Case Study

UPM Rafsec RFID venture, 2004

23 pages
December 2007
Reference: IMD-3-1806

The need for innovation and diversification add complexity to managing a large firm. UPM Raflatac, the labelstock division of UPM Kymmene – the world’s leading company in the pulp and paper industry, initiated an internal venture on “smart labels” in 1998. The case relates how the venture evolved over time with the development of the industry. The case is written at the venture level but the analysis can be expanded at the industry, corporate and division levels. The main decision to be made is whether to keep the venture more “independent” with the ultimate objective of spinning it off or to subsume the venture back into the UPM Raflatac structure.

Learning Objective

1) To achieve growth objectives through in-company ventures, companies need to change their mindset and organization concept, adopt the business systems approach to managing projects aimed at development of innovative products and provide an environment to empower the venture manager. 2) Organizations, willing to exploit the benefits of new product development as internal ventures, need to change their mindset, redefine their concept and loose controls in order to expand their capacity. Mastering of the new business systems approach to managing projects aimed at development of innovative products and services will help corporations to capitalize on emerging technology and market opportunities. 3) Corporations should broaden their tolerance to mistakes and encourage entrepreneurial approaches by creating conditions where an entrepreneur strives. Top management should also create an upside opportunity in order to retain key people who may wish to leave the corporation and strike on their own.

Intrapreneurship, Internal Venturing, Global, Strategy Execution
Field Research
© 2007
Available Languages
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