1. Introduction
Industry and Data
Results and conclusions
Strategic Analysis Through Patent Data
Mariano A. Mantovani
Politecnico di Torino
October, 2014
Supervisor: Dr. Giuseppe Scellato
Mariano A. Mantovani Strategic Analysis Through Patent Data

2. Introduction
Industry and Data
Results and conclusions
Outline
1 Introduction
Objectives
Theoretical Framework
Indicators
2 Industry and Data
The Aircraft Manufacturing Industry
Timeline
Dataset Construction
3 Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Mariano A. Mantovani Strategic Analysis Through Patent Data

3. Introduction
Industry and Data
Results and conclusions
Objectives
Theoretical Framework
Indicators
Objectives
This thesis has the following objectives
Analyze the technological portfolios of the companies.
Test methods for computing distance, coherence and
concentration of their knowledge base.
Analyze the evolution of the innovative strategies and finance
performance of companies in the aeronautic sector, in
particular: Airbus and Boeing.
Mariano A. Mantovani Strategic Analysis Through Patent Data

4. Introduction
Industry and Data
Results and conclusions
Objectives
Theoretical Framework
Indicators
Main Elements
Knowledge-Based View of the firm: Similar to RBV (Penrose),
Knowledge is the main resource for acquiring competitive
advantage (Grantt, Aino) and factor of production.
Indicators
Concentration (Leten-Firms and markets concentration).
Coherence (Nesta Innovative performance of farmaceutical
firms,Quatraro-Knowledge transferences and its effects in
production, Bart Leten-Diversification and performance of
firms)
Distance (Jaffe-Technological opportunities and Spillovers,
Bar-Technological distance between firms)
Mariano A. Mantovani Strategic Analysis Through Patent Data

5. Introduction
Industry and Data
Results and conclusions
Objectives
Theoretical Framework
Indicators
Herfindahl Index
Used to measure the degree of concentration of patents among
dierent classes. The index takes a value of 1 when patents tend to
be concentrated between few classes and of 0 when they are
spread.
HI =
i
(
Ni
N
)2
(1)
Mariano A. Mantovani Strategic Analysis Through Patent Data

6. Introduction
Industry and Data
Results and conclusions
Objectives
Theoretical Framework
Indicators
Coherence of the Knowledge Base
Coherence is based on the degree of technological relatedness
according to a randomness test. Weighted average relatedness of
technology is dened as:
WARi =
i=j τij pj
i=j pj
(2)
The coherence of the firm’s knowledge base estimates the average
relatedness of any technology randomly chosen within the rm with
respect to any other technology.
COH =
n
i=1
(
pi
i pi
WARi ) (3)
Mariano A. Mantovani Strategic Analysis Through Patent Data

7. Introduction
Industry and Data
Results and conclusions
Objectives
Theoretical Framework
Indicators
Distance Indicators
Min-Complement Distance
The complement of the share of overlap.
M(Pi , Pj ) = 1 −
n
k
MIN(pik, pjk) (4)
Cosine Index
Measures the cosine of the angle of the vectors.
C(A, B) = 1 −
n
i=1(tfai log
Npi
ni
)(tfbi log
Npi
ni
)
n
i=1(tfai log
Npi
ni
)2 n
i=1(tfbi log
Npi
ni
)2
(5)
Logarithms are adjustments for information content weighting.
Mariano A. Mantovani Strategic Analysis Through Patent Data

8. Introduction
Industry and Data
Results and conclusions
The Aircraft Manufacturing Industry
Timeline
Dataset Construction
Main Aspects of the Industry
Duopolistic structure.
Huge overhead and R&D expenditures.
Backlog.
High barriers to entry and exit.
Airbus Group
Formed as EADS in 2000.
Project to unify the industry in
Europe. 80% of revenues come
from CA, competitive on this
sector, but lately also in space
and helicopters.
Boeing Company
Strongly tied to American history
and government, founded in
1916, boosted by wars and space
campaigns. Competitive in Civil
Aircraft but also in defense and
space.
Mariano A. Mantovani Strategic Analysis Through Patent Data

9. Introduction
Industry and Data
Results and conclusions
The Aircraft Manufacturing Industry
Timeline
Dataset Construction
Some Events of the Past Decade
Mariano A. Mantovani Strategic Analysis Through Patent Data

10. Introduction
Industry and Data
Results and conclusions
The Aircraft Manufacturing Industry
Timeline
Dataset Construction
Dataset Construction
The analysis is performed using the Thomson patent database.
Patents are grouped by families and inventive activity by the
priority date.
Countings are done according to the IPC classification at class
and group levels.
The time framework is from 2000 to 2011.
Financial information and other corporate information is obtained
from the Annual Reports, disclosed to the public every year.
Mariano A. Mantovani Strategic Analysis Through Patent Data

11. Introduction
Industry and Data
Results and conclusions
The Aircraft Manufacturing Industry
Timeline
Dataset Construction
Dataset Construction
Using the data:
Compute of concentration at the class level for each portfolio.
Compute of the distance using both indicators at class and
group level for the most relevant class.
Construction of a matrix of relatedness of the classes and
computation of the coherence of the knowledge base of each
company.
Mariano A. Mantovani Strategic Analysis Through Patent Data

12. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Concentrations
The concentration measure
shows that Airbus inventions are
classified with more
concentration, while Boeing
remains relatively constant.
Please note the increase for
Airbus from 2005 to 2006. High
frequency classes:
B64: Aircraft, aviation,
cosmonautics.
G01: Measuring, testing.
Mariano A. Mantovani Strategic Analysis Through Patent Data

13. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Distance - Class Level
Both
distance
measures
show the
same
pattern.
Since year
2007 starts a
diversifica-
tion
process.
Mariano A. Mantovani Strategic Analysis Through Patent Data

14. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Selected Evidence of the Distance
The graph shows
the percentage of
inventions of each
portfolio that
classifies into G01.
Notice increasing
and decreasing
rates from year
2007.
Mariano A. Mantovani Strategic Analysis Through Patent Data

15. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Coherence
Coherence may increase
for two reasons:
Investments classify
constantly to the
same class.
Investments are
classified in classes
with positive
relatedness.
The companies under
analysis follow mostly the
same path.
Mariano A. Mantovani Strategic Analysis Through Patent Data

16. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Returns on Assets
2002 and 2009 falls in
world passenger traffic
caused by the terrorist
attacks and the
international financial
crisis. Airbus ratios in
2006 and 2007 have
different causes.
Mariano A. Mantovani Strategic Analysis Through Patent Data

17. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Some Events of the Past Decade
Mariano A. Mantovani Strategic Analysis Through Patent Data

18. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Airbus in 2006 and the Power8 Program
Airbus suffered falls in profitability in 2006 due to technological
problems -Result of unsuccessful R&D- with the A380 and other
projects like the A400M and the A350.
Two points of the
Power8 Program:
Develop Faster
Focus on Core
Business
Activities
Mariano A. Mantovani Strategic Analysis Through Patent Data

19. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Conclusions, advantages and drawbacks
A couple of drawbacks
Related to patent procedure and database
Other ways of protecting knowledge
Coclusion and Advantages
Results show a dependence between the firms performance and
inventive activity. Measuring patent portfolios with indicators
allows to:
Find periods and fields of diversification and hence
locate and describe trends on the inventive strategy of
incumbents
Mariano A. Mantovani Strategic Analysis Through Patent Data

20. Introduction
Industry and Data
Results and conclusions
Results
Selected Profitability Indicators
Airbus in 2006
Thank for your attention
Mariano A. Mantovani Strategic Analysis Through Patent Data