UNIVERSITY OF CATANIA SCHOOL OF ECONOMICS AND BUSINESS Nanotech Business Models: A multiple case study approach Flavia Li Calzi 28 November 2012.

UNIVERSITY OF CATANIAUNIVERSITY OF CATANIASCHOOL OF ECONOMICS AND BUSINESSSCHOOL OF ECONOMICS AND BUSINESS

Nanotech Business Models:Nanotech Business Models:A multiple case study approachA multiple case study approach

Flavia Li CalziFlavia Li Calzi28 November 201228 November 2012

Chapter 1:To give a basic understanding

of Nanotechnology, by describing its main features

and implications

Chapter 2:To provide a framework to study the business models

by detecting the concept via a thorough literature review

Chapter 3:To explain the methodology

adopted to study the nanotech business models

Chapter 4:To study the nanotech business

models from atheoretical perspective

by providing a taxonomy

Chapter 5:To study the nanotech business

models from an empirical viewpoint by analysing seven

in-depth case studies

What are nanotech business models and how do they work?

1. What is nanotechnology?

3. What is the methodology adopted and the data collection process?

5. What kind(s) of nanotech business models do we know and which ones have recently emerged?

Research Structure

2. What is a business model?

4. What is a nanotech business model?

1. What is nanotechnology?

The key technology of the 21st century

The understanding and control of matter at dimensions of roughly 1 to 100 nanometers

An emerging technology: from 1980’s

Different from Microtechnology

From early 2000s nanotech

commercial applications

In 2008, over 800 nanotech products are

publicly available

A vaste range of nanotech applications

Positive and negative implications

A nanometer (nm) is one billionth, or

10−9, of a meter

2. What is a business model?

A statement (Stewart and Zhao, 2000); A description (Applegate, 2000; Weil and Vitale, 2001); A representation (Morris, Schindehutte and Allen, 2005; Shafer, Smith and

Linder, 2005); An architecture (Dubosson-Torbay, Osterwarder and Pigneur, 2002;

Timmers, 1998); A conceptual tool or model (Osterwarder, 2004; Osterwarder, Pigneur

and Tucci 2005; Teece, 2010); A structural template (Amit and Zott, 2001); A method (Afuah and Tucci, 2001); A framework (Afuah, 2004); A pattern (Brousseau & Penard, 2006); A set (Seelos & Mair, 2007).

Business Model Layer

Source: Osterwalder (2004)

“A business model describes the rationale of how an organization creates, delivers and captures value”,

Osterwalder (2010)

The relationship between Business Model, Business Strategy, Business Organization and ICT

Source: Osterwalder (2005)

Business Model Canvas

Source: Osterwalder (2010)

The nine building blocks aggregated in four pillars

Source: Author’s elaboration from Osterwalder (2010)

http://www.youtube.com/watch?v=QoAOzMTLP5s

http://modellidibusiness.wordpress.com/

Un esempio …

Sconti massicci, in un determinato giorno, in una determinata città, sbloccati al Sconti massicci, in un determinato giorno, in una determinata città, sbloccati al raggiungimento di un numero minimo di utenti coinvoltiraggiungimento di un numero minimo di utenti coinvolti

Vantaggi del Business Model di Groupon:Vantaggi del Business Model di Groupon:

1. alle aziende 1. alle aziende viene garantito un numero minimo di nuovi clienti e una buona viene garantito un numero minimo di nuovi clienti e una buona dose di pubblicità, senza aprire il portafogli;dose di pubblicità, senza aprire il portafogli;

2. agli utenti2. agli utenti vengono proposte incredibili offerte (fino all'80-90 %), senza vengono proposte incredibili offerte (fino all'80-90 %), senza spostarsi dalle proprie città;spostarsi dalle proprie città;

3. a Groupon3. a Groupon spetta il 50% di servizio/prodotto in offerta acquistato dagli utenti. spetta il 50% di servizio/prodotto in offerta acquistato dagli utenti.

http://www.youtube.com/watch?v=7J-PHRNoc20

3. What is the methodology adopted…?

The Multiple Case Method Approach

Source: Author’s own work adapted from Pauwels and Matthyssens (2004)

…and the data collection process?February - March 2011

• Secondary source: literature review, web browsing, library research, corporate materials, analyst reports, business journals;

April 2011

• “Winter School on Emerging Nanotechnologies”, from 28th March to 1s April 2011 organized by the Grenoble Ecole de Management (GEM) in Pinsot (France).

• Research period at Grenoble (France), from 2nd to 16th April 2011 twenty interviews have been performed in person, in one-to-one sessions with key

managers and CEOs belonging to the Grenoble nanotech cluster;

May - July 2011• Interviews with STMicroelectronics managers in Catania (Italy);

• Integration and analysis of the data collected in light of the triangulation;

• Application of the multiple case method by reporting the seven case studies

Nanotech Setting

Grenoble Nanotech Cluster

Catania Nanotech Cluster

Nanotech Firms by Target Applications (by Number of Firms)

Source: SEMI (2007)

Semiconductor firms’ activities

Source: GSA – Global Semiconductor Alliance

TRADITIONAL MODEL

“one size fits all

technology solutions”BEFORE AND LATER 1980’s

NEW MODELS

“Design and manufacturing

work in unison”

FROM MID 1980’s

High Integration

Low Integration

4. What kind(s) of nanotech business models do we know and which ones have recently emerged?

The time arrow for business model changes in the semiconductor industry: IDM vs Fabless vs Foundry business model

Source: Author’s own work

Source: Author’s own work

Semiconductor firms’ business models and their relationships

. “The fabless model is an attractive and popular option for many semiconductor

companies. By adopting a fabless businessstrategy, a company can focus time and

resources on the design of innovative integrated circuits, while avoiding the

high cost of building, operating, and upgrading a manufacturing facility”

“Pure-play semiconductor foundry is a company that does not offer a significant amount of IC products of its own design, but instead operates semiconductor fabrication plants focused on producing ICs for other companies. Companies create their own designs and pay the foundry to manufacture the chips.”

Source: IC Insights, USA

Source: IC Insights, Strategic Reviews Database

Source: IC Insights, company reports

Source: IC Insights, USA

IDMIDM

FABLESSFABLESS

HYBRID/FABLITEHYBRID/FABLITE

OEMOEM

ENDEND USERUSER

5. What are the nanotech business models?

FOUNDRYFOUNDRY

1. Nanotech Business Model

2. Nanotech Business Model

3. Nanotech Business Model

FABLESSFABLESS FOUNDRYFOUNDRY

4. Nanotech Business Model

TEST TEST HOUSEHOUSE PACKAGING PACKAGING

HOUSEHOUSEASSEMBLY ASSEMBLY

HOUSEHOUSE

FOUNDRYFOUNDRY

FABLESSFABLESS FOUNDRYFOUNDRY

5. Nanotech Business Model

IDMIDM

1

OEMOEM

6. Nanotech Business Model

IDMIDM11 IDMIDM22

FABLESSFABLESS FOUNDRYFOUNDRY

IDMIDM55

IDMIDM66

IDMIDM33

IDMIDM44

1

ENDEND USERUSER

The Seven Business Case Studies

IDM FABLESS DESIGN HOUSETEST

HOUSEFOUNDRY

STMicroelectronicsST-

EricssonDolphin Integration

Presto Engineering

Tronics Microsystems

Movea Pyxalis

STMicroelectronics’ business model

Source: Based on author’s interviews with Christophe Bernard and Andre Judge (ST Grenoble Site), Maurizio Cairone, Manlio La Duca and Daria Puccia (St Catania Site)

Pyxalis’ business model

Source: Interview with Philippe Rommeveaux – Grenoble, 12/04/2011

Conclusions Advent of Nanotechnology

Increased Costs More complexity

Miniaturization Process

Disintegration of the Semiconductor’s Value Chain

From one high integrated nanotech business model to many high disintegrated nanotech business models

From large to small nanotech firms

THANK YOU