Tutorial 2: Innovation Flashcards Preview

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Flashcards in Tutorial 2: Innovation Deck (2):
1

Types of Innovation

  • Sustaining innovations
    • New technologies or business models which suit an existing market better (improvement) 

  • Disruptive innovations 

    • New technologies or business models that (at first) lead to worse products measured against common criteria; often cheaper / less complex

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2

Disruptive Innovation – Christensen's Criteria 

  • Historically most valued attributes

    • Innovation leads to products or services that underperform dominant ones along the dimensions historically most valued by customers in the market 

  • Other quality criteria

    • Innovation leads to products or services superior in dimensions not valued as important before 

  • Cost and margin

    • Innovation leads to products or services that are cheaper for customers and provide lower margins for vendors than dominant ones 

  • Simplicity / convenience

    • Innovation leads to products or services simpler or more convenient to use 

  • Interest of main customers

    • The most profitable customers of the current market’s leading firms have initially little interest in products / services based on the innovation 

  • First customers

    • First customers are mainly situated in niche or emerging markets 

  • First vendors

    • Among the companies that commercialize the innovation is a high rate of startups or companies new to the market 

  • Value chain

    • The innovation leads to a different structure of the vendors’ value chain 

  • Market disruption 

    • Eventually, products or services based on the innovation will displace the dominant ones in the mainstream market 

It is not possible to forecast market disruption ex-ante

Criteria are a good first indicator