating the Customer Solution and the Business Model which involves forming solution and means to get after the opportunity. In order to address the SD opportunity, UGM uses the strategy of integrating the sustainable development philosophy with the other policies into its business model so as to be able to come up with the best model upon which its operations can be based such as the development of green products meant to protect the environment. UGM is concerned with developing long term business strategies that also address the customer needs. The other important stage involves the selection of decision-making protocols. UGM made its decision on NDP through taking into consideration the aspect of cannibalization. UGM is influenced in its decisions by the knowledge that paying particular attention to solutions addressing current needs of the customers may be dangerous if new customer segments and new markets are ignored. The next stage is concerned with selecting enterprise boundaries to manage complements and control platforms. This refers to aspects related to the organisation’s tangible assets such as the machinery, buildings as well as the assets which are not tangible such as IP. Taking an example from UGM, it can be noted that makes use of the EPA standards while developing its products which does not sacrifice its performance and reliability. Apart from that, the organisation has set a platform to fit its low emission engines that can fit on many trucks in line with its green revolution. The last sub-stage is concerned with building the commitment and loyalty among various stakeholders which involves providing positive leadership qualities, building a culture which is accommodative as well as working towards the attainment of the goal. The success of this stage is mainly dependent on the effectiveness of the management. UGM’s management is comprised of strong leadership which is required in forming innovative organisation through creation of an enabling environment that allows knowledge sharing. Combination, reconfiguration and asset protection skills is a stage which is associated with transforming the firm to be readily better positioned to deal with a dynamic ecosystem as well as managing threats that can emerge from the ever changing environment. This is comprised of four sub-stages outlined below in relation to UGM. Decentralization and Near Decomposability is the first stage and it is mainly concerned with reorganization of the organisations activities so as to be flexible in responding to changes that are unprecedented as well as embracing open innovation of external development. As far as UGM is concerned, it can be said that it has managed to address the stage efficiently given that it has a flat organizational structure which is supportive of creativity as well as innovation which is also owed to improved performance. This system allows a two way communication channel whereby the customers and the dealers can freely exchange feedback and other related information about what they want the products and services to be like in view of changing tastes and interests. The second sub-stage is Governance which is concerned with measures that are in place that to enable learning as well as generation of new knowledge, and preventing misuse of governance and IP by the employees. The use of the reward system by UGM has greatly played a significant role in improving the performance of the employees. It cannot be ascertained however the extent to which authority is abused. The next sub-stage is Co-specialization which involves the management of complementary assets in a bid to enhance value. UGM uses this system to manage the environment that is supportive to innovative capability and competencies in underground mining machinery as a way of enhancing new product value. On top of ensuring competencies in underground machinery, UGM also uses specialisation to compete with other rival competitors in the industry such as forestry of agriculture industries which may require the use of the same machinery. The last sub stage is Knowledge management and this involves the process whereby the knowledge is created, disseminated or shared, integrated into existing knowledge. UGM makes use of continuous research, training and education which have enabled the employees to develop and maintain the necessary skills to execute their expected duties and tasks. Motivation is also used as a viable to promote the employees to improve their performance through making use of the best technology available. This is also aided by job rotation whereby cross functional teams are also in place to help the organisation to promote learning and sharing knowledge. Read More