Wk7 - product innovation Flashcards
(36 cards)
What are the six types of business value that come from innovation?
- can create market dominance
- can charge premium prices
- exploited by first mover advantage
- continuous innovation leads to business sustainability
- enables globalisation and rapid change in markets
- enables growth of knowledge and technology transfer
What are the two requirements of innovation?
- it is knowledge intensive
- it is difficult to manage
What are the three types of product innovation classifications?
- evolutionary vs revolutionary (product based)
- continuous vs discontinuous (market based)
- closed vs open (firm based)
What are the differences between evolutionary and revolutionary innovation? Provide an example of each.
evolutionary - adding features to existing products, extends product lifecycle. eg. Windows XP - 7/8.
revolutionary - new, never before seen products, may not fit current market eg. Tesla cars.
What are the differences between continuous and discontinuous innovation? Provide an example of each.
continous - expands and extends the market for existing product eg. Google adding features for business.
discontinuous/disruptive - changes the market, often enters in emergent market segments eg. iPhone
What are the differences between closed and open innovation? Provide an example of each.
closed - in house R&D, give customer what is designed for them, exclusive -> pharmaceutical development.
open - involved with multiple stakeholders, open technology -> Raven robotic surgery.
What are five search strategies for innovation?
- planned vs ad hoc
- internal - R&D, hiring in
- external - monitory industry, competitors etc
- Stand alone vs in association - local clusters, technical societies
- engaging communities of practise - global and local linkages
What are five product development strategies?
- in house development
- joint development with business partner
- outsourced development
- licensing
- reverse engineering
When is in house development most favourable?
- developing to lead to a patent is best kept internal where imitation is easy
- best suited to simple products
- patent must be enforceable i.e. have resources to protect it
When is joint venture development most favourable?
- when product is complex system e.g. airplane
- complex systems are hard to copy e.g. JLR partnered with Chery motors in China.
When is the engagement of users most favourable?
- users have practical, tacit knowledge that can be exploited to identify opportunity
- engage them in testing to ensure usability, needs being met
- engage them in design and experience to ensure better and fresh product
What is innovation?
- successful exploitation of new ideas
- exploits change as opportunity - evolutionary or revolutionary
- new ways of doing things
How can innovation create a competitive advantage?
- achieves stronger growth/greater success due to ability to compete better and meeting customers needs
- product innovation - capture market by meeting needs in an improved way
- process innovation - increased efficiency/unique service unable to be replicated by competitors
‘Innovation distinguishes between leaders and followers’
Why is innovation so important?
Virtually all economic growth is dependent on innovation. It potentially creates new markets for new products, by solving needs in new ways (revolutionary) or instead refines and improves existing ideas (evolutionary).
What is an example of product innovation in the IT industry? Explain the outcomes and flow on effects.
Apple - creating the iPhone.
- created smartphone market
- displaced incumbent players - market leader Nokia
- first mover advantage
- created new submarkets - shift towards digital music, application development etc.
What is an example of an industry that was threatened by the rise of the internet? Explain
Travel agents
- business model offered little value to internet savvy customers
- higher choice - lower cost - more convenient
- created opportunities for services like Webjet and Expedia
Retail
- online shopping - purchase from home and delivered to door
- business policy - free returns/exchanges if item doesn’t fit
- risk free, convenient shopping
What are the mechanisms of innovation that can lead to competitive advantage?
- novelty of product or service
- novelty of process
- complexity
- legal protection of intellectual property
- add/extend range of competitive factors
- timing
- robust/platform design
- rewriting the rules
- reconfiguring parts of the process
- transferring across different application contexts
Provide a real life example and the strategic advantage of the following mechanism of innovation: novelty of product or service
Offering something else no one can - introducing first iPhone.
Provide a real life example and the strategic advantage of the following mechanism of innovation: novelty of process
Offer something in ways other cannot match - speed, cheaper, customiser - e.g. Citibank introducing ATMs
Provide a real life example and the strategic advantage of the following mechanism of innovation: complexity
Offering something that competition finds challenging to master - e.g. Boeing and Airbus - oligopoly on commercial jets.
Provide a real life example and the strategic advantage of the following mechanism of innovation: legal protection of intellectual property
Monopolising a product with intellectual property - e.g. anything with patent.
Provide a real life example and the strategic advantage of the following mechanism of innovation: add/extend range of competitive factors
Move the basis of competition from price - to price and quality. e.g. Korean car manufacturers - Kia.
Provide a real life example and the strategic advantage of the following mechanism of innovation: timing
first mover advantage - Tesla for electric vehicles, Apple iPhone
fast follower advantage - PDA (personal digital assistant) device popular a few years after failed Apple Newton
Provide a real life example and the strategic advantage of the following mechanism of innovation: robust/platform design
Offering something that provides a platform from which other products can be built - iPhone -> iTunes app store/digital applications
