How to turn innovations into value in a large manufacturing company

University essay from Blekinge Tekniska Högskola/Institutionen för industriell ekonomi; Blekinge Tekniska Högskola/Institutionen för industriell ekonomi


Large companies invest a vast amount of capital and time on R&D annually. With all this financial investment in R&D, it is important that the companies get value for their invested capital. By creating innovations, such as new products and services, involve high risk and will necessarily not lead to successful commercial ends. Many companies lack the competencies in selecting ideas and transform them into value. Knowledge in innovations is affecting companies, especially those that are investing heavily in R&D. The present study explain how value can be created from innovation around the topics of innovativeness, innovation protection and market efficiency, within a large global manufacturing company in Sweden with global operations. A four dimensional measure from a prior study has been the base for the structural theoretical model that has been tested. The authors have divided innovativeness, innovation protection and market efficiency into absorptive capacity (ACAP), open innovation, patents, secrecy, lead time advantages and complementary assets and studied modern literature to find relationships between these and how it affects firm performance. They have also done a survey and interviews to examine the present status in a large manufacturing company. The empirical findings show support for a relationship between ACAP and firm performance, ACAP and success of strategic alliances as well as a relationship between protection of innovation and success of strategic alliances.

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