Chapter 3 Types and Patterns of Innovation

Question 1

What is technology trajectory?

Answer 1

The path a technology takes through its lifetime. This path may refer to its rate of performance improvement, its rate of diffusion, or other change
of interest.

Question 1

What are the 4 most commonly used dimensions to categorize innovations?

Answer 1

product versus process innovation, radical versus incremental, competence enhancing versus competence destroying, and architectural versus component

Question 2

How are product innovations embodied?

Answer 2

Product innovations are embodied in the outputs of an organization—its goods or services, even if those products are services

Question 3

What are process innovations?

Answer 3

Process innovations are innovations in the way an organization conducts its business, such as in the
techniques of producing or marketing goods or services

Question 4

What are process innovations often oriented toward?

Answer 4

Process innovations are often oriented toward improving the effectiveness or efficiency of production by, for example, reducing defect rates or increasing
the quantity that may be produced in a given time

Question 5

How do new product innovations and process innovations often occur in tandem?

Answer 5

1. First, new processes may enable the production of new products.
2. Second, new products may enable the development of new processes.
3. Finally, a product innovation for one firm may simultaneously be a process innovation for another

Question 6

What is radical innovation?

Answer 6

An innovation that is very new and different from prior
solutions.

Question 7

What is incremental innovation?

Answer 7

An innovation that makes a relatively minor change from (or adjustment to)
existing practices.

Question 8

How is the radicalness of innovation sometimes defined as?

Answer 8

The radicalness of innovation is also sometimes defined in terms of risk. Since radical innovations often embody new knowledge, producers and customers will vary in their experience and familiarity with the innovation, and in their judgment of its useful-
ness or reliability

Question 9

How is the radicalness of an innovation relative>

Answer 9

the radicalness of an innovation is relative, and may change over time or competenceenhancing and competence ­ destroying innovation

A competenceenhancing innovation builds on existing knowledge and skills whereas a competence destroying innovation renders existing knowledge and skills obsolete. Whether an innovation is competence enhancing or competence destroying depends on whose perspective is being taken. An innovation can be competence enhancing to one firm, while competence destroying for another.
with respect to different observers. An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation
becomes more common

an innovation that is radical to one firm may seem incremental to another

Question 10

What is the difference between competence enhancing and competence- destroying innovation?

Answer 10

A competenceenhancing innovation builds on existing knowledge and skills whereas a competencedestroying innovation renders existing knowledge and skills obsolete. Whether an innovation is competence enhancing or competence destroying depends on whose perspective is being taken. An innovation can be competence enhancing to one firm, while competence destroying for
another.

Question 11

How are most products and processes hierarchically nested systems?

Answer 11

Most products and processes are hierarchically nested systems, meaning that at any unit of analysis, the entity is a system of components, and each of those components is, in turn, a system of finer components, until we reach some point at which the components are elementary particles

Question 12

What is component/modular innovation?

Answer 12

An innovation to one or more components that does not significantly affect the overall configuration of
the system.

Question 13

What is architectural innovation?

Answer 13

An innovation that changes the overall design of a system or the way its components interact with
each other

Question 14

What must firms understand when to adopt architectural innovation?

Answer 14

However, for a firm to initiate or adopt an architectural innovation typically requires that the firm have architectural ­knowledge about the way components link and integrate to form the whole system. Firms must be able to understand how the attributes of components interact, and how changes in some system features might trigger the need for changes in many other design fea-
tures of the overall system or the individual components.

Question 15

Are the dimensions independent or not and how are the innovations categorized>?

Answer 15

Though the dimensions described above are useful for exploring key ways that one innovation may differ from another, these dimensions are not independent, nor do they offer a straightforward system for categorizing innovations in a precise and consistent
manner.

Question 16

How share each of the dimensions relationships?

Answer 16

Each of the above dimensions shares relationships with others—for example, architectural innovations are often considered more radical and more competence
destroying than component innovations.

Question 17

On what does it depend how an innovation is described?

Answer 17

how an innovation is described on a dimension often depends on who is doing the describing and with what it is being
compared.

Question 18

What does a s-shape curve illustrate>

Answer 18

Both the rate of a technology’s performance improvement and the rate at which the technology is adopted in the marketplace repeatedly have been shown to conform to an
s-shape curve

Question 19

What is the difference between s-curves in technology performance and s-curves in technology diffusion?

Answer 19

Though s-curves in technology performance and s-curves in technology diffusion are related (improvements in performance may foster faster adoption, and greater adoption may motivate further investment in improving performance), they are fundamentally different processes.

Question 20

What is the S-curve of technological improvement>

Answer 20

When a technology’s performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then
accelerated improvement, then diminishing improvement

Question 21

Why is the performance slow at first?

Answer 21

When a technology’s performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then
accelerated improvement, then diminishing improvement

Question 22

Why is there an accelerated improvement>

Answer 22

However, as scientists or firms gain a deeper understanding of the technology, improvement begins to accelerate. The technology begins to gain legitimacy as a worthwhile endeavor, attracting other developers. Furthermore, measures for assessing the technology are developed, ­permitting researchers to target
their attention toward those activities that reap the greatest improvement per unit of effort, enabling performance to increase rapidly

Question 23

Why is there diminishing improvement?

Answer 23

However, at some point, diminishing returns to effort begin to set in. As the technology begins to reach its inherent limits,
the cost of each marginal improvement increases, and the s-curve flattens.

Question 24

With what is the technology’s s-curve plotted?

Answer 24

Often a technology’s s-curve is plotted with performance (e.g., speed, capacity, or power) against time

Question 25

Why must you be careful when plotting the technology’s s-curve against time?

Answer 25

If the effort invested is not constant over time, the resulting s-curve can obscure the true relationship.

If effort is relatively constant over time, plotting performance against time will result in the same characteristic curve as plotting performance against effort.

However, if the amount of effort invested in a technology decreases or increases over time, the resulting curve
could appear to flatten much more quickly, or not flatten at all.

Question 26

What is discontinuous technology?

Answer 26

A technology that fulfills a similar market need by building on an entirely new knowledge
base.

Question 27

What are the characteristics of discontinuous technology?

Answer 27

1. New products with high performance on different
   package of attributes
2. Performs far worse on attributes that are important
   in existing products
3. Strong performance increase on these latter
   attributes

Question 28

What is technology diffusion?

Answer 28

The spread of a technology through a
population.

Question 29

What is the difference in technology diffusion in comparison to technology performance?

Answer 29

Unlike s-curves in technology performance, s-curves in technology diffusion are obtained by plot-
ting the cumulative number of adopters of the technology against time.

Question 30

Why does technology diffusion an s-shape curve?

Answer 30

his yields an s-shape curve because adoption is initially slow when an unfamiliar technology is introduced to the market; it accelerates as the technology becomes better understood and utilized by the mass market, and eventually the market is saturated so the rate of new
adoptions declines.

Question 31

If a new technology is a significant improvement over existing solutions, why do some firms
shift to it more slowly than others?

Answer 31

The answer may lie in the complexity of the knowledge underlying new technologies, and in the development of complementary resources
that make those technologies useful.
Many potential adopters of a new technology will not adopt it until such knowledge is available
to them, despite their awareness of the technology and its potential advantages.
Furthermore, many technologies become valuable to a wide range of potential users only after a set of complementary resources are developed for them.

Question 32

How are s-curves of diffusion part of a function of- the s-curves in technology improvement?

Answer 32

As technologies are better developed, they become more certain and useful to users, facilitating their adoption. Furthermore, as learning-curve and scale advantages accrue to the technology, the price of finished goods often drops, further accelerating adoption by users.

Question 33

How can the S-curve be used as a predictive tool?

Answer 33

Several authors have argued that managers can use the s-curve model as a tool for predicting when a technology will reach its limits and as a prescriptive guide for whether
and when the firm should move to a new, more radical technology.

Question 34

What are the limitations of the S0cruve mdoel as a prescriptive tool?

Answer 34

First, it is rare that the true limits of a technology are known in advance, and there is often considerable disagreement among firms about what a technology’s limits will be.

Second, the shape of a technology’s s-curve is not set in stone. Unexpected changes in the market, component technologies, or complementary technologies can shorten or extend the life cycle of a technology.

Furthermore, firms can influence the shape of the
s-curve through their development activities.

Question 35

whether switching to a new technology will benefit a firm depends on a number of factors…..

Answer 35

(a) the advantages offered by the new technology,

(b) the new technology’s fit with the firm’s current abilities (and thus the amount of effort that would be required to switch, and the time it would take to develop new competencies),

(c) the new technology’s fit with the firm’s position in complementary resources (e.g., a firm may lack key complementary resources, or may earn a significant portion of its revenues from selling products compatible with the incumbent technology), and

(d) the
expected rate of diffusion of the new technology.

Question 36

How is the s-curve cyclical?

Answer 36

The s-curve model above suggests that technological change is cyclical: Each new s-curve ushers in an initial period of turbulence, followed by rapid improvement, then
diminishing returns, and ultimately is displaced by a new technological ­discontinuity.

Question 37

What is creative destruction?

Answer 37

The emergence of a new technological discontinuity can overturn the existing competitive structure of an industry, creating new leaders and new losers.

Question 38

What is segment zero?

Answer 38

the low-end market is not being served; it either pays far more for technology that it does not need or goes without. It is this market that Andy Grove, former
CEO of Intel, refers to as segment zero.

Question 39

What is the first step in an evolution model that was proposed by Utterback and Abernathy?

Answer 39

They observed that a technology passed through distinct phases. In the first phase (what they termed the fluid phase), there was considerable uncertainty about both the technology and its market. Products
or services based on the technology might be crude, unreliable, or expensive, but might suit the needs of some market niches. In this phase, firms experiment with different form factors or product features to assess the market response.

Question 40

What is dominant design?

Answer 40

A product design that is adopted by the majority of producers, typically creating a stable architecture on which the industry can
focus its efforts.

Question 41

What is the specific phase.

Answer 41

The dominant design establishes a stable architecture for the technology and enables firms to focus their efforts on process innovations that make production of the design more effective and efficient or on incremental innovations to improve components within the architecture. Utterback and Abernathy termed this phase the specific phase because innovations in products, materi-
als, and manufacturing processes are all specific to the dominant design.

Question 42

What is the era of ferment.

Answer 42

ike Utterback and Abernathy, Anderson and Tushman found that each technological discontinuity inaugurated a period of turbulence
and uncertainty (which they termed the era of ferment)

during the era of ferment different stakeholders might have different concepts of what purpose the technology should serve, or how a business model might be built around it.21 Thus, while the new technology displaces the old (Anderson and Tushman refer to this as substitution), there is considerable design competition as firms experiment with different forms of
the technology.

Question 43

When does the dominant design not command the majority of the market?

Answer 43

unless the next discontinuity arrived too soon and disrupted the cycle, or several producers patented their own proprietary technologies and refused to license to each
other.

Question 44

When does the incremental change happen?

Answer 44

the rise of a dominant design signals the transition from the era of ferment to the era of incremental change.22 In this era, firms focus on efficiency and market penetration. Firms may attempt to achieve greater market segmentation by offering different models and price points. They may also attempt to lower production costs by simplifying the design or improving the production process. This period of accumulating small improvements may account for the bulk of the techno-
logical progress in an industry, and it continues until the next technological discontinuity.

Question 45

Why do many firms cease to invest in learning about alternative design during the era of incremental change?

Answer 45

During the era of incremental change, many firms cease to invest in learning about alternative design architectures and instead invest in refining their competencies related to the dominant architecture. Most competition revolves around improving components rather than altering the architecture; thus, companies focus their efforts on developing component knowledge and knowledge related to the dominant architecture. As firms’ routines and capabilities become more and more wedded to the dominant architecture, the firms become less able to identify and respond to
a major architectural innovation.

As the firm’s expertise, structure, communication channels, and filters all become oriented around maximizing its ability to compete in the existing dominant design, they become barriers to the firm’s recognizing and
reacting to a new technology architecture.