Foundations of Technological Innovations Flashcards
Why incumbents fail to react to disruptive technological innovations - 3 points
Economic, Organizational and Strategically
What is the economic explanation for incumbents failure to disrupt?
Incumbents are dis-incentivized to invest in new technological innovation due to their desire in consolidating their knowledge base, maintaining entry barriers, protecting existing revenue streams and preventing cannibalization of product lines
What is the organizational explanation for incumbents failure to disrupt?
Incumbents, due to their desire for predictability and reliability, develop rigid systems and strict routines, which in turn contribute to organizational inerti
What is the strategical explanation for incumbents failure to disrupt?
Incumbents are embedded within a value network of suppliers, distributors, retailers and customers to which they have made strategic commitments and are thus constrained by their agreements
What are disruptive and sustaining innovations? (Innovators Dilemma)
- Sustaining Innovation – Improves existing products and/or services through adding incremental value
- Disruptive Innovation – Creates new markets and value networks while disrupting existing ones
What is value?
Benefit or feature, that the customer finds useful or something worth.
How do you create value?
Value is created when an innovation satisfies a specific need of a target audience for which the latter is unable to fulfill on his/her own
What is a Value Proposition?
Description of the value that a product or service will provide to a consumer
What 4 elements do a Value Proposition consist of?
Capability, Impact, Proof and Cost
What does Capability in a Value Proposition mean?
What is unique about the product or service?
What does Impact in a Value Proposition mean?
How does the product or service benefit the market?
What does Proof in a Value Proposition mean?
What evidence is there to substantiate your value proposition?
What does Cost in a Value Proposition mean?
How much does it cost to realize the value of the product or service?
What are 5 factors influencing the diffusion of Innovation?
Relative Advantages, Compatibility, Complexity, Trial ability and Observability.
What does Relative Advantages mean in diffusion of Innovation?
Improvement over previous generation
