CH18: New Market Offerings Flashcards
the 2 types of innovation
- incremental innovation (what most companies do)
- new to the world innovation (great risk and cost)
the 6 main ways to manage innovation
- 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
the 5 main stages in the stage-gate framework for innovation
- idea generation
- concept development
- business-model design
- offering development
- commercial deployment
idea generation stage
use broad strokes to outline how the company can address the focal customer need
concept development stage
development of a prototype of the offering that has the core functionality of the intended final offering
business model design stage
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
offering implementation stage
development of the resources needed to create the offering and develop a market-ready version of it
commercial deployment stage
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
the 3 main goals of the stage-gate framework
- 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
top-down idea generation
identify a market opportunity and develop an offering specifically designed to address this opportunity
bottom-up idea generation
start with an invention and then seek to identify an unmet market need
the 2 types of errors during idea validation
- failing to reject a bad idea
- rejecting a good idea
ways in which management tamps down on innovation (the graphic with the lightbulbs from the textbook)
- 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
the 5 types of exploratory research tools
- observing customers
- interviewing customers
- interviewing employees and experts
- analyzing the competition
- crowdsourcing
prototype
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
alpha vs beta testing
alpha testing is internal evaluation of the product; beta testing is conducted with potential customers
the 2 key questions to ask during concept validation
- 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?
the 3 aspects of business model design validation
- viability
- feasibility
- desirability
the 3 main components of a business model
- identifying the target market
- articulating the offering’s value proposition
- delineating the key attributes and benefits of the product offering
the 5 core resources needed for offering implementation
- business facilities
- supply channels
- distribution channels
- skilled employees
- access to capital
the 5 main steps in developing a market offering
- create the final product or service
- develop the brand
- set prices
- determine the sales promotions
- effectively communicate the offering’s benefits
commercialization
informing target customers about the company’s offering and making the offering available to these customers
selective market deployment
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
the 3 key activities of market expansion
- 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
the 5 categories of adopters of an innovation
- innovators
- early adopters
- early majority
- late majority
- laggards (resist until no longer possible)
