GeunHo Leegeunhole@bu.edu

Reengineering inInnovation & Strategy

Reengineering inInnovation & Strategy

Brown Bag MeetingKorea National Information Society Agency

Jan. 30, 2007

1.1. New Trends in InnovationNew Trends in Innovation

2.2. New Trends in StrategyNew Trends in Strategy

3.3. Strategy InnovationStrategy Innovation

CONTENTSCONTENTS

New Trends in Innovation

Value Creation Chain

Disruptive Innovation

Open Innovation

Invention Innovation Diffusion

Value Creation ChainValue Creation Chain

Disruptive InnovationDisruptive Innovation

The term disruptive innovation first appeared in the 1997 Harvard Business School professor Clayton Christensen’s best-seller The Innovator’s Dilemma.

The book investigated innovations that were radical in nature compare to the conventional sustaining (incremental) innovation.

Disruptive InnovationDisruptive InnovationVa

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Time

Conventional Innovation

Market’s Demand

Disruptive Innovation

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Contents of Disruptive InnovationContents of Disruptive Innovation

Disruptive Technologies: technologies that have displaced other technologies to offer a whole new sphere of possibilities at lower prices.

Disruptive Products: products or services that replace similar existing products or services based on their superior attributes or lower price.

Contents of Disruptive InnovationContents of Disruptive Innovation

Disruptive Processes: processes that are of disruptive nature often outperform the traditional ways of working.

Disruptive Business Models: Business Models that are disruptive do business in new and innovative ways in established or new areas.

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Open InnovationOpen Innovation

Popularized by UC Berkeley Business School’s Professor Henry Chesbrough'sbook "Open Innovation," this term refers to the broad concepts of leveraging external sources of innovation to drive internal growth.

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Open Innovation ModelsOpen Innovation Models

In open innovation models, companies look inside-out and outside-in, across all aspects of the innovation delivery chain.

Open Innovation ModelsOpen Innovation Models

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Open Innovation ModelsOpen Innovation Models

Companies looking externally for sources of available technologies that can be used as a basis for internal development.

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Open Innovation ModelsOpen Innovation Models

Established companies may acquire external innovations that offer the opportunity to develop new technology for scale-up.

Companies may also spinout technologies that were internally developed but are determined to be better developed and commercialized by others.

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Open Innovation ModelsOpen Innovation Models

Companies may spin out already commercialized technologies where more value can be realized, or acquire already commercialized innovation that can provide sources of new growth.

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Best Practices: NokiaBest Practices: Nokia’’s Venturings Venturing

Nokia moved beyond "not invented here" and are embracing the best ideas whereever they are.

Nokia's Venturing Organization is focused on corporate venturing activities that include identifying and developing new businesses.

Nokia have a group called Innovent that directly supports innovators with the hope of growing future opportunities for Nokia.

Strategies Hierachy

Blue Ocean Strategy

New Trends in Strategy

Strategies HierarchyStrategies Hierarchy

Blue Ocean StrategyBlue Ocean Strategy

Blue Ocean strategies, as described in the book “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne at INSIED, found that most enterprises' business strategy relied primarily on competition which only results in a “Red Ocean,” where the costs of competition are very high and the rewards are relatively low.

Blue Ocean StrategyBlue Ocean Strategy

To maintain sustainable growth, the companies need to go beyond competition and create a new market- Blue Ocean.

The Blue Ocean Strategy provides a framework and tool set for discovering new markets in traditionally filled spaces by changing the nature of competition away from the normal direction of the industry.

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Blue Ocean StrategyBlue Ocean Strategy

The main idea of Blue Ocean Strategy is how to change the rules and lift the constraints through the value innovation.

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A Good Blue Ocean StrategyA Good Blue Ocean Strategy

Focus: a good strategy has a focus, and a company's strategic profile should clearly show it.

Divergence: the value curve of blue ocean strategy always stand apart from the competitors.

Compelling Tagline: a good strategy has a clear-cut and compelling tagline.

A Good Blue Ocean StrategyA Good Blue Ocean Strategy

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PriceAmenities

Equipment

Instruction

Environment

ConvenienceFun

B.O. R.O.

Tagline

Focus

Divergence

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Best Practices: Best Practices: SaviSavi for RFID Businessfor RFID Business

The RFID market is highly fragmented, and many players are competing on small niches. Up to now there was only small numbers of cases open a RFID blue ocean market.

One example that open a RFID blue ocean market is the Savi technology which had a $425 million contract with the US Department of Defense in 2006.

Analysis of Analysis of SaviSavi’’ss StrategyStrategy

How do the company and its technologies provide end-user values across diverse needs?Right Offerings

Does the nature of the company's technology support innovative use and further development?Innovation Potential

To what extent is the technology offered can be integrated with legacy systems?Consistency

Measures a company's price competitiveness.Price Model

This value measures the technological stability of the current firm, compared with its competitors.Technological Stability

To what extent can the company's technology be complying with different industry standards?Standard Compliances

How the company and its products/services support specific applications/industry?Vertical Integration

DescriptionBlue Ocean Attribute

Analysis of Analysis of SaviSavi’’ss StrategyStrategy

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Vertical Integration (MU=M)

Standard Compliances (MU = L)

Price Model (MU=L)

Technological Stability (MU=H)

Consistency (MU = H)

Innovation Potential (MU=H)

Right Offerings (MU = H)

Savi R.O

Analysis of Analysis of SaviSavi’’ss StrategyStrategy

Savi’s strategy canvas shows three characteristics of a good strategy usually found in Blue Ocean cases studies:

1. Focus on factors such as consistency with the legacy systemand innovation potential by developing various platforms (multi-band, active and passive, sensor tags, wireless networks).

2. Divergence from conventional competition factors such as Gen2 standard compliances and low price devices development sacrificing the technological stability in operation.

3. Compelling Tagline in right offerings for end-user values across diverse needs.

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Strategy Innovation

Reengineering

Strategy Innovation

Issues

Reengineering Reengineering

Reengineering is the redesign of an organization's development & implementation processes for Innovation & Strategy.

Reengineering in innovation & strategy is need to capture the paradigm shift such as disruptive innovation, open innovation, and blue ocean strategy.

Strategy InnovationStrategy Innovation

Strategy innovation is an example of reengineering in innovation and strategy.

Strategy innovation is a shifting in organization's business strategy in order to create new value for both the customer and the organization.

Strategy innovation is a process of applying innovative thinking to the entire business model of a organization.

Strategy InnovationStrategy Innovation

Strategy innovation is a change form the “Play the game better” to “Making my rule of the game”.

Strategy innovation is Creative, Insights-driven, and Market-centric.

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IssuesIssues

What is the strategy innovation for the digital convergence?

Is the uIT-839 a strategy innovation for the u-Korea vision?

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Thank You!