Extracting Value from Corporate Venturing Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Starting a new venture outside the core business of the corporation is risky and failure prone, however, it is often seen as vital to innovation and organic growth. Can investments in new businesses to add value to the company, despite the risks? To explore this question, the authors conducted in-depth study of corporate venturing in Nokia Corporation between 1998 and 2002. Study yielded a number of lessons about corporate venturing. For example, Nokia has found that looking at the success or failure of a particular project, as the business was not the way to evaluate the effectiveness of venturing program. If they succeeded, as a business, Nokia corporate businesses often add significant opportunities for the core business, such as familiarity with the new segment of customers for the company. In fact, seemingly unrelated investments sometimes led to technologies that would later benefit the core business of the company. The authors come to the conclusion that to extract the value of corporate enterprises, companies must use different control than existing plants, the structure of the new company, so that they do not face pressure to deliver immediate results, and emphasize learning. While 70% of Nokia corporate venture investments during the period studied were either completed or fully denied, capabilities and technologies developed however, play an important role in the main activities of the company to respond to changes. "Hide
by Rita Gunther McGrath, Thomas Keil, Mystery Tukiaynen Source: MIT Sloan Management Review 7 pages. Publication Date: 01 Oct 2006. Prod. #: SMR224-PDF-ENG