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Case
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Reference no. 9-608-108
Published by: Harvard Business Publishing
Originally published in: 2008
Version: 23 April 2008
Length: 27 pages
Data source: Field research

Abstract

The executive team at Corning has committed to double the rate of new business creation per decade, while at the same time growing the company''s current businesses, including glass substrates for liquid crystal displays (LCD). Their strategy, built on more than 150 years of successful innovation, is to invent ''keystone components'' which uniquely enable other companies'' products and earn high margins from its proprietary technology. As part of the company''s mission to be around for another 150 years, the executive team is also committed to devote considerable resources to basic research ''in faith'' that it will create new, high-margin businesses that will drive corporate growth in 10-20 years and enable the company to ''reinvent'' itself, even though they will not be around to reap the benefits of this investment. The executive team must choose how to allocate finite research, development and engineering resources between: (1) ''pushing'' one, or more, of four brand new businesses with considerable potential in the development pipeline to the market sooner; (2) allocating more resources to six new products being launched from existing businesses; or (3) spending more on exploratory research. In making these decisions, the executive team must consider the impact of their decision on not only near-term earnings, but on how it will enable Corning to diversify over the medium to long term in terms of the quality and quantity of its portfolio of new technologies in the development pipeline and new businesses being launched, especially so that it is not overly dependent on sales of a particular business like LCD glass.
Size:
US$6 billion revenues
Other setting(s):
2007

About

Abstract

The executive team at Corning has committed to double the rate of new business creation per decade, while at the same time growing the company''s current businesses, including glass substrates for liquid crystal displays (LCD). Their strategy, built on more than 150 years of successful innovation, is to invent ''keystone components'' which uniquely enable other companies'' products and earn high margins from its proprietary technology. As part of the company''s mission to be around for another 150 years, the executive team is also committed to devote considerable resources to basic research ''in faith'' that it will create new, high-margin businesses that will drive corporate growth in 10-20 years and enable the company to ''reinvent'' itself, even though they will not be around to reap the benefits of this investment. The executive team must choose how to allocate finite research, development and engineering resources between: (1) ''pushing'' one, or more, of four brand new businesses with considerable potential in the development pipeline to the market sooner; (2) allocating more resources to six new products being launched from existing businesses; or (3) spending more on exploratory research. In making these decisions, the executive team must consider the impact of their decision on not only near-term earnings, but on how it will enable Corning to diversify over the medium to long term in terms of the quality and quantity of its portfolio of new technologies in the development pipeline and new businesses being launched, especially so that it is not overly dependent on sales of a particular business like LCD glass.

Settings

Size:
US$6 billion revenues
Other setting(s):
2007

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