Lucent
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LUCENT
A Mathematician Rajiv Laroia joined Lucents bell labs in 1992. He wanted to make wireless data accessible to everyday people thus allowing them to send e-mail, listen to the radio all at the same time without denting the budget. Rajiv Laroia brought his five-person team and went out to start Flarion company. Lucent hopes this start up company by Rajiv Laroia will foster growth for them. Some people might ask how would Lucent benefit from this small start up company. Rajiv Laroia hopes that Flarion could look for new technology in hopes that Lucent might one-day buy them back after they start becoming profitable. In this way, the company hopes to strengthen an Achilles heel of any big firm: the effort to capitalize on “disruptive” “white space” advances that buck the status quo. (1)
Hows does a company like Lucent stay ahead of competition with so many growing areas of technology? As mentioned before by fostering other companys that are into new technology then buying them back, and in the last year Lucent has launched 24 other efforts designed to complement or compete with established business. In this way Lucent can always stay on top of the technology edge. Lucent has made around 150 million dollars from outsourcing.
Around 1994 when some of the Technology Company were losing money they started to slash research and development costs. To help cut costs Lucent started exchanging ideas with the goal of getting to the market more quickly. This idea to go beyond existing product lines where Lucent was weak will enhance new growth and foster fresh ideas.
In summary when big companys need to grown they should try and find smaller companys to buy to help support weak area the parent company might have. Also, to stay ahead of the technology edge parent company will often reduce research and development costs to afford smaller company to help foster growth.
Work Cited
Technology Review, Lucent Ventures into the Future November/December 2000, Page 110- 113