SM_L3 Flashcards
(20 cards)
What are the five elements in Schumpeter’s definition of innovation?
- New goods
- New methods of production
- Opening of new markets
- Conquest of new sources of supply
- New organisation of industry
What is the key difference between invention and innovation?
- Invention: conversion of cash into ideas (creating something novel)
- Innovation: conversion of ideas into cash (commercialising and profiting)
How do product and process innovation typically evolve over a product’s life?
- Early stage: high product innovation rate
- Later stage: rising process innovation as volume grows and cost reduction becomes crucial
According to Utterback & Abernathy, what are the three industry innovation patterns and their focus?
- Fluid pattern: functional performance, frequent product changes
- Transitional pattern: product variation & cost reduction, mixed processes
- Specific pattern: cost reduction, incremental improvements
Why did business model innovation differentiate Apple from HTC?
- Apple expanded value creation beyond hardware to services (e.g., iTunes, App Store)
- HTC focused mostly on hardware, missing ongoing revenue from use
List the eight generic stages of a corporate innovation process.
- Idea generation
- Idea screening
- Concept testing
- Business analysis
- Market strategy development
- Product development
- Market testing
- Commercialisation
Great Solutions Create Better Success Plans That Convert
What is meant by a technological trajectory?
Continuous improvement of a technology along a predictable path of performance over time within the same product/service category
Describe the technology S‑curve.
- Pioneering: exploring possibilities, low performance
- Mastery: steep gains as understanding matures
- Upper limit: diminishing returns; further improvement costly or impossible
Define a technological discontinuity.
A major shift where a new technology’s S‑curve overtakes a maturing one, producing a leap in performance and requiring firms to adapt
Differentiate competence‑enhancing vs competence‑destroying discontinuities.
- Enhancing: builds on existing know‑how
- Destroying: renders incumbent expertise obsolete
Give three warning signs of an upcoming technological discontinuity.
- Declining R&D productivity
- Missed R&D deadlines and staff dissension
- Smaller entrants investing in radically new technologies
What is a disruptive technology as per Christensen?
A technology that is simpler, cheaper, more reliable and convenient than the incumbent, initially serving low‑end or niche markets
Explain the core of the Innovator’s Dilemma.
Well‑managed incumbents focus on sustaining improvements demanded by their current customers, thereby overlooking emerging disruptive innovations
How does performance demanded at low‑end vs high‑end markets relate to disruption?
- Sustaining technologies improve along trajectories meeting high‑end demand
- Disruptive tech starts below mainstream requirements but eventually crosses them
Outline the six steps that lead incumbents into a lock‑in situation.
- Disruptive tech developed inside incumbents
- Marketing seeks feedback from lead customers
- Incumbents double down on sustaining improvements
- New entrants discover markets via trial & error
- Entrants move up‑market
- Incumbents belatedly adopt to defend base
Inside Feedback Sustains New Trials Moving Up Defensively.
List two ways disruptive technologies can lower traditional barriers to entry.
- Reduce need for capital requirements through new production methods
- Diminish importance of established distribution channels by attracting new buyers
Contrast exploration and exploitation modes in organisational learning.
- Exploration: research, undeveloped ideas, long‑term, uncertain
- Exploitation: execution, established competence, short‑term, certain benefits
How did GE Healthcare apply reverse innovation?
Developed a portable ultrasound in China (laptop‑based, under $30k) and later a hand‑held Vscan (~$10k) that disrupted the high‑end equipment market
Give two critiques of the theory of disruptive innovation.
- Predictive claims often proven wrong (e.g., iPhone)
- Disruption can only be reliably identified after the fact and does not suit every industry
Summarise the connection between Innovation in Industry, Technological Discontinuities, and Disruptive Technologies.
- Innovation can shift competitive advantage
- Technological discontinuities force adaptation
- Disruptive technologies pose acute threats by altering barriers to entry
