Chapter 2 + 6 - Innovation Flashcards
Innovation
- Creative destruction
- thinking outside the box
- leaving the realms of know and stable —> the unknown and uncertain
Innovation objects
- products innovation
- process innovation
Marketing innovation
Organizational innovation
product innovation
indroduction of goods/services => new / significantly improved with respect to its chracteristics/ intended use
process innovation
implementation of new/ improved production/ delivery method => significant changes i. techniques, equipment and/ or software
marketing innovation
implementation of new marketing methods
=> significant changes im product design/ packaging, placement, promotion or pricing
organizational innovation
implementation of new organizational method in firm’s business practices, workplaces organization/ external relations
types of innovation
radical innovation
incremental innovation
disruptive innovation
architectural innovation
radical innovation
new technologies in new markets
incremental innovation
existing technologies in existing marktes
disruptive innovation
new technologies in existing markets
architectural innovation
existing technologies in new markets
first mover advantages
defence by entry barriers via - customer lock in (switching costs) - knowledge advantage (patents, secrecy) - experience curve advantage potential pioneer monopolist profits
first mover disadvantages
high risk and high costs
- competition against non-consumptiom
- lock-in effects leading = high fixed costs
- technological risks
- imitation and knowledge leakage risks
follower advantage
lower technological risks
non consumption barrier already overcome
low need to allocate contribution margins to fixed expenditures from R&D + asset depreciation
openess
indicator for techinology’s future value creation potential:
- compalilty with established technology
- potential for future development
- breadth of application possibilities
- network effects
innovation’s technology stages
- embryonic technology
- pace maker technology
- key technology
- basic technology
embryonic technology
laboratory stage => some limited commercial experimentation
- high R+D investment needed
- very high risk + difficult value assessment
- very high differentiation potential
pace maker technology
could become tomorrows key technology
- no reliable technological standard + potential f. diffusion
- latent potential f. high value but high risk
key technology
provide competitive advantage
- only used by major players
- potential differentiation + competitive advantage
basic technology
an organization must master to be an effective competitor
- established standard in whole industry
- no differentiation potential anymore
adaptor categories
- innovators
- early adopters
- early majority
- late majority
- laggards
attractiveness of technology depending on diffusion + differentiation
lower diffusion -> higher differentiation -> higher market potential -> higher attractiveness
Technology
knowledge, facts, and abilities for solving technical problems
+
equipment and methods for the practical realization of (scientific) results
Technology-Portfolio-Analysis
- Illustration of current and future technology position possible
- Evaluation along external (independent) and internal (dependent) criterion
- Recommendations for actions concerning a company’s technology strategy
Technology-Portfolio-Analysis steps
- Identification of technology
- Evaluation and positioning of a technology according to
a) Evaluate a technology’s attractiveness
b) firm’s (relative) resource strength (with regards to the respective technology) - Deduction of norm strategies and recommendations for action
- Transformation of technology portfolio
Tools for innovative thinking/ parallel thinking
- reversed brainstorming
- morphological matrix
- parallel thinking tool: six thinking heads
reverse brain storming
- define topic + goal
- reverse goal
- classical brainstorming
- reverse ideas
- evaluate ideas => potential solution/ attributes of a solution
morphological matrix
- attributes of examined object listed as matrix columns
- vary attributes in as many combinations as possible
- selecting one entry per column => creating of a new product ( modes. randomly/ focus on interesting combinations)
- evaluate combinations value generation (marketability=
six thinking hats
- white hat (paper) information, facts
- green hat (growth) creativity {new ideas/ solutions}
- black hat (the judge’s robe): caution
- yellow hat (Sunshine) Logical positive
- red hat ( attective) feelings
- blue hat (Sky) overview
advantages of six hats
- give direction + framing to parallel thinking
- shift from personal preference centrism => to thinking performance
- participants employ all modes of thinking + faster meetings
Business model risk analysis
sensitivity analysis
scenario analysis
Monte Carlo simulation
sensitivity analysis
one parameter varied - rest constant
+ impact of each parameter regarding NPV, Tornado Chart
family firm
one/ several families hold collectively >50% of a firm + exert influence on its strategic course via the board / owner management => + sustainable across generations
hidden champions
- family
- small (revenue < 5billion)
- hidden
- champion
Technology-Portfolio-Analysis Aim
evaluation of applied, new/ emerging + old technologies to support strategic decisions
identification of investment needs
scenario analysis
several parameters varied
+ comparisons of interesting/ feasible scenarios
Monte Carlo simulation
all parameters varied simultaneously using probabililty distributions
+ risk profile, overview of all outcomes
