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innovation I WILL PASS > Chapter 1,4,5 I WILL PASS > Flashcards

Chapter 1,4,5 I WILL PASS Flashcards

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1
Q

•creation of a novel device, method, or process for the FIRST TIME (up to prototype)

(the combination of existing cultural items into a form that did not exist before)

A

Invention

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2
Q
  • process of using knowledge to solve a problem

* An improvement of an existing technological product, system, or method of doing something

A

innovation

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3
Q

• the application (scientific knowledge for practical purposes) of tools, materials, processes and techniques to human activity

  • information tech
  • biotech
  • mechanically based tech
  • new materials
A

technology

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4
Q

the act of applying new knowledge for commerical or practical objectives

(new device, method or material)

A

Technological innovation

ex: thermal shirt

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5
Q

the knowledge used does NOT (directly) involve technology

  1. New ways of organizing the distribution of goods
  2. New financial products
  3. New marketing approaches
  4. New organizational forms
  5. New business models about tech innovation
A

Non technical innovation

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6
Q

companies invest in R&D with the goal of coming up with an innovative NEW product or process that will give them an ADVANTAGE over their competitors

A

planned innovation

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7
Q

NOT the result of a deliberate attempt to solve a particulate problem ,but by serendipity ( BY CHANCE)

A

accidental innovation

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8
Q

an innovation that is very NEW and DIFFERENT from prior solutions

-create NEW component with NO system change

  • new to world
  • new to industry
A

Radical innovation

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9
Q

an innovation that makes a relativity MINOR CHANGE from (or adjustment to) EXISTING practices

-IMPROVES component with NO system change

  • familiar
  • new to business unit
A

incremental innovation

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10
Q
  • IMPROVES the PERFORMANCE of existing products
  • does NOT CREATE NEW MARKET or value networks
  • creates NEW PRODUCT AND PROCESS that have lower environmental impact
A

sustainable innovation

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11
Q
  • simpler, smaller, cheaper (ex: external disk drive) product with LOWER performance in the dimensions relevant for the mainstream customers
  • IMPROVES on a dimension that the market does NOT initially VALUE whereas it is inferior on dimensions relevant for mainstream customers
  • product innovation on dimension that market initially does not value whereas inferior on dimensions relevant for mainstream customers: not very interesting for them
  • first create NEW MARKET and NEW CUSTOMERS, and eventually disrupts an existing market, displacing earlier tech
A

disruptive innovation

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12
Q

are embodied in the output of an organization in its goods and services : technical specification and quality improvements

ex: hybrid car, tablet computer, new medical drug

A

product innovation

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13
Q

are innovations in the way an organization conducts its business , such as in the techniques of producing or marketing goods/ services ( with or without tech)

(occur in tandem with other innovation)

A

process innovation

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14
Q

changes the LINKAGE between the component and how the components interact in order to improve the component by creating a new configuration

  • leaves the different components themselves intact
  • ex: desktop vs laptop
A

architectural innovation

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15
Q

changes the components from which innovation is CREATED in order to make a new component with no change to the system

  • does NOT effect linkage between components
  • types of incremental innovation that change the system
A

modular innovation

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16
Q

innovation that uses existing knowledge base, abilities, structure, design, production processes

  • incumbents since the old design is preserved
  • explanation why incumbents achieve radical innovation
A

Competence-ENHANCING innovation

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17
Q

innovation that turns the existing knowledge, ability are obsolete (no longer uses)

-new entrants: not burdened by existing designs and associated competences

A

competence DESTROYING innovation

18
Q

Why is technological innovation

important?

A

Innovation is the industrial religion for business and government

  • increase profits and market share
  • gov’t try to fix the economy
  • replace welfare economics
  • new tech that unites
19
Q

Why does technological innovation represent a source of value creation?

A

Creates:

  • value for customers
  • value for companies
  • competitive advantage
  • value of society
20
Q

What does the technology S-Curve represent?

A
  • The s-curve is a graphical representation of the development of a new tech over time
  • it compares some measure of performance of the tech with some measure of effect invested in its development (financial amounts, working hours)

-technology development over
time typically not linear (it depends on the effort)

-Performance of the tech, cumulative effort/ time *

21
Q

Who Shifts the S-Curve?

A

NEW ENTRANTS
bc incumbents have no incentive to introduce the new tech

  • incumbents have investments in existing tech
  • product with new tech would cannibalize sales
  • managers do not perceive new tech as threat
  • performance of old tech can still be improved
  • organizational obstacles to change
22
Q

-dominant design

-Technologies evolve through periods of INCREMENTAL
innovation, INTERRUPTED by periods of RADICAL innovation

-The development of a RADICAL innovation leads to the “FLUID
phase”

  • eventually, firms converge to a dominant design
  • DOMINANT design leads to the “SPECIFIC phase”
  • Shift towards process innovation over time
A

Abernathy and Utterback model:

23
Q

a phase in which many firms enter and compete
on the basis of different product designs

  • radical innovation leads to
  • dominated by PRODUCT innovation
  • Period characterized by high uncertainty (Customers do not have clearly defined preferences and tech uncertainly)
  • market is small and are developing
  • market entry: competition based on the basis of the product design
  • production is inefficient
A

FLUID

phase

24
Q

a phase
characterized by incremental innovation, specially process
innovations

  • dominant lead to
  • common way to design the product the dominate design

-Relevant competition dimensions change to product
quality, costs, manufacturing capabilities, and
distribution

  • Intensified PROCESS innovation: reducing costs
  • Exploitation of economies of scale
  • Industry consolidation: many firms exit ( those least able to adopt to the dominant design)
A

SPECIFIC phase

25
Q

In which cases do incumbents launch radical innovations?

A
  • Incumbent achieve radical innovation with competence enhancing
  • Radical innovation leads to the fluid phase
26
Q

What does technology “diffusion” mean?

A

the process for which an innovation gets adopted over time
(pace in which a technology is adopted by potential
users)

  • slow process
  • average 13.6 years
  • a lot of variation in the acceptance
  • result of a lot of individual adoption decisions
  • graph: % of ownership to number of years
  • if not ____. social and economic impact would be meaningless
27
Q

What does the adoption S-Curve represent?

A

Curve shows the cumulative adoption at each point in time

-The normal distribution of adopters translates into an S-shaped
pattern of demand growth over time

-graph: percent adopting to time

-The S-shaped pattern indicates that there is an
acceleration point at which a market “takes off”

28
Q

what are the 5 adoption groups in order?

A
  1. innovators
    • adopt new tech immediately
    • high risk, low price sensitive, superior knowledge
  2. early adopters
    • follow the innovators
    • value opinions, technical aspects, low price sensitive
  3. early majority
    - adopt new tech just before the average market
    - Recognizes value, product feature, usefulness
  4. late majority
    • adopt after other customers have adopted the tech successfully
      - Skeptical, must be convinced, Easiness-to-use, reliability, quite price sensitive
  5. laggards
    • prefer to avoid adoption as long as possible
    • small group
29
Q

Why is it important for a firm to distinguish the different types of
technology adopters?

A

Adopters are heterogeneous show different propensities to adopt new innovation early after launch

  • regarding their motivations to adopt
    innovation
    -their risk attitude and their willingness to pay: leads to adoption
    S-Curve
30
Q

What is the distribution of adopters over time?

A

the distribution of adopters over time

  • the # of consumers who decide to buy the innovations every point of time
  • most common _____ pattern follows a normal distribution
  • 5 groups
31
Q

Is technological and marker “evolutions” of an

innovation are closely related?

A

•Yes, Technology performance and technology diffusion are interdependent

  • tech adoption depends on tech performance
  • adoption affect tech evolution
32
Q

what does diffusion depend on?

A

Diffusion depends also on further determinants:

  • product & etch
  • price and cost
  • ecosystem
  • complementary goods
  • simplicity of use, requirement of behavioral changes
  • investment return
33
Q

What happens to consumer electronic diffusion rates?

A

prices strongly DECLINING

  • price sensitive of early majority
  • economics of scale
34
Q

How can a company cross the chasm?

A

The majority of firms NEED TO REACH a critical mass of mass of customers to reach profitability

  • potential market is small
  • likely to go bankrupt if they do not achieve the early majority
35
Q

main challenge is to reach the early majority : critical mass
- due to having different needs that a firm need to adopt to

A

crossing the chasm

36
Q

Crossing the chasm: In which cases it is specially

important than it does?

A

•A COMPREHENSIVE SOLUTION to customers’ problems is
required:
- Adjusting product solution, customer service,
manuals, etc.

•Need for a VERTICAL MARKETING strategy:
- to focus on
customers in a single industry or adopter group
~Rather than a horizontal marketing strategy
~To focus on the segment that may value the most the
product

37
Q

serving

customers in multiple industries

A

horizontal marketing strategy

38
Q

to focus on

customers in a single industry or adopter group

A

VERTICAL MARKETING

39
Q

implication of estimating diffusion patterns?

A
  • Evaluating market attractiveness at a given point in time→
    when to enter market
  • product design variations are required
  • Adjusting pricing to consider heterogeneous price elasticities
  • promotion strategies
  • forecasting demand, production, investment
40
Q

used to predict innovation adoption pattern over time and considers distribution of innovators vs. Imitators.

A

bass model

41
Q

Which is the opposite alternative of adoption?

A

One alternative: Approximating it with the market size of the
existing technology

innovation I WILL PASS (2 decks)

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