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MANAGING PROJECTS

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Projects represent nonroutine business activities that often have long-term strategic ramifications for a firm. In this chapter, we examined how projects differ from routine business activities and discussed the major phases of projects. We noted how environmental changes have resulted in increased attention being paid to projects and project management over the past decade. In the second half of the chapter, we introduced some basic tools that businesses can use when planning for and controlling projects. Both Gantt charts and network diagrams give managers a visual picture of how a project is going. Network diagrams have the added advantage of showing the precedence between activities, as well as the critical path(s). We wrapped up the chapter by showing how these concepts are embedded in inexpensive yet powerful software packages such as Microsoft Project. If you want to learn more about project management, we encourage you to take a look at the Web site for the Proj...
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Business Strategy: Innovation and Entrepreneurship

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This chapter discussed various aspects of innovation and entrepreneurship as a business-level strategy.
The four-step innovation process from idea to imitation.
Innovation describes the discovery and development of new knowledge in a four-step process captured in the 4-I’s: idea, invention, innovation, and imitation.
The innovation process begins with an idea.
An invention describes the transformation of an idea into a new product or process, or the modification and recombination of existing ones.
Innovation concerns the commercialization of an invention by entrepreneurs (within existing companies or new ventures).
If an innovation is successful in the marketplace, competitors will attempt to imitate it.
Apply strategic management concepts to entrepreneurship and innovation.
Entrepreneurship describes the process by which change agents undertake economic risk to innovate—to create new products, processes, and sometimes new organizations.
Strategic entrepreneurship describes the pursuit of innovation using tools and concepts from strategic management.
Social entrepreneurship describes the pursuit of social goals by using entrepreneurship. Social entrepreneurs use a triple-bottom-line approach to assess performance.
The competitive implications of different stages in the industry life cycle.
Innovations frequently lead to the birth of new industries.
Industries generally follow a predictable industry life cycle, with five distinct stages: introduction, growth, shakeout, maturity, and decline.
Exhibit 7.9 details features and strategic implications of the industry life cycle.
Strategic implications of the crossing-the-chasm framework.
The core argument of the crossing-the-chasm framework is that each stage of the industry life cycle is dominated by a different customer group, which responds differently to a new technological innovation.
There exists a significant difference between the customer groups that enter early during the introductory stage of the industry life cycle and customers that enter later during the growth stage.
This distinct difference between customer groups leads to a big gulf or chasm which companies and their innovations frequently fall into.
To overcome the chasm, managers need to formulate a business strategy guided by the “who-whatwhy-and-how” questions of competition.
Different types of innovations in the markets-and-technology framework.
Four types of innovation emerge when applying the existing versus new dimensions of technology and markets: incremental, radical, architectural, and disruptive innovations (see Exhibit 7.10 ).
An incremental innovation squarely builds on an established knowledge base, and steadily improves an existing product or service offering (existing market / existing technology).
A radical innovation draws on novel methods or materials, is derived either from an entirely different knowledge base or from the recombination of the existing knowledge base with a new stream of knowledge (new market / new technology).
An architectural innovation is an embodied new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets (new market / existing technology).
A disruptive innovation is an innovation that leverages new technologies to attack existing markets from the bottom up (existing market / new technology).
The long-tail concept and derive its strategic implications.
Firms digitize their offerings to leverage the Internet as a disruptive force.
The long tail describes a business model in which companies can obtain a significant part of their revenues by selling a small number of units from among almost unlimited choices.
Compare and contrast closed and open innovation.
Closed innovation is a framework for R&D that proposes impenetrable firm boundaries. Key to success in the closed innovation model is that the firm discovers, develops, and commercializes new products internally.
Open innovation is a framework for R&D that proposes permeable firm boundaries to allow a firm to benefit not only from internal ideas and inventions, but also from external ones. The sharing goes both ways: some external ideas and inventions are in-sourced while others are spun-out.
Exhibit 7.14 compares and contrasts principles of closed and open innovation.

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