IP Highlights from the article:
“Networking as a means to strategy
change: the case of open innovation in
mobile telephony”
Slides prepared by OI-Net team not the authors of
the article, with aim to be used as teaching
support
Dittrich, K., & Duysters, G. (2007). Networking as a means to
strategy change: the case of open innovation in mobile telephony.
Journal of product innovation management, 24(6), 510-521.
Co-funded by
the European Union
Ref. number: 542203-LLP-1-2013-1-FI-ERASMUS-ENW
Synopsis
o Longitudinal qualitative and quantitative research
to investigate the use of innovation networks to
deal with the changing environment of
technology.
o Studied Nokia Corporation’s R&D coalition
projects during 1985-2002, from the view of
exploitation and exploration strategies.
o Demonstrated use of OI strategies helped Nokia
to become and sustain market leader in mobile
telephone market.
Introduction
o Collaboration with external firms is the key to
deal with agility in high-technology markets.
o Study revolves around international innovation
networks developed by ICT firms.
o Research area: Scope of innovation networks in
adaptation to agile market condition
 Nokia’s collaboration strategy with whom, why and
on what
 Nokia’s use of networks to exploit current or explore
new skills for business transformation
Exploitation & Exploration in
Innovation Networks
Four Dilemmas of Exploitation and Exploration (Dittrich and Duysters, 2007)
Exploitation
Exploration
Indicator
Broaden existing
technological capabilities
Search for new
technological capabilities
Partners inside versus
outside core competence
Strengthen strong ties
Search for weak ties
New versus existing
partners
Trust/high commitment
Opportunistic
behavior/low commitment
One-time versus reciprocal
partnerships
Establishing equity
agreements
Establishing non-equity
agreements
JDAs and JRPs versus JVs
and RC
JDAs - joint development agreements; JRPs - joint research pacts; JVs - joint ventures;
RC - research consortia
Nokia’s Exploitation & Exploration
Strategies
Network Characteristics for Exploration and Exploitation Strategies
Characteristics
Exploitation
Exploration
Partners’ capabilities
Partners inside current
business
Partners with dissimilar
technologies
Type of partner
Known, familiar partner
New partner
Alliance type
Equity alliances
Non-equity alliance
Source: Dittrich and Duysters, 2007
Nokia’s Make-or-Buy Decision
o Core competencies: Mobile handsets,
Network technology, and middleware
o Decision to collaborate based on two
questions
 Ability to produce the technology faster alone?
 Standalone capability to product technology in
short time?
Nokia’s Exploitation & Exploration
Strategies in Innovation Network (1/4)
Nokia’s Innovation Network in the NMT and GSM Trajectory
(Dittrich and Duysters, 2007)
Nokia’s Exploitation & Exploration
Strategies in Innovation Network (2/4)
Nokia’s Innovation Network in the UMTS Trajectory (1997–2002),
Source: Dittrich and Duysters, 2007
Nokia’s Exploitation & Exploration
Strategies in Innovation Network (3/4)
Search for Capabilities in Innovation Networks
Domains
1985-1996*
1997-2002*
Computers
1 (4)
2 (4)
Software
4 (16)
22 (46)
Telecommunications
13 (52)
17 (35)
Microelectronics
4 (16)
1 (2)
Other
3 (12)
6 (13)
*Numbers in parentheses in percent (%)
Source: Dittrich and Duysters, 2007
Nokia’s Exploitation & Exploration
Strategies in Innovation Network (3/4)
New Partners in Nokia’s Innovation Network
1985-1996
1997-2002
39
52
New Partners
n. a.
48
Proportion of New Partners
n. a.
92.31%
Number of Partners
Non-equity versus Equity Agreements
1985-1996*
1997-2002*
Non-equity Agreements
20 (80)
42 (87)
Equity Agreements
5 (20)
6 (13)
*Numbers in parentheses in percent (%)
Source: Dittrich and Duysters, 2007
Conclusion
o The case of Nokia showed the importance of
strategic technology networks in international
environment for strategic repositioning under
the changing circumstances.
o These inter-company networks apparently
provide elasticity, pace, innovation, and the
agility to respond varying market needs and
new prospects.
Reference
o Dittrich, K. and Duysters, G., (2007),
“Networking as a means to strategy change:
the case of open innovation in mobile
telephony”, Journal of Product Innovation
Management, 24(6), pp.510-521.
Thank you!
More information
www.oi-net.eu
The OI-Net public content is licensed under a
Creative Commons Attribution-ShareAlike 4.0
Unported License.
OI-Net Coordinators
Lappeenranta University of Technology, Kouvola
Research Unit, Finland
o Marko Torkkeli
[email protected]
o Justyna Dabrowska
[email protected]
This project has been funded with
support from the European
Commission.
This publication reflects the views only
of the author, and the Commission
cannot be held responsible for any use
which may be made of the information
contained therein.
Programme: ERASMUS
# 542203-LLP-1-2013-1-FI-ERASMUS-ENW
13