research@hec - Issue #14 - (Page II)

Strategic Innovation research Bertrand Moingeon is Accessible to All REWRITE THE RULES OF THE GAME… Strategic innovation refers to an inclusive approach to innovation, where you focus simultaneously on a product, a technology, and a process. It implies making up new rules for an established industry and introducing radical innovation in one or several of the three areas that compose a business model. •The value proposal, which describes the strengths of the product and/or service offer and defines the target group. • The value architecture, which indicates how the company uses its resources to produce and deliver its value proposal to prospective customers. It consists of an internal value chain (what the company does itself) and an external value chain (suppliers, subcontractors, distributors, etc.). • The profit equation, which shows how the company generates revenue (the value proposal) as well as its cost and capital structure (a result of choices related to its value architecture). … WITHOUT NECESSARILY RELYING ON NEW TECHNOLOGIES Moingeon and Lehmann-Ortega have focused their research on strategic innovation realized not in start-ups, but rather in established companies that have achieved renewal without getting involved in new technologies. They drew on approximately twenty extensive case studies to show that it is possible—though difficult—for companies to create new business models; it requires altering mindsets and predominant thought processes. This is between Grameen Bank and Danone. Strategic innovation does not necessarily imply a start-up or a new technology. they open their minds and think in genuinely different ways. They must also be Established companies can generate new and profitable business models, provided willing to carry out small scale experiments to test new ways of doing business. Consider the experience of secure transportation firm Valtis and the joint venture hec Laurence Lehmann-Ortega BIOGRAPHIES Bertrand Moingeon has been deputy dean of HEC Paris since June 2007 and a strategic management professor at the school since 1992. Laurence LehmannOrtega is affiliate professor in HEC’s executive education division. VALTIS: DISARMING INNOVATION… Philippe Régnier is the managing director of Valtis, a secure transportation company, where, like every other firm in the sector, a team of armed guards transport cash and valuables in armored vehicles. Deeply disturbed by the death of a guard during a truck hold up, Regnier vowed to come up with a better, attack-deterring system. Instead of looking for ways to protect vehicle content, he focused in on eliminating the temptation triggered by the sight of an armored truck. The result was a straightforward scheme called Axytrans, where unarmed guards transport suitcases of cash or valuables in unmarked cars. If a suitcase is perceived to deviate from the foreseen itinerary, a computerized system inside of the suitcase releases red ink, staining the currency and essentially destroying it a fraction of a second. … IMMEDIATELY POPULAR AMONG CUSTOMERS In addition to the innovative “ink-emitting GSP” system, Axytrans unquestionably involves a new a huge challenge, especially for historically successful firms. Instead of engaging in a “single” learning curve, where business fundamentals are not actually called into question, they must tackle a “double” learning curve, which implies radically revising habitual industry practices and rules. The case of Valtis offers an excellent illustration of this phenomenon. II research@hec • April-May 2010

Table of Contents for the Digital Edition of research@hec - Issue #14

Cover & Contents
- Strategic Innovation is Accessible to All
- Auctioned IPOs : Breaking Underwriter Dominance
- The Independence and Competence of Auditors
- The Just Hand of theManager

research@hec - Issue #14