Stamypor Case Analysis
Autor: Maximos Petrocheilos • March 11, 2015 • Case Study • 1,542 Words (7 Pages) • 2,974 Views
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What type of innovation is Stamypor?
Christensen differentiates between sustaining and disruptive [a]technologies (2006). He identifies effect on performance of current business activity (improvement and worsening, respectively) as the main distinguishing feature between both (2006). Stamypor is unlikely to have a negative or disruptive effect on DMS’s current business activity, since it is a new technology in a market, which, while already in existence, has so far remained untapped by DSM, and, thus, cannot eat away at current activity. Conversely, Stamypor does target mainstream customers in major markets - a feature of sustaining technologies, as illustrated by Christensen (2006).
Within the domain of ‘sustaining innovation’ both incremental and radical innovation can occur (Christensen, 2006). Stamypor can be assumed to be a radical innovation because the technology is completely new (evident through existence of patent) and denotes a departure from extant practices in mixing plastic with additives (Dewar & Dutton, 1985).
DSM operates three business clusters, one of which is active in Polymers & Industrial Chemicals (P&IC). It engages mainly in oil & gas based intermediary products. Since Stamypor is a porous polyethylene which will be applied as an intermediary, its resulting relatedness to this cluster has been a major influence on the decision to continue the stage gate process of this innovation. Considering the company derives approximately 40% of its revenues from the P&IC cluster, there must be an existing market for oil & gas based intermediary products. Presumably, even though not explicitly stated, the resin conversion value chain represents an extension of said existing market.
Stamypor, while related to the P&IC cluster, is a new technology, as exhibited by the fact that enjoys patent protection. Thus, Stamypor is situated in the top row and middle column of the Ansoff’s Matrix. This further underpins the aforementioned notion of radicalness.
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Is a separate NBD unit an optimal solution for DSM?
DSM was facing a number of pressures (Appendix A) which led it to establish their New Business Development unit (NBD). NBD operates as a separate legal entity and, thus, is not only in line with Baden-Fuller and Volberda’s functional and legal outsourcing of exploration (1997) but is also an effort of structural ambidexterity (Tushman & O’Reilly, 1996). According to Burgelman & Välikangas, DSM’s strategy of forming a new business unit and committing financial and managerial resources to it, is All-Out ICV (2005). The pressures outlined in Appendix A illustrate that DSM considers its mainstream business prospects insufficient.
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