Living Innovation by Sang M. Lee

Author:Sang M. Lee
Language: eng
Format: epub
ISBN: 9781787567153
Publisher: Emerald Publishing Limited
Published: 2018-08-15T16:00:00+00:00

6.3.2.3. Organizational Convergence

Organizational convergence is intended for value chain innovation through the fusion of different organizations. Organizational convergence is closely related to collaborative innovation in the evolution of innovation discussed in the previous chapter. The lead organization focuses only on its core competencies and partner firms contribute their own strengths to the value chain. Nike is not just a great athletic shoe manufacturer. Nike focuses on brand management, R&D, marketing, its core strength areas, and most other functions are outsourced to the world’s best partners. This arrangement is called value organization. In the past, value was manufactured, but now the best value is created through active collaboration. Apple and Vizio are also good examples of companies that concentrate on product design innovation and marketing and outsource all other activities.

One of the reasons why organizational fusion has been highlighted is the need for disruptive innovation. When a company forms a new customer base through disruptive innovation and enters the existing market, it will face the following decision-making situations.

Do we respond through our existing organization or create a new and independent organization?

Do we imitate the successful innovations implemented by others or rely on our new disruptive innovation?

Do customers in the new market formed by disruptive innovation represent inroads into the existing customer base or create a totally new customer base?

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