Strategy transformation through strategic innovation capability – a case study ofFanuc

Abstract

This paper presents a theoretical framework under which large companies should be able to bring about strategy transformation. First, we present the concept of ‘strategic innovation capability’, a corporate system capability to achieve corporate strategy transformation by strategic innovation. Then, we consider strategic innovation capability by comparing it with previous theories (dynamic capability, major innovation, dynamic capability, breakthrough innovation capability). Second, we present the case example of strategy transformation at Fanuc, a company that holds the top global share in the numerical control (NC) market. In this case study research, we consider and analyze historically how the company aimed for new creativity in the NC market, developed innovative NC technology for the machine tool market, and used that technology energetically for commercialized products. From the strategic innovation capability framework, the core theory of this paper, we also analyze and consider how top management made conscious efforts to form a new development organization within the company, and the processes involved in achieving strategy transformation to establish competitive superiority in this field. Finally, we discuss the implications drawn from this case analysis, and the issues for future research.

SME Roles in Modular Value Chains: Perspectives for Growth and Innovativeness

“…ITServCo's governance position well matches the characteristics of a model contract producer firm in modular value chains with some component of relational governance. Alike in the SoftCo's case, this observation gives a new insight relative to the GVC literature that describes contract producers as predominantly large enterprises (Sturgeon, 2002;Ivarsson & Alvstam, 2011;Kodama & Shibata, 2013Yan et al, 2014. Some discrepancies exist as the elements of the former focus of the company who was a third-tier supplier in the captive governance, e.g., low transaction complexity still present in "time and material" method of outsourcing.…”

“…This finding challenges the GVC literature, in which the lead role is predominantly attributed to large companies (Sturgeon, 2002;Ivarsson & Alvstam, 2011;Kodama & Shibata, 2013;Yan et al, 2014). Minor inconsistencies stem from less formalised transactions due to the need to exchange an intense and partially not codified information with customers for whom the firm develops more risky innovations.…”

“…The extant literature on global value chains (GVCs) has focused on large firms as major players and sources of product and process innovation in modular value chains (Sturgeon, 2002;Ivarsson & Alvstam, 2011;Lee & Saxenian, 2008;Kodama & Shibata, 2013;Simms & Trott, 2014;Yan et al, 2014;Pietrobelli & Rabellotti, 2006). The impact of the value chain modularisation on the positions as well as pro-spects for growth and innovation of SMEs has been unexplored.…”

“…Majority of studies focus on large corporations and on the cases of upgrading of the entire industries (Ivarsson & Alvstam, 2011;Lee & Saxenian, 2008;Kodama & Shibata, 2013;Simms & Trott, 2014;Yan et al, 2014). Also, the extant research on SME growth is inconclusive about the impact of networks in this process and it does not comprehensively highlight how they accomplish expansion when operating in networks and global value chains.…”

“…The increasingly important trend of modular product development, design and engineering strongly impacted SME participation in global production networks and global value chains (GVCS) (Baldwin & Clark, 2000;Sanchez & Mahoney, 1996;Lau, 2011;Langlois, 2002;Sturgeon, 2002;. The positions (roles) of SMEs in modular value chains (MVCs) as well as their prospects for innovativeness and growth are under-researched, since the literature on modularity in the organisation of industries and networks focuses on large enterprises as major players in the global governance (Sturgeon, 2002;Ivarsson & Alvstam, 2011;Lee & Saxenian, 2008;Kodama & Shibata, 2013;Simms & Trott, 2014;Yan, Chiang, & Chien, 2014;Pietrobelli & Rabellotti, 2006). Moreover, there is a controversy in two important literature streams as to development prospects for SMEs in global networks.…”