La Trobe University IBU5COV Corporate Venturing Report: Cochlear Corp

This report presents a corporate venturing strategy for Cochlear Corporation, focusing on business growth and expansion. It recommends three key strategies: taking a stake in innovative businesses within the same industry, developing and launching new innovative products to meet customer demands and expand market reach, and differentiating products from competitors through innovation and unique features. The report emphasizes the benefits of these strategies, including access to new resources, market expansion, technological advancements, and increased revenue and profit. The analysis highlights the importance of corporate venturing for maintaining a competitive edge and adapting to market changes. The recommendations aim to help Cochlear Corporation increase sales, improve market position, and achieve its overall business objectives.

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CORPORATE VENTURING
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1.0 Executive Summary
This report provides a Corporate Entrepreneurship Strategy for Cochlear Corporation. The
strategy comprises a number of recommendations for corporate ventures. Specifically, three
suggestions are provided that are consistent with the overall strategy of Cochlear; that is,
business growth and expansion. The first recommendation is that Cochlear should take a
stake in new, small innovative businesses that operate within the same industry as itself. The
firm will benefit by being able to access new resources, enter new markets, and/or obtain a
window on novel technologies. Secondly, it is recommended that the company should create
and launch more new innovative products considering that at the moment it offers very few
products and services. This recommendation will help Cochlear to make more money.
Thirdly, it is recommended that the corporation should seek to further differentiate its
products from those of the competitors. This will allow it to gain a competitive edge in the
market.
Keywords: corporate venturing, new products, acquisitions, innovation, differentiation

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Corporate Venturing
2.0 Introduction
Corporate venturing is a practice that is commonly done by large companies. It is
understood as the practice in which a big corporation acquires an equity stake in a small but
specialist or innovative company (Lerner 2013, p. 86). The large firm may also offer
marketing and management expertise to that small firm. The purpose of this report is to
develop a Corporate Entrepreneurship Strategy for Cochlear Corporation, which is the firm
that our team chose. The strategy includes specific suggestions for corporate ventures
consistent with the Cochlear’s overall strategy, which is to expand and grow the business.
3.0 Suggestions for Corporate Ventures
3.1 Take a Stake in New Innovative Businesses
The first suggestion for Cochlear’s corporate venture is to take an equity stake in a
small firm that operates within the same industry as Cochlear. That small firm has to be
specialist or innovative. Cochlear is a business organization that has specialized in innovating
and introducing various implantable hearing solutions which deliver a lifetime of hearing
outcomes (Arndt et al. 2017, p. 99). This therefore suggests that the company can take an
equity stake in a small firm that also engages in implantable hearing solutions. While this
corporate investment will provide a big opportunity for the new start-up business, Cochlear
itself will also be able to get a great opportunity that will enable it to grow fast (Yen 2017, p.
108). The large corporation will derive a number of benefits by taking a stake in the smaller
firm. Strategically-driven corporate venturing investments allow the smaller firm to increase
the revenues and profits of the larger company’s business, either indirectly or directly
(Battistini, Hacklin & Baschera 2013, p. 33). This means that by taking a stake in a smaller

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firm, Cochlear Corporation will be able to see its revenues and profits rise. Moreover,
Cochlear will benefit by growing or expanding its business.
It is notable that large companies which make strategic corporate venturing
investments usually seek to identify and make the most of synergies between themselves and
the new ventures (Lerner 2013, p. 87). The ultimate aim is to exploit the potential for further
growth within the larger company. Cochlear would be able to access new resources, enter
new lucrative markets, and/or obtain a window on novel technologies. The large company
will also get instant access to a new breed of entrepreneurs (Jiang & Shi 2018). Cochlear is a
big firm that is currently stuck in traditional and old-fashioned hierarchies which make it
difficult for the company to move as speedy as the market demands. Therefore, by investing
in more agile and smaller firms, Cochlear would be able to leverage new thought to grow into
new and more exciting markets and effectively meet the demands of its changing clientele
(Abrell & Karjalainen 2017, p, 15). Taking a stake in a new, innovative start-up firm also
serves as a gateway for Cochlear’s future acquisition of that small firm.
3.2 Develop New Innovative Products
The second suggestion is that the company should develop new and more innovative
products and services. At the moment, Cochlear Corporation offers very few products,
including acoustic implants, wireless accessories, and Cochlear implants (Arndt et al. 2017,
p. 102). The company should develop new devices and services that will enable it to satisfy
customer demands. Some of these products include bone conduction implants, in-the-ear
hearing aids, and other hearing care solutions. By developing and launching new devices, the
corporation would be able to target customer markets that were previously untapped. This
will result in growth which would allow Cochlear Corporation to increase its sales and profit.
Aside from making more money, creating new innovative products will help the company to
defend itself properly against the competition, satisfy the needs of a new segment, reposition

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itself, enter high-growth markets, make the most of excess capacity, meet internal goals, and
implement the company’s strategy (Hannigan, Seidel & Yakis-Douglas 2018, p. 954). All
these are of benefit to the firm.
3.3 Differentiating the Products from those of Competitors
The third suggestion is for Cochlear Corporation to differentiate its products from
those of the competition. Product innovation is an approach used by a variety of companies to
better differentiate their products from those of their rivals (Eze 2018, p. 13). Over the years,
Cochlear has made some efforts designed to differentiate its services and products in order to
give the company a competitive edge over its rivals. However, the styling and characteristics
of some of its products/services such as the Cochlear Implants have been imitated by the
competitors. As a result, Cochlear has somewhat lost its competitive edge. The company can
differentiate its products and thus regain its competitive edge over the competition by
continuing to innovate and offering more innovative products and services, including
additional and unique features in its products, as well as offering superior customer care and
packaging. This will effectively make Cochlear’s products different from those offered by the
competition (Shreay, Chouinard & McCluskey 2016, p. 6). Besides, the company will be able
to out-compete its competitors such as Grace Medical, Hearing Life and Australian Hearing.
4.0 Conclusion
In conclusion, Cochlear is a multinational firm whose overall strategy is to grow and
expand its business. This report has described a few recommendations for corporate ventures
which are in agreement with the firm’s overall strategy. They include creating and
introducing new innovative products into the markets to serve new market segments,
differentiating its products from those of its rivals through product innovation, and taking a

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stake in a new innovative start-up business. These recommendations will help Cochlear to
grow and increase its sales and profits.

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5.0 References
Abrell, T & Karjalainen, TM 2017, ‘The Early Stage of Internal Corporate Venturing:
Entrepreneurial Activities in a Large Manufacturing Company’, Journal of
Enterprising Culture, vol. 25, no. 1, pp. 1–30.
Arndt, S., Laszig, R., Aschendorff, A., Hassepass, F., Beck, R., & Wesarg, T 2017, Cochlear
implant treatment of patients with single-sided deafness or asymmetric hearing loss.
HNO, vol. 65, no. 2, pp. 98-108.
Battistini, B, Hacklin, F & Baschera, P 2013, ‘The State of Corporate Venturing’, Research
Technology Management, vol. 56, no. 1, pp. 31–39.
Eze, BU 2018, ‘Corporate Entrepreneurship and Manufacturing Firms’ Performance’, EMAJ:
Emerging Markets Journal, vol. 8, no. 1, pp. 12–17.
Hannigan, TR, Seidel, VP & Yakis-Douglas, B 2018, ‘Product innovation rumors as forms of
open innovation’, Research Policy, vol. 47, no. 5, pp. 953–964.
Jiang, B & Shi, H 2018, ‘Intercompetitor Licensing and Product Innovation’, Journal of
Marketing Research (JMR), vol. 55, no. 5, pp. 738–751.
Lerner, J 2013, ‘Corporate Venturing’, Harvard Business Review, vol. 91, no. 10, pp. 86–94,
Shreay, S, Chouinard, HH & McCluskey, JJ 2016, ‘Product Differentiation by Package Size’,
Agribusiness, vol. 32, no. 1, pp. 3–15
Yen, H 2017, ‘Cocreation Experiences: A Strategic Approach to Product Innovation and
Design’, International Journal of Organizational Innovation, vol. 10, no. 2, pp. 106–
126.