8. Innovation Strategy as the Management of Competencies

The chapter 'Innovation Strategy as the Management of Competencies' focuses on the strategic development of a firm's competency portfolio. It begins by emphasizing the importance of classifying and assessing competencies, using visual tools like bubble charts to map and plan the portfolio. The text discusses the challenges and trade-offs involved in developing competencies, such as the balance between time, economic appropriability, and the firm's understanding of new competencies. It also delves into the organizational aspects, including the potential resistance to change and the need for a balanced top management team. The chapter highlights the role of R&D in competency development, exploring its advantages and disadvantages, as well as the organizational structures that support effective R&D management within large firms. Throughout, the text offers a detailed and practical guide to managing competencies strategically, making it a valuable resource for professionals seeking to enhance their firm's competitive edge.