Innovation, business models, transformation Flashcards
(34 cards)
Making strategic choices as “Chief Innovation Officer”
- Product <–> Process
- Technolog Push <–> Market Pull
- Early Mover <–> Late adopter
- Sustaining <–> Disruptive
- Closed <–> Open
Product versus process innovation
- Product innovation
- Process Innovation
Product Innovation
High visibility to customer (e.g. new features)
Process Innovation
Improves efficiency & costs (e.g. direct sales, modularity, build-to-order)
Product versus process innovation: graph page 28
- Advantage large firms : economies of
scale - Window of opportunity: small new entrants
–> Mainly valid for traditional industries
Technology push: process and definition
Innovation that originates from new technological developments, regardless of immediate market demand
Research and development –> Manufacturing –> Marketing –> User
market pull: process and definition
Innovation that starts from identified customer needs or market demand
Marketing –> Research and Development –> Manufacturing –> User
Innovation diffusion: Diffusion S-Curve –> definition
The S-curve reflects a process of initial slow adoption of innovation, followed by a rapid acceleration in diffusion, leading to a plateau representing the limit to demand
Graph : Tipping point –> Tripping point
Diffusion S-Curve: Important decisions
▪ Timing of the tipping point:
Ramp up production & distribution
▪ Timing of the plateau:
Reduce investments & costs
▪ Extent of diffusion (hight):
Estimate final ceiling
▪ Timing of the tripping point:
predict collapse of demand
S-Curve concept: Technology competition
old –> new
= page 14
The “Double S Curve” is the biggest
challenge for..
established companies
–> Optimize the core –> Reinvent the futur
First-Mover Advantage
- Scale benefits
- Experience Curve
- Pre-emption of scarce resources
- Reputation
- Buyer switching costs
fast follower?
- Free-riding?
- Learning?
for example : 2003 My Space –> 2004 Facebook
Disruption: definition
describes a process whereby a smaller company with fewer resources is able to successfully
challenge established incumbent businesses
innovator’s dilemma
Incumbent firms focus on sustaining innovations to satisfy their most demanding and profitable customers.
= Sustaining innovation (serving existing clients better)
Disruptive innovations enter the market at the low end or with a different value proposition (e.g., cheaper, more accessible), not initially appealing to high-end users.
Over time, disruptive technologies improve and begin to capture more of the market, potentially overtaking incumbent
= Disruptive innovation (starting simple and low-end, then moving upmarket)
Origins of disruptive innovations
- Low-end markets
- New-market footholds
The principles of disruption that are often overlooked
- Disruption is a process: from fringe to mainstream
- Disrupters often build business models that are very different from those of incumbents
- Some disruptive innovations succeed; some don’t
- The mantra “disrupt or be disrupted can misguide us”
Integrating (potentially) disruptive innovations into
incumbent organizations: four options
graph : page 25
Horizontal : Fit of innovation with
organization’s resources and competences
Vertical : Fit with organization’s values
Low - Low : Create new, separate unit dealing
with technology; hire new, experienced employees
Low - High : Create new, separate unit dealing
with technology; staff with existing employees
High - Low : Integrate technology into existing
organizational unit; hire new, experienced employees
High - High : Integrate technology into existing
organizational unit; staff with existing
employees
open innovation process: definition
A distributed innovation process based on
purposively managed knowledge flows across organizational boundaries
voir graph page 29
Types on open innovation and modes of collaboration
- Outside-in process
- Coupled process
- Inside-out process
Outside-in process
Definition : Integrating external knowledge
- In licensing (You receive the rights to use someone else’s intellectual property)
- CVC (Corporate Venture Capital) / Spinning in (corporation supports an external startup (sometimes even helps build it) / Startup programs (initiatives by corporations to engage with startups)
- Crowdsourcing (an organization outsources tasks, ideas, or solutions to a large group of people)
Coupled process
Definition : Combined outside-in and
inside-out process, working in partnerships to leverage complementarities
- Strategic alliances (formal collaboration between two or more organizations that agree to work together to achieve strategic objectives, without merging or acquiring one another)
- Ecosystems & platforms (network of interdependent organizations (partners, suppliers, startups, institutions, etc.) that collaborate and co-evolve to deliver value to customers)
- Meta-organizations (inter-organizational entities where independent organizations come together to collaborate, govern, or pursue a shared purpose while maintaining their autonomy)
Inside-out process
Definition: Bringing ideas to market
and multiplying technology
- Out licensing (You grant rights to others to use your IP)
- Incubating ( Innovation happens inside the organization) & Spinning out (A project leaves the parent company to become an independent entity)
- Free revealing (e.g.: open data)
Open innovation partners
- Customers
- User communities
- Lead users
- Suppliers
- Start-ups
- Universities
- Competitors
- High tech Partners
- Intermediaries
