Scenarios RD in MNE

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Strategic Foresight in Biotechnology Firms
-Practice and Requirements-
Dana Mietzner and Prof. Dr. oec. Guido
Reger Centre for Entrepreneurship and Innovation
at the University of Potsdam, Germany
International Forum on Technology Innovation
and Technology Competitive Intelligence
Beijing Academy of Science and Technology
Peking University Beijing, October 16 - 18, 2008
www.professor-reger.de www.ceip.uni-potsdam.de
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Research Gap

• Investigations about the process design and
  degree of application of strategic foresight
  methods is still less investigated and discussed
  in the literature, especially for SMEs
• Investigations about the degree of the
  implementation of foresight methods refer
  predominantly to large-scale corporations (see
  Weber, 1990 Meyer-Schönherr, 1992 Burmeister,
  Neef, Albert, Glockner, 2002 Kreibich,
  Schlaffer, Trapp, Burmeister, 2002)
• Whether, and in which form, e.g., scenario
  analysis is used in small and medium sized
  companies, generally remains unanswered by the
  investigations
• To bridge this gap, 30 small and medium sized
  biotechnology companies were examined, within the
  scope of case study research

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Research Questions

• How important are strategic foresight activities
  in the Biotechnology firms?
• How is the early recognition of new markets and
  new technological developments and change carried
  out in the Biotechnology firms?
• Who is responsible for strategic foresight
  issues?
• Do companies use a systematic process for the
  early identification of new business
  opportunities?
• Which methods are used for strategic foresight?
  How are these methods implemented?

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Object of Investigation

• In the scope of this study are German
  Biotechnology firms, offering products and
  service, which can be outdated quickly
• The firms are positioned in small market niches
  with limited chances of growth in the local
  market
• This situation requires early internationalisation
  activities. In order to develop competitive
  advantages companies need to assess and analyse
  their own competencies, strategies of
  competitors, the importance of new technologies.

The aim of this study is to investigate how
Biotechnology firms apply foresight activities in
order to deal with the high complexity of the
environment and high speed of change.
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Concept Definition Services in red
Biotechnology
OECD 2005 List definition Single definition
Characteristic feature Integration of the
external factor
Definition Services
Definition Biotechnology
Services in red Biotechnology are all profit
oriented activities, which require the
integration of external factors and the use of
methods which are defined by OECD as
biotechnology techniques targeting to medical
applications.
Definition Red
ErnstYoung 2005 Medical Applications
see Reger, Mietzner, Nolting, 2008, 29
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Concept Definition Strategic Foresight

• Strategic foresight is defined as an integrated
  approach of early recognition of
• New technologies
• Upcoming competitors
• New markets
• Changing customer requirements
• Changing societal phenomena
• and the systematic integration of early
  recognition results into strategic planning.
• This definition emphasises the link from
  foresight to strategic planning.

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Concept Definition Strategic Foresight Process
Strategic Foresight Process
New Markets
Change in the environment
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Practice of Strategic Foresight Case Study
Research

• Analysis of the material by Qualitative Content
  Analysis
• Data is taken from texts (extracted raw data)
  which is processed in the next step and are then
  evaluated
• Based on the original texts (interview
  transcripts), a data base is established, which
  contains only information which is relevant to
  answer the research questions
• (see e.g. Glaser, Lauder, 2004, 194 Muhr, 1991a
  b 1996 Muhr, Friese, 2001)

• Case Studies in 30 German Biotechnology firms
• Interviewpartner CEO
• and/or head of marketing
• Implementation ofhalf-standardized interviews
• Other sources
• Business information
• Workshop minutes
• Appropriate websites
• Biotechnology newsletter
• Special interest magazines
• Patent search, consulting reports

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Qualitative Content Analysis Search Grid (I)
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Qualitative Content Analysis Search Grid (II)
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Strategic Foresight in Biotechnology Firms
Typologies
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Practice of Strategic Foresight in Biotechnology
Companies (I)
Science-driven approach (foresight per se) (4
Cases)

• Early diagnosis occurs in these firms, per se,
  because new technological trends and weak
  signals are perceived in a scientific
  environment, early, and are part of the daily
  work
• The persons active in these firms are, as a rule,
  scientists who are active in scientific networks.
  
• Customers scientists, scientific institutions
• Involvement in publicly financed research projects

"Foresight is part of the business model, because
scientists always observe new developments,
customers are in the academic market, so that new
developments are recognized early." (P31)

• Methods and Tools
• Simple bibliometric analysis (Qn)
• Publication analysis (H)
• Regular RD meetings (I)
• Internet search (H)

The interpretation of data is carried out
anonymously. P (number) hermeneutic unit
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Practice of Strategic Foresight in Biotechnology
Companies (II)
Network-oriented approach (9 Cases)

• The information procurement occurs preferentially
  in informal and also through formal networks of
  the employees (business development units,
  marketing and management)
• The information exchange within the firms occurs
  primarily informally (information exchange on
  call)
• Experimentally-driven
• Strategic foresight is in the responsibility of
  the head of the company
• Strengths Networks in which one also succeeds
  personal contacts in being based with
  pharmaceutical companies
• Weakness A lack of future orientation

• Methods and Tools
• Meetings (I)
• Observation of market- and customer
  developments (B)
• Internet search(H)
• Publication analysis (H)

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Practice of Strategic Foresight in Biotechnology
Companies (III)
Market-driven approach (10 Cases)

• Collection and systematisation of customer data,
  and competitive information
• Compilation of data occurs through sales
  employees
• Customer inquiries are implemented regulary
• Monitoring of customer inquiries
• Screening of websites
• Marketing or Business Development unit is
  responsible for foresight and reports to the head
  of the company (strategic foresight)

Customer conversations, the very best to 95 are
customer conversations." (P30).

• Methods and Tools
• Marketing-Controlling (Qn)
• CRM-System and market research data base (Q/Qn)
• Customer potential analysis Qn)
• Screening of websites (H)
• Evaluation of clients inquiries (Q)
• Portfolio analysis (Q/Qn)
• Market analysis (Qn)

• Internal brainstorming (I)
• Strategy meetings (I)
• SWOT analysis (I)
• Internet search (H)
• Publication analysis (H)

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Practice of Strategic Foresight in Biotechnology
Companies (IV)
Gatekeeper approach (3 Cases)

• CEO, CSO, Head of Technology, and/or Business
  Development act as gatekeepers
• Strongly experienced-driven
• Gatekeepers are strongly networked, e.g., in
  committees, within the scope of the networks,
  they screen trends and also form trends
• Information flows into an intuitive scenario
  analysis, which is combined with SWOT analysis
  and portfolio management
• The gatekeeper approach is characterised by a
  strong focus on observation of new and existing
  technologies and markets and marked as well by a
  relatively high future orientation in the
  strategic planning trial
• The gatekeeper approach describes a concept which
  fits best into the integrated definition of
  strategic foresight
• But it can be also become a risk if the foresight
  activities are only carried out by the
  gatekeepers, who manage the process of
  information access about risks and opportunities
  and develop a strong information power basis

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Practice of Strategic Foresight in Biotechnology
Companies (V)
Gatekeeper approach (3 Cases)

• Methods and Tools
• Scenario Analysis (I)
• SWOT Analysis (I)
• Brainstorming (I)
• Strategy workshops (External experts )
• Action plans (I)
• Internet search (H)

• Assessment of ideas with help of business plans
  (Q/Qn)
• Portfolio analysis (Q/Qn)
• Knowledge Management tool(in construction) (Qn/Q)

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Practice of Strategic Foresight in Biotechnology
Companies (VI)
Controlling-based approach (1 Case)

• Early diagnosis is based of changes in the
  income/expense overview, capacity usages, as well
  as on some qualitative indicators
• The goal of strategic foresight is, in this case,
  to contribute to the risk
• management, to recognize, i.e. risks early, and
  to initiate corresponding measures.

• Methods and Tools
• Foresight tool controlling tool (Qn)
• Internet search (H)

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Practice of Strategic Foresight in Biotechnology
Companies (VII)
No strategic foresight (3 Cases)

• Lack of strategic planning
• Lack of consiousness for strategic foresight
• The focus lies in the current satisfaction of the
  customer's needs, and to maintain the competitive
  position

"Our real major task is something else" (P14)
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Strategic Foresight in Biotechnology Companies
Strenght and Weaknesses (I)
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Strategic Foresight in Biotechnology Companies
Strenght and Weaknesses (II)
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Strategic Foresight in Biotechnology Companies
Strenght and Weaknesses (III)
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Practice of Strategic Foresight in Biotechnology
Companies
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Reasons for the Low Degree of Application of
Strategic Foresight Methods

• Low resources "We are a small company, we are
  focused on services. Our overhead is relatively
  small and the employees in the service
  departments in the company have a lot to handle
  in this respect our capacity to apply certain
  methods and to work with these methods is not
  available." (P13)
• No knowledge of methodology "Road Mapping? What
  is this? (P16)
•  
• Lack of preparedness "Scientists want to do
  science." (P18)
•  
• High expenses "Expenses and value are not
  comparable experience knowledge is preferred by
  us over methodological textbook knowledge." (P21)
•  
• Methods do not meet the specific requirements of
  the branch
• "I know all that, but we must also have
  something that fits our company." (P30)

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Strategic Foresight in Biotechnology Firms
Requirements (I)

• Specification and customisation of information
• Need for a strong support in the information
  gathering and systematisation in the beginning of
  the foresight process
• Biotechnology firms need reliable information
  about current and potential customers,
  competitors, distributors, regulations and
  relevant authorities, intercultural information
  with regard to their activities in foreign
  markets as well as general market data for
  selected foreign markets
• Need for information structuring and mapping of
  information
• Information need to be acquired and restored more
  systematically and need to be prepared for
  decision making in an ongoing process

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Strategic Foresight in Biotechnology Firms
Requirements (II)

• Integration of customised information with
  strategic planning methods
• Strategic planning methods (e.g., portfolio
  analysis, competitive analysis, market potential
  analysis) need to be interlinked with the
  information base
• High relevance of an ongoing monitoring of
  driving forces in order to be aware of change in
  the external environment What are possible
  future markets also outside current markets and
  current technologies?
• Integration of strategic foresight results and
  operative
• business activities
• Need for the fast transfer of foresight results
  into the operative business, into action plans
  and projects
• Foresight activities will only create acceptance
  within the firms, if there is a link to operative
  business activities and value creation

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Strategic Foresight in Biotechnology Firms
Requirements (III)

• Simple and efficient implementation of strategic
  foresight
• Due to limited resources companies expect an easy
  and efficient implementation of strategic
  foresight methods

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Conclusions (I)
Customised knowledge base for formal and informal
information and data

• Within the scope of a case study approach, six
  different forms of strategic foresight could be
  identified in the biotechnology firms
• Strategic foresight strongly characterized by
  formal and informal networks as the preferred
  approach of information gathering for strategic
  decisions, the degree of sophisticated method
  application is fairly low
• Need for suitable knowledge management solutions
  in the biotechnology firms as the fundamentals
  for strategic foresight and management
• The knowledge management system needs to be
  customised, since the investigated firms are
  still very heterogeneous with different
  information requirements
• Need for the implementation of informal
  information into the foresight process, which
  should be implemented by the systematic gathering
  and storage of informal information by
  gatekeepers and other persons in different
  functions
• Appropriate knowledge base will become the
  fundamentals for the implementation of strategic
  foresight methods, like e.g., scenario analysis

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Conclusions (II)

• Open Foresight
• To overvome the lack of resources Open
  foresight activities and initiatives in the way
  of common foresight projects, in a community
  together with a number of other biotechnology
  firms, research institutes, suppliers, policy or
  networks needs be implemented (see e.g., Reger,
  Mietzner, von Gizycki, 2007a b)
• Open foresight projects meet the observed network
  attitude of the biotechnology firms and allow the
  development of future-open-thinking
• Open Foresight experiences and future knowledge
  still need to be interlinked with the closed
  foresight and decision making process within the
  biotechnology firms

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Conclusions (III)

• Definition of Open Foresight
• Open Foresight can be described as the wider
  opening of the strategic foresight process.
• The outsourcing of foresight activities and the
  integration of companies and other market actors
  creates two key effects.
• The gathering and evaluation of information is
  based on a wider fundament
• Necessary ressources can be shared
• Future knowledge is generated in this approach
  outside the
• company in networks together with other market
  actors of the same
• or related branches, research institutes,
  networks and/or policy
• actors.

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Conclusions (IV)

• Foresight processes needs to be customised
• Firstly on the level of branches or segments and
• Secondly on the companies level
• There is not a one-size-fits-all approach of
  strategic foresight.

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Literature

• Burmeister, K., Neef, A., Albert, B., Glockner,
  H. (2002) Zukunftsforschung und Unternehmen.
  Praxis, Methoden, Perspektiven, Z_punkt (Hrsg.).
• Kreibich, R., Schlaffer, A., Trapp, C.,
  Burmeister, K. (2002) Zukunftsforschung in
  Unternehmen, Eine Studie zur Organisation von
  Zukunftswissen und Zukunftsgestaltung in
  deutschen Unternehmen, Sekretariat für
  Zukunftsforschung, Berlin.
• Meyer-Schönherr, M. (1992) Szenario-Technik als
  Instrument der strategischen Planung, Verlag
  Wissenschaft Praxis, Ludwigsburg, Berlin.
• Muhr, T. (1991). ATLAS.ti - ein
  Interpretations-Unterstützungs-System, in Fuhr,
  N. (Hrsg.), Informatik-Fachberichte Information
  Retrieval, Band 289, Springer Verlag, Berlin.
• Muhr, T. (1991) ATLAS.ti - A Prototype for the
  Support of Text Interpretation. Qualitative
  Sociology, 14, 349-371
• Muhr, T. (1996) Textinterpretation und
  Theorieentwicklung mit ATLAS.ti, in Bos, W.,
  Tarnai, C. (Hrsg.), Computerunterstützte
  Inhaltsanalyse in der Empirischen Pädagogik,
  Psychologie und Soziologie, Waxmann, Münster
• Muhr, T., Friese, S. (2001) Computergestützte
  Qualitative Datenanalyse, in Hug, T. (Hrsg.),
  Wie kommt Wissenschaft zu Wissen?, Einführung in
  die Forschungsmethodik und Forschungspraxis, Band
  2, Schneider Verlag, Hohengehren
• Reger, G., Mietzner, D., Nolting, M. (2008)
  Szenarioanalyse Dienstleistungen in der roten
  Biotechnologie (DLrBT), Shaker Verlag, Aachen.
• Reger, G., Mietzner, D., von Gizycki, T. (2007)
  Szenarioanalyse Bioanalytik und in vitro
  Diagnostik in Berlin-Brandenburg,
  Bestandsaufnahme und Handlungsempfehlungen,
  Shaker Verlag, Aachen.
• Reger, G., Mietzner, D., von Gizycki, T. (2007)
  Szenarioanalyse Weiße Biotechnologie in
  Berlin-Brandenburg - Bestandsaufnahme und
  Handlungsempfehlungen, Shaker Verlag, Aachen.
• Weber, K. (1990). Wirtschaftsprognostik,
  Vahlen, München.

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Contact
Prof. Dr. oec. Guido Reger Professor for
Innovation Management and Entrepreneurship Phon
e 49-331-977-3326 Email Guido.Reger_at_uni-potsdam
.de
Dana Mietzner Leader Research Group New Market
Intelligence and Technology Foresight Phone
49-331-977-4500 Email Dana.Mietzner_at_uni-potsdam.
de
Centre for Entrepreneurship and Innovation at the
University of Potsdam (BIEM-CEIP) Am Park
Babelsberg 14, D-14482 Potsdam, GERMANY
www.professor-reger.de www.ceip.uni-potsdam.de