Corporate Venture Strategies

Why Venture Strategies?

The most successful companies are those that have developed aggressive venture strategies and have made ventures critical components of their strategic and operating success. For today's corporations, traditional internal expansions, efficiency improvements and "synergistic" acquisitions are no longer sufficient sources of growth in most industry segments that had grown crowded and hypercompetitive. The new challenge is to search for emerging "white space" opportunities, "new-business creations that would meet the unmet, unserved needs of customers in emerging markets."¹

In ventures, large and midsized companies can discover a source of growth they are striving to achieve. New business creation has become central to achieving strategic and financial objectives of market champions. "Silicon Valley wouldn't exist if big companies couldn't identify technology and market opportunities and move with speed to capitalize on them", says Mike Moritz of Sequoia Capital Partners.

Competitive Strategies

• Technology Innovation

  • Survival Strategy: Incremental innovation

  • Market Leadership Strategy: Radical innovation & Venture strategies... More

3 Strategies of Market Leaders

The market leader is dominant in its industry and has substantial market share. If you want to lead the market, you must be the industry leader in developing new business models and new products or services. You must be on the cutting edge of new technologies and innovative business processes. Your customer value proposition must offer a superior solution to a customers' problem, and your product must be well differentiated... More

Venture Acquisitions

In today's era driven by systemic innovation, acquiring and integrating capabilities, know-how, and technologies has become an efficient route to growth and a strong alternative to internal research and product development. Acquisition and integration of ventures is an effective method for supplementing a product and business portfolio with the best available technology, as well as enter emerging markets, with speed.

The Art of Innovation: 9 Truths

By: Guy Kawasaki

• Jump to the next curve. Too many companies duke it out on the same curve. If they were daisy wheel printer companies, they think innovation means adding Helvetica in 24 points. Instead, they should invent laser printing. True innovation happens when a company jumps to the next curve – or better still, invents the next curve, so set your goals high... More

Spinouts

By 2000, spinouts, a new form of creating and financing a high-tech company has become very popular. This novel approach has a number of advantages over a merger or acquisition and it plays an increasingly high role for high-tech companies.

A spinout enterprise differs from a spin-off. Spinouts remain closely tied to the company that developed them. In most cases, the ties are both financial and operational. Financial ties can be enforced through interlocking of stock ownership and financial oversight by the parent company. Operational ties may include shared professional and administrative services as well as marketing and leadership support.

New ventures established as independent companies can more readily fulfill their potential. In this case, the entrepreneurs do not have to argue with superiors or put up with interference... More

In-Company Ventures

To achieve their growth objectives through in-company ventures or in-company startups, many corporation may need to change their mindset and organization concept, loose controls and provide an enabling environment to empower the venture manager. They need also to adopt the business systems approach to managing projects aimed at development of innovative products or services... More

Corporate Investing in External Ventures

External venture investing in new technologies and emerging markets has become a vital component of corporate strategies in the new economy driven by small innovative firms. Partnership between small innovative firms and large corporation is mutually beneficial. While entrepreneurial companies can identify  technology and market opportunities and move faster to capitalize on them, they can achieve enormous leverage through technology and distribution agreements with large global corporations. Herein lies strategic opportunity for large corporations.

In United States in 1994, only 2% of venture capital investments was corporate venture capital, but in 2000, corporate venture capital accounted for 17%, nearly $20 billion... More