Essay About Product Innovation2 And Market Launch

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Innovation = Invention (Idea → Discovery → Research → Development → Invention) + Market Launch (+ Exploitation) An Invention needs to have commercial value (market launch) to become innovation!Types of Innovation:1. Product innovation2. Process innovation3. Service innovationScope/Impact of Innovation1. Incremental: small improvement2. Significant: technology unchanged → from B&W printer to color printer3. Radical: new technology → laser printer instead of mechanical printing/typewriterSources of innovation1. Suppliers → Vodafone redbox2. Manufacturers → Crown cork3. (End-) Users → Foot straps for jumps4. Hybrid / Co-creation: Joint creation by company and user → Open Source Software; Youtube (User generated content)Value Drivers1. Design innovation → structuring group creativity towards valuable outcomes using design practices2. Management innovation → invention and implementation of management practices, process, structure, or technique (GM’s organizational structure)3. Business model innovation → Budget airlines; Airbnb4. Digital innovation → using digital tools and infrastructure to offer customers enhanced or unique values (3D printing, AI, cloud computing)Importance of knowing the model:-        Firm might need to adapt to the phase-        Forecast certain changes-        Actually change the environment/competition positionHow do industries come into existence?-        Completely new technology (technology driven) e.g. ICT industry-        Existing material/knowledge but new industry = recombination e.g. renewable energies-        Not new industry but change of application e.g. nano technologyUtterback and Abernathy Model → Industry EvolutionInnovation follows 3 phases:Fluid PatternTransition PatternSpecific PatternINNOVATIONEmphasisFunctional product performanceProduct variationCost reductionStimulationInfo on users’ needs and technical inputs Opportunities created by expanding internal technical capabilitiesPressure to reduce cost and improve quality in order to stay competitivePredominant type of innovationFrequent major changes in productsMajor process changes required by rising volume[pic 1]Incremental for product & process, with cumulative improvements in productivity & qualityORGANIZATIONType of Org controlInformal & entrepreneurial → Searching & sortingThrough liaison relationships, projects & task groupsThrough emphasis on structure, goals & rules[pic 2]                                                           Radical innovation                              IncrementalFLUID PHASETRANSITION PHASESPECIFIC PHASEInnovation Stimulated ByMarket pool: information on users’ needs and users’ technical inputsTechnology push: opportunities created by expanding internal technical capabilityPressure to reduce cost and improve qualityTechnologyUncertainty and not well understoodAdaptation to the standard + better understanding of the technology + stabilityKnownRate Of InnovationHighHighDecreasingPredominant Type Of InnovationFrequent major changes in products (Radical Product innovation)Major process changes required by rising volume (decreasing rate of product innovation)Incremental for product and process, with cumulative improvement in productivity and qualityCompetitive Emphasis OnFunctional product performanceProduct variationCost reductionProduction ProcessesFlexible and low quantityScale up + focus on efficiencyEfficient Quality Of ProductNot high, still unreliable or expensiveHighHigh and “customized”Market- Uncertain size and response- Attract demand, first mover advantage- Market acceptance, increasing diffusion- Attract demand- Stable + price competition- Increasing market shareMarket EntryHighGoes downVery lowMarket ExitVery lowGoes up (winners who stay in the market)Very lowOrganizational Control IsInformal and entrepreneurialThrough liaison relationships, project and task groupsThrough emphasis on structure, goals and rules