Identification and evaluation of corporations for merger and acquisition strategies using patent information and text mining

This paper proposes a framework to identify and evaluate companies from the technological perspective to support merger and acquisition (M&A) target selection decision-making. This employed a text mining-based patent map approach to identify companies which can fulfill a specific strategic purpose of M&A for enhancing technological capabilities. The patent map is the visualized technological landscape of a technology industry by using technological proximities among patents, so companies which closely related to the strategic purpose can be identified. To evaluate the technological aspects of the identified companies, we provide the patent indexes that evaluate both current and future technological capabilities and potential technology synergies between acquiring and acquired companies. Furthermore, because the proposed method evaluates potential targets from the overall corporate perspective and the specific strategic perspectives simultaneously, more robust and meaningful result can be obtained than when only one perspective is considered. Thus, the proposed framework can suggest the appropriate target companies that fulfill the strategic purpose of M&A for enhancing technological capabilities. For the verification of the framework, we provide an empirical study using patent data related to flexible display technology.     

Partnership ecosystem of IC design service companies: The case of Taiwan

The continuously evolving IC industry has driven IC design service companies to become the niche players in the semiconductor value chain. These emerging companies, mostly SMEs, manage the entire chip development manufacturing process and apply third party's resources when and where its customers need them. To keep the customer as their main focus and deliver what the customer truly needs, a strong and committed partnership ecosystem is more important than ever.The objective of this paper is to provide a better understanding of the partnership ecosystem of Taiwan's IC design service companies. A co-evolutionary theory in the business ecosystem is used as a theoretical background to explain the relationship in the investigated partnership networks. The partnership networks of the IC design service companies were analyzed together with the corporate data such as revenues and milestones. The findings show that the firms have accumulated and created their competitive advantage by forming strategic alliances with various leading foundries, IP vendors, and EDA tool providers to leverage their technological capabilities. While the production ecosystem was localized in Taiwan based on the benefit of the complete value chain, the IP ecosystem was more internationalized.The existing networks provide a new insight into opportunities for new entrants even in the highly competitive environment like the semiconductor industry. This study contributes to the understanding of the characteristics of the niche players. It will be useful as policy implications for the industry stakeholders and governments to setup direction for further support and investment in the IC design service business.     

Can technology lead to a competitive advantage? A case study of Flanders using european patent data

The study tries to analyze regional technological capabilities, linking technological positions to economic strength of the region. To measure this link, we correlate the EPO patent data with trade data to assess the degree to which technological advantages are translated into comparative advantages for the Flemish region in Belgium. The analysis for Flanders provides some interesting insights. Following the skewed distribution of firms, the technological areas in which Flanders is able to build, a strong position are very specific: printing technology, weaving technology, photography and recently also telecommunications. Weak positions are outspoken in car technology. Linking these strengths and weaknesses in technological areas to economic activity revealed an important mismatch between both. Most of the Flemish patents are in sectors without any comparative advantage, while most of the sectors where Flanders does hold a comparative advantage, like chemicals and pharmaceuticals, do not show strong technological advantages in terms of patents. Given the mismatch that was detected between technological positions and economic advantages, it is of crucial importance to better understand the (missing) links between the various actors in the regional innovation system. The analysis points out two important issues. The large and growing number of foreign applications to Belgian/Flemish inventors and the large number of subsidiaries of foreign firms among Belgian/Flemish applications illustrate the pervasiveness of the foreign dimension in the Belgian/Flemish technological landscape. Also very specific to the Belgian/Flemish situation, is the limited importance of universities or research centers in terms of patenting activities.     

Technological catch-up in the biopharmaceutical sector: Evidence from Iran

This paper addresses the market and technological capabilities required for technological catch-up in the biopharmaceutical sector using a multi-case study method. The paper reveals that the firms that are catching up in biopharmaceuticals first developed their production capabilities (including API production, formulation and obtaining health approvals), then entered the process innovation. Iranian companies have locally re-produced existing products in the market in exact accordance with global standards, and then entered into the introduction of new strains by intensifying their R&D efforts. The paper observes that the existence of strong R&D efforts from the early stages is a prerequisite for technological growth. It also argues that assimilated migratory knowledge can not only complement indigenous efforts, but also stimulate further technological capability-building efforts by local firms. The paper shows that technological development in the Iranian biopharmaceutical industry was firstly geared towards the home market, which we refer to as the ‘test-bed’, before entering into international markets. A key strategic point here is that, despite the maximum use of domestic market capacity, our study considers it necessary to try to enter international markets. Therefore, presence in these markets and the development of capabilities in the biopharmaceutical industry are two blades of a pair of scissors.     

Measuring technological diversification: identifying the effects of patent scale and patent scope

Although technological diversification is an important strategic decision for both large and small firms alike, the conventional method of measuring such diversification may well introduce significant scale bias against small- and medium-sized firms. We examine this issue in this study using a sample of 73 Taiwanese integrated-circuit (IC) design firms covering the period from 1995 to 2007 and conclude that the conventional measure of technological diversification reflects the spread or distribution amongst technology classes of a company’s current technology portfolio, and does not capture the incremental expansion in technological scope, or the ‘dynamic act of diversification’, as reflected in our alternative scope measure. Our results suggest clear constraints on the applications made under the conventional index, particularly for firms with small patent scale.     

A quantitative investigation of the technological innovation in large construction companies

The construction industry is considered as backwards and lack of innovation. The main driving power of technological innovation in the construction industry is large construction companies. However, the driving process of technological innovation in them has not been fully investigated in previous studies. This study constructs a quantitative model to explore the technological innovation driving process of large construction companies considering the key influencing factors for technological innovation. The sample data are the 57 large construction companies selected from the world's largest construction market – China. The results show significant positive correlation between innovation input and innovation output, and between innovation output and performance. The operational capacity of the companies is positively correlated with innovation input, whilst the capital structure is negatively correlated with innovation input. The technical employees have a positive impact on the performance. The underlying reasons are discussed and suggestions are given for the construction industry to improve the technological innovation capacity of construction companies. This research contributes to the literature of construction innovation and benefits practitioners by providing a quantitative approach to demonstrate the driving power of large construction companies for technological innovation.     

Work assignment to and qualification of multi-skilled human resources under knowledge depreciation and company skill level targets

Assigning work to human resources is an important and common task for companies with high labour intensities. It is particularly complex if the human resources have multiple skills and if their efficiencies change due to learning and depreciation of knowledge depending on the tasks they are assigned to. In this context, up to now, only little work has considered strategic targets for company skill levels. Hence, we present an optimisation model to address the problem of assigning project work to multi-skilled internal and external human resources while considering learning, depreciation of knowledge and company skill level targets. This constrained nonlinear continuous model is solved using COIN-OR's Ipopt. We assess the computation time and the impacts of problem parameters such as the shape of the learning curve, company skill level targets, depreciation of knowledge and cost parameters. Amongst other findings, our results show that faster learning of human resources leads to more specialised individuals while at the same time the whole company's knowledge is broadened.     

Entwicklungen und Trends in der Beschichtungsindustrie

The technological development of PVD‐Coatings within the past decades opened a broad market with large growth rates. Besides the traditional segment for cutting tools increasingly markets like punching and forming and the mass production of component parts turned into the center of interest. After years of large growth with increased stress of competition the product portfolio and productivity has to be adapted to the strategic orientation of the respective companies.     

NEW REGULARIZATION BY TRANSFORMATION FOR NEURAL NETWORK BASED INVERSE ANALYSES AND ITS APPLICATION TO STRUCTURE IDENTIFICATION

The present authors have been developing an inverse analysis approach using the multilayer neural network and the computational mechanics. This approach basically consists of the following three subprocesses. First, parametrically varying model parameters of a system, their corresponding responses of the system are calculated through computational mechanics simulations such as the finite element analyses, each of which is an ordinary direct analysis. Each data pair of model parameters vs. system responses is called training pattern. Second, a neural network is iteratively trained using a number of training patterns. Here the system responses are given to the input units of the network, while the model parameters to be identified are shown to the network as teacher data. Finally, some system responses measured are given to the well-trained network, which immediately outputs appropriate model parameters even for untrained patterns. This is an inverse analysis. This paper proposes a new regularization method suitable for the inverse analysis approach mentioned above. This method named the Generalized-Space-Lattice (GSL) transformation transforms original input and/or output data points of all training patterns onto uniformly spaced lattice points over a multi-dimensional space. The topological relationships among all the data points are maintained through this transformation. The neural network is then trained using the GSL-transformed training patterns. Since this method significantly remedies localization of training patterns caused due to strong nonlinearity of problem, the neural network can learn the training patterns efficiently as well as accurately. Fundamental performances of the present inverse analysis approach combined with the GSL transformation are examined in detail through the identification of a vibrating non-uniform beam in Young's modulus based on the observation of its multiple eigenfrequencies and eigenmodes.     

Technological Diversification Through Corporate Venture Capital Investments: Creating Various Options to Strengthen Dynamic Capabilities

Corporate venture capital (CVC) investment in technology-intensive entrepreneurial ventures has attracted increasing attention from established firms which recognize it as a useful learning investment strategy to create diversified technological options for future change. However, there is a lack of empirical research which examines the relationship between CVC investment and the corporate investors' technological diversification. In this study, we investigate the effects of CVC investments on corporate investors' technological diversity by using 20 years of panel data from corporate investors in five high-tech industries. As a result, we find that the total amount of CVC investments and the industrial diversity of portfolio companies exhibit curvilinear (inverted U-shape) relationships with the corporate investors' technological diversity. Moreover, the empirical results show that the absorptive capacity of corporate investors positively moderates the effects of CVC investments on the technological diversity.     

An empirical evaluation of industry 4.0 applications of companies in Turkey: The case of a developing country

The main purpose of this paper is to investigate Industry 4.0 applications in companies of Turkey, a developing country. It also aims to determine how the following factors affect the level of Industry 4.0 applications: technological level of products manufactured, the presence of an R&D department, and the size of the company. A specially-designed questionnaire was used in the survey. According to the results of our research, it can be stated that companies that produce highly technological products are more likely to develop Industry 4.0 applications and to implement Industry 4.0 technologies. If companies of developing countries expense more for R&D, it is expected that their readiness for Industry 4.0 transformation will also be higher. According to our survey, productivity is the main benefit expected by Industry 4.0 applications and lack of technical skills and expertise is one of the most important challenge of Industry 4.0 transformation of companies in Turkey.     

The beauty of brimstone butterfly: novelty of patents identified by near environment analysis based on text mining

The novelty of a patent may be seen as those patterns that distinguishes it from other patents and scientific literature. Its understanding may serve for many purposes, both in scientometric research and in the management of technological information. While many methods exist that deal with a patent’s meta-information like citation networks or co-classification analysis, the analysis of novelty in the full text of a patent is still at the beginning of research and in practice a time-consuming manual task. The question we pose is whether computer-based text mining methods are able to identify those elements of such a patent that make it novel from a technological and application/market perspective. For this purpose we introduce and operationalize the concept of near environment analysis and use a three-step text mining approach on one of the patents nominated as finalist in the 2012 European Inventor Award contest. We demonstrate that such an approach is able to single out, content-wise in a near environment, the novelty of the patent. The method can be used also for other patents and—with adaption of the near environment analysis—for scientific literature.     

Empirical study of the relationship between operations strategy and information systems strategic orientation in an e-commerce environment

Many corporate executives are convinced that today's e-commerce operations require a fundamental review of business strategy. Operations management researchers also call for substantiating operations strategy research to an e-commerce environment. However, no empirical research has explored information systems strategic issues using operations strategy theory. Drawing on both operations strategy and the information systems strategy literature, this exploratory research proposes a conceptual framework integrating both operations strategy and information systems strategy models, and then applies this new proposed framework to an e-commerce setting. This research not only provides a conceptual framework systematically to explore e-commerce strategic issues, but also provides empirical evidence on the relationships between its various constructs. Results of this exploratory study indicate that the business environment appears to have a tangible impact on strategic choices in operations. It also appears that links between the business environment and operations strategy in e-commerce, as well as the alignment between the information systems strategic orientation and operations strategy, determines e-commerce business performance success. Results show that high-performing e-commerce companies and low-performing e-commerce companies use different information systems strategies to support their operations strategy. The types of strategies these companies use are identified in this study.     

The impact of M&;As on company innovation: evidence from the US medical device industry

The acquisition of new technologies represents a vitally important and fundamental goal of many corporate managers, particularly those within the medical device industry. We collect data on ten medical device companies as our sample in this study, covering the period from 1990 to 2006; this sample is drawn from the top 20 companies in the US, on the basis of international sales performance. We also collect details on all of the acquisitions undertaken by these companies, along with their patenting performance. The empirical results of this study suggest that technological acquisitions are only likely to be of help to the acquiring firms, in terms of improving their innovative performance, if they set out to acquire those companies that are in similar proximity, in terms of their technological field. There is also a clear need for such acquiring firms to ensure their continuing commitment to internal R&D investment in order to maintain their own versatility.     

Supplier selection for outsourcing from the perspective of protecting crucial product knowledge

This paper considers the supplier selection problem in terms of the characteristics of the products/processes to be outsourced. Emphasis is placed on the possible risk that may arise in sharing or transferring crucial product/process knowledge to suppliers during outsourcing. Two indices are employed to assess the suitability of a supplier for outsourcing a product/process. The first measures the supplier's capability for technological innovation in the products for which they offer outsourcing services, and includes investment in R&D projects and the ratio of R&D personnel to the total work force. The second index measures the supplier's practices in protecting its clients’ intellectual property rights, and includes corporate image, track record in protecting clients’ intellectual property rights, and compliance with internal and external requirements. These two indices are then used to classify suppliers into four major groups, which are in turn assigned to classes of components/processes depending on their strategic importance and vulnerability – a portfolio approach. The proposed portfolio approach has been validated via a substantial empirical study involving data for 401 parts, 216 suppliers, and 36 manufacturing companies operating in China.     

A data-driven ensemble ranking system of production quality across manufacturers—A case study for risk assessment in the solar industry

In many production industries, quality assurance and risk analysis are important aspects of the procurement of products. Such analysis often takes the form of during and after production inspections performed by quality assurance companies. These inspections give insight into the quality level of each individual production batch; however, it is also often important to understand a manufacturer's overall production quality and how its quality compares to other manufacturers. Therefore, in this paper, we propose a data-driven method to rank the production quality across manufacturers. The method is based on data from quality assurance inspections and consists of three steps. In the first step, a failure mode and effects analysis is applied for each individual manufacturer. This results in a risk assessment for identified failure modes. In the second step, the risk assessments are combined to create an overall failure index for each manufacturer. Step 2 can be designed in various ways. To ensure our final ranking is robust to the selected method, in step 3 we combine all methods into a unified rank of each manufacturer. We validate our proposed ensemble ranking method using a case study from the solar industry, where we compare our final ranking with the experts’ knowledge of manufacturer quality. It is shown that our data-driven method identifies the high-risk manufacturers in accordance with experts’ knowledge.     

Born Global or Born to Run? The Long-Term Growth of Born Global Firms

Born global firms have stimulated substantial academic attention as regards their start up but research has neglected their subsequent, ongoing internationalisation. This contribution extends analysis from the inception and childhood to the growth and maturity of such firms. We investigate whether born global are also “born to run” companies; we also try to reconcile the analysis of international new ventures in international entrepreneurship studies with the approaches based on fast growing firms and gazelles. We initially present the latest advances in the modelling of accelerated internationalisation over time; we then discuss and develop a conceptual framework and a model that captures the variables that affect born global firms’ evolution in an holistic perspective; finally, we match case study analysis with the framework and discuss our findings. The results show two groups of firms that differ significantly in long-term internationalisation paths and growth cycles. We highlight turning points in these paths and discuss the drivers which lead to sustained high growth. The characteristics of the entrepreneurial/management teams, strategic partnerships and the entry in complex markets are the main differentiators in growth patterns, irrespectively of the industry. The “openness” of the founders and the early preparation for growth determine both the extent of organizational learning and the speed at which it is developed and used. We see said learning and its speed in development and use as the underlying, necessary mechanism of sustained high growth.     

The effects of related and unrelated technological diversification on innovation performance and corporate growth in the Taiwan’s semiconductor industry

This study uses the entropy-based patent measure to discuss the effects of related technological diversification (RTD) and unrelated technological diversification (UTD) on innovation performance and corporate growth. The results indicate that RTD has a monotonically positive influence on both of innovation performance and corporate growth and UTD has an inverse U-shaped influence on both of them. Furthermore, the results show that the extent of the positive effect of RTD on innovation performance and corporate growth is better than that of UTD on both of them. If Taiwan??s semiconductor companies would like to undertake technological diversification, this study suggests that they should adopt RTD, rather than UTD. Besides, this study points out that innovation performance mediates the relationship between corporate growth and both of RTD and UTD. It demonstrates that RTD and UTD can directly affect corporate growth or indirectly influence it via innovation performance.     

Comparing business competition positions based on Web co-link data: The global market vs. the Chinese market

Summary Based on the findings from earlier studies which showed that links to business Websites contain useful business information, we examined the feasibility of using Web co-link data to compare business competitive positions. We hypothesized that the number of co-links to a pair of business Websites is a measure of the similarity between the two companies. Since similar or related businesses are competing businesses, the co-link data can be used to map business competitive positions. We selected 32 telecommunications companies for the study and collected co-link data to these companies from Yahoo!. Multidimensional scaling (MDS) analysis on the co-link data correctly mapped these companies into telecommunications industry sectors. This proved our hypothesis and further confirmed the theory that links to business Websites can be objects for Web data mining. We collected data in a way that would reflect two markets, the global market and the Chinese market. Results from the two data sets revealed the competitive positions of the companies in the two markets. We propose that regular data collection and analysis based on this method can be used to monitor the business competitive environment and trigger early warnings on the change of the competitive landscape.