Tuesday, December 27, 2005

The Innovation-through-Acquisition Strategy: Why the Pay-off Isn't Always There Prof Saikat Chaudhuri of Wharton writes an interesting article in this Konwledge@Wharton - which sets out to debate whether ot not an Innovation-through-Aquisition Strategy is a good one to follow or not. The shame is, whilst he makes some good points in describing the various risks of the strategy, he fails to make the most important analysis - the effectiveness of the strategy when compared to a strategy of Internal Innovation - and instead takes it as an all-or-nothing problem. In that respect, the dangers of innovation are exactly the same whether you're purchasing it outright from another company - or developing it internally. The very nature of innovation - essentially the management of new and unknown markets,products and processes - is rife with risk that needs careful analysis and development prior to full production - regardless of the source of that innovation. That's not to say that innovation shouldn't be done - but it needs to be done carefully and purposely - and analyzed and managed in the same way as any other business critical process would be.

It's an interesting read though - and well worth a quick gland at pages 2 and 4 to see what he sees as the Challenges, and the solutions to the problem.

No comments: