There are only three questions in this assignment
Internal market for innovation functions
How is the process of innovation managed?
The financial data concerning revenue, net income, revenue per customer and profit margins is obviously incorrect. For example, 50 customers averaging $4 million per customer would generate more than the $166 million presented, and 17% pretax margins would produce more than $10.8 million in net income on even $166 million in sales. A footnote on page 1 states that data in the case have been disguised.
How does the internal market for innovation function?
The internal market is based on two opposing elements within the organization. The company has a very good internal communications system that is in turn based on cooperation, and competition between units and teams. The entire structure is very innovative and very effective.
The first elements are teams and units. There are fourteen factories located worldwide. There is some product overlap between them, but each operates independently and must be able to supply identical product to a customer anywhere in the world. Each product supplied to a single customer and each has an individual team to support it. Both the factories or units and the teams compete based primarily on customer service and efficiency in producing the particular product it is involved with. Each factory is organized as a company with a board of directors composed of managers of other facilities. There is therefore an internal marketplace for the exchange of ideas.
Nypro is process driven. The products are developed to individual customer specifications and used as components in products the customer produces and markets. There is no opportunity to produce a new innovative product that would then be marketed on its own. There is therefore no real marketing competition between the teams or units.
The teams and units are judged on elements such a...