E2, Ch 7 Cont. Flashcards
incremental innovation
builds on est. knowledge and results from steady improvement
radical innovation
novel methods and materials; entirely new knowledge base or recombination of existing knowledge
why incumbent firms tend to focus on incremental innovation (3)
- economic incentive of defending their position
- organizational inertia, aka having formalized processes/structure
- innovation ecosystem of relying on certain suppliers, buyers, etc.
architectural innovation
- existing tech. leveraged into new market
- known components used in a novel way
ex. iPod
disruptive innovation
leverages new tech in EXISTING markets; new product/process meeting existing consumer need
ex. Blockbuster –> Netflix
stealth attack
where a disruptive innovation invades the market from the bottom-up (capturing the low-end)
platform business
enables interactions and matches b/w producers and consumers, providing infrastructure and set governance conditions
ex. Instagram
pipeline business
linear transformation through value chain using R&D –> design –> manufacture –> sell
ex. Ford
players in a platform ecosystem:
owners – controller
producers – create platform’s offering
consumers – buyers
providers – interfaces for the platform (ex. Verizon)
3 advantages of the Platform Business Model
- scale more efficiently by eliminating gatekeepers
- unlock new sources of value creation and supply
- benefit from community feedback
leveraging _______ _____ is key to platform business success
network effects
ex. Airbnb business model
entrepreneurs create…
and commercialize…
…new products/processes and value for society
…ideas and inventions
entrepreneurship
process by which change agents (entrepreneurs) undertake economic risk to innovate
Overtime, the number and size of _______ change;
different ______ enter the market;
_______ and ______ changes;
and different _________ will be needed for the firm to perform.
competitors
consumers
supply and demand
competencies
