Employee-based and incremental innovation in public services
Types of Innovation Types of Innovation Incremental Innovation Architectural Innovation Modular...
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Transcript of Types of Innovation Types of Innovation Incremental Innovation Architectural Innovation Modular...
Types of Innovation Incremental Innovation Architectural Innovation Modular Innovation Radical/Disruptive Innovation
time
PerformPotential
emergent growth mature decline
First Mover / Follower
Characteristics Emergent Growing MatureRevenue Growth Fast (?) Moderate SlowStability Low Moderate HighUncertainty High Moderate LowIndustry Rules ?? Fluid FixedCompetitiveness Low Moderate High
Type of Industry
Advantages Disadvantages
Advantages◦ Create the standard◦ Low-cost position◦ Intellectual property◦ Tie up resources◦ Increase switching
costs for producer◦ Increase switching
costs for customer
Disadvantages◦ Advantages can be
short-lived◦ Higher development
costs◦ Competitors violate
intellectual property◦ Greater uncertainty◦ Consumer
reluctance
Pioneers gain significant sales advantages but incur larger cost disadvantages relative to a fast follower entrant
ROI pioneers < ROI fast followers First mover more likely to attain strategic
resource (Starbucks busy corner strategy)
With insufficient information early entrance can lead to large costs
Too long, firm may lose the first-mover advantage
Cas
h F
low
Innovation No Competition Low Competition Strong Competition
Window of Opportunity
First MoverFollower
Beta vs VHS Prodigy, CompuServe, AOL When is a first mover strategy called for ?
Innovation EasyMarkets Underserved
What issues would you like to see solved? Break in groups of 3 or 4
Complements to a product◦ Hot dogs & mustard◦ Starbucks and Barnes & Noble
Partnerships◦ Calyx & Corolla partners FedEx (floral delivery)◦ MicroSoft & Mac – spreadsheet & graphical apps
(allowed MicroSoft to exploit Apple’s graphical interface & create windows)
Innovation is commercialized invention 6% of independent inventions make it to
market Success rate for inventions in established
firms 4 times as high Invention to Venture can be a long road
(Chester Carlson invented photocopier in 1942. Xerox introduced first copier in 1960).
Importance Radicalness Patent Scope
Importance◦ Magnitude of economic value of invention
Radicalness◦ Market effect of the commercialized invention
(disruptive innovation) Patent Scope
◦ Breadth of intellectual property protection
Chapter 5: Figure 5.7
Disruptive or radical innovations introduce a set of attributes to a marketplace different than the ones that mainstream customers historically have valued, and the products often initially perform unfavorably along one or two dimensions of performance that are particularly important to those customers.
Current performance of the innovation
Range of performance required in the mainstream market
Expected Trajectory
Now Time
High
Performance
Low
The Expected Trajectory of a Disruptive Innovation
Innovation StrategiesInnovation Strategies
55
Technology Ventures: From Idea to Enterprise
New Technology
New Invention
CharacteristicsImportanceRadicalnessPatent Scope
Avail Resources Commercialize
New Firm
Capabilities /Knowledge of
EntrepreneurialTeam
CharacteristicsOf
Industry
No Yes
Innovation based on invention & creativity and is defined as invention that has produced economic value in the marketplace.
Innovation based on commercialization of new technology◦ Skis – Snowboards◦ Schwinn bicycles to mountain bikes
Weird Video
Lead users ◦ Product ideas but not average users◦ Sliced peanut butter
Build it & they will come (often fails)◦ Assumes customer will do what they say
(fertilizer vs organic fertilizer) Market analysis
Describe The Problem
Incubateobserve problem
Brainstorm
InsightsInventive think
Build / TestPrototype
Evaluate / TestIdeas
Start
Neither the first companies to use technology nor the companies with the best technology win
Companies with right application for the technology win
Technology Factors• Feasibility• Performance• Manufacturability
Business Factors• Vision• Target Market• Value Proposition
Strategy• Industry/Competitor Analysis• Expected Competitive Adv.
Expected Economic Results• Revenue / Profitability• Return on Capital• Time to profitability