CH18: New Market Offerings

Question 1

the 2 types of innovation

Answer 1

• incremental innovation (what most companies do)
• new to the world innovation (great risk and cost)

Question 2

the 6 main ways to manage innovation

Answer 2

• assign responsibility to departments in charge of current offerings
• establish new product departments
• open innovation centers
• establish venture teams (intrapreneurs)
• create forums for sharing ideas
• create cross-functional teams combining different skillsets

Question 3

the 5 main stages in the stage-gate framework for innovation

Answer 3

• idea generation
• concept development
• business-model design
• offering development
• commercial deployment

Question 4

idea generation stage

Answer 4

use broad strokes to outline how the company can address the focal customer need

Question 5

concept development stage

Answer 5

development of a prototype of the offering that has the core functionality of the intended final offering

Question 6

business model design stage

Answer 6

creation of a business model that defines the offering’s target market, the value created by the offering in this market, and the key attributes of the offering

Question 7

offering implementation stage

Answer 7

development of the resources needed to create the offering and develop a market-ready version of it

Question 8

commercial deployment stage

Answer 8

communicating and making available the final offering to the target market; begins with launching the product in select markets before deploying to the rest of the target market

Question 9

the 3 main goals of the stage-gate framework

Answer 9

• develop a desirable offering that target customers will find attractive
• develop a technologically feasible offering that the company will find doable
• develop a viable offering that will create value for the company and its collaborator

Question 10

top-down idea generation

Answer 10

identify a market opportunity and develop an offering specifically designed to address this opportunity

Question 11

bottom-up idea generation

Answer 11

start with an invention and then seek to identify an unmet market need

Question 12

the 2 types of errors during idea validation

Answer 12

• failing to reject a bad idea
• rejecting a good idea

Question 13

ways in which management tamps down on innovation (the graphic with the lightbulbs from the textbook)

Answer 13

• we’ve tried it before
• this isn’t the right time
• it’s not the way we do things
• we’ve done alright without it
• let’s discuss it in the next meeting

Question 14

the 5 types of exploratory research tools

Answer 14

• observing customers
• interviewing customers
• interviewing employees and experts
• analyzing the competition
• crowdsourcing

Question 15

prototype

Answer 15

a working model of the offering that aims to flesh out the original idea and weed out potential problems before the actual offering is created

Question 16

alpha vs beta testing

Answer 16

alpha testing is internal evaluation of the product; beta testing is conducted with potential customers

Question 17

the 2 key questions to ask during concept validation

Answer 17

• Can a functional prototype and, later, a fully functional version of the offering be built?
• Does it fulfill the identified customer need better than the alternative options?

Question 18

the 3 aspects of business model design validation

Answer 18

• viability
• feasibility
• desirability

Question 19

the 3 main components of a business model

Answer 19

• identifying the target market
• articulating the offering’s value proposition
• delineating the key attributes and benefits of the product offering

Question 20

the 5 core resources needed for offering implementation

Answer 20

• business facilities
• supply channels
• distribution channels
• skilled employees
• access to capital

Question 21

the 5 main steps in developing a market offering

Answer 21

• create the final product or service
• develop the brand
• set prices
• determine the sales promotions
• effectively communicate the offering’s benefits

Question 22

commercialization

Answer 22

informing target customers about the company’s offering and making the offering available to these customers

Question 23

selective market deployment

Answer 23

market test; allows the company to conduct testing in a natural environment and observe how target customers, competitors, and company collaborators react to the offering

Question 24

the 3 key activities of market expansion

Answer 24

• ramping up production facilities for the offering
• promoting the offering to all target customers
• ensuring that the product is available to the entire target market

Question 25

the 5 categories of adopters of an innovation

Answer 25

• innovators
• early adopters
• early majority
• late majority
• laggards (resist until no longer possible)