Digital Innovation

Question 1

Classification of innovation

Answer 1

• technology push: is driven by research and technology e.g. digital camera
• market pull: driven by an observed need, problem or opportunity in a market
• a vertical market: refers to an innovation that addresses industry specific problems
• horizontal innovation: addresses the needs of many industries
• product innovation: introduces changes in the things that are offered
• process innovation: change in the way things are created
• paradigm innovation: changes in how something is done

Question 2

Definitions of strategy

Answer 2

• defines how we will meet out objectives
• sets allocation of resources to meet goals
• provides a long term plan

Question 3

What happens in the absence of digital business strategy

Answer 3

• missed opportunity for additional sales and more efficient purchasing on the buy-side
• fall behind competitors, in delivering online services - may become difficult to catch up
• poor customer experience from poorly integrated channels

Question 4

McFarlan’s strategic grid

Answer 4

• McFarlan’s strategic grid model is used to indicate the strategic importance of information systems to a company now and in the future
• The strategic segment indicates that business depends on its existing IS and its continued investment in new IS
• The turnaround segment suggest that a business does not gain competitive benefits from its current IS, but future investment may positively affect the business in the future
• Factory segment business depends on its current IS, further investment would not have an impact on competitive position
• support segment business believes it will not derive significant competitive advantage from IS

Question 5

Definition of innovation

Answer 5

The use of digital technology and applications to improve existing business processes and workplace efficiency

Question 6

SWOT analysis

Answer 6

1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

Question 7

Models for digital strategic analysis

Answer 7

1. Porters Five forces
2. Porters competitive strategies
3. McFarlan’s strategic grid
4. Peppers and Ward’s modified strategic grid

Question 8

Porters 5 forces

Answer 8

1. Bargaining power of customers
2. Threat of substitutes
3. Threat of new entrants
4. Extent of rivalry between existing competitors
5. Power of suppliers

Question 9

Porters competitive strategy

Answer 9

• Overall cost leadership: low costs retain consumers and reduce the threat of substitutes
• Differentiation: unique product, exception quality…
• Focus or niche: serving a target segment very well
• ‘Stuck in the middle’: the firm is unable to adopt the above approaches and is at mercy of it’s competitors

Question 10

Innovation process

Answer 10

1. Idea
2. Exploitation of the idea through an offering
3. Market consumption of the offering