key terms week 7 Flashcards
Innovation Ecosystem
the collaborative arrangements through which firms combine their individual offerings into a coherent, customer-facing solution.
Complementor
a third-party entity or product that enhances and adds value to a core product or service, often through integration, cooperation, or compatibility, fostering mutual benefits in a complementary relationship.
Project risk (or “initiative risk”)
This type of risk refers to uncertainties and challenges specific to individual projects or initiatives within the ecosystem
- feasbility of the product
- value to customer
- supply chain appropriateness
- project team quality
- changes in market demand
The firm must decide which initiative risks to manage internally and which are better handled by a partner.
Interdependence risk
the potential disruptions or difficulties arising from the reliance on external partners, technologies, or factors outside an organization’s control in the innovation process.
The more dependent an innovation is on other developments, the less control it has over its own success.
Integration risk
In many ecosystems, intermediaries are positioned between the innovation and the final customer. The further up the value chain an innovation resides, the larger the number of intermediaries that must adopt it before it can reach volume sales. As the number of intermediaries increases, so does the uncertainty surrounding market success. This uncertainty is called “integration risk”.
Value blueprint
A tool for strategic analysis that outlines how different participants within an ecosystem create, deliver, and capture value. It helps visualize the roles and interactions of various stakeholders, including platform providers, complementors, and end-users, in the creation of a broader ecosystem.It allows its users to understand the dynamics of their ecosystems as well as identify
opportunities and risks.
Technology S-curve
A curve showing the evolution of an innovation in terms of performance or adoption, from its slow early beginnings to an acceleration phase, and its maturity/stability.
Technology lifecycle
The stages through which a technology/innovation goes through. This lifecycle often follows an S-curve, and has three stages:
1. the era of ferment
2. the era of incremental change (following the emergence of a dominant design)
3. the era of maturity where the technology has reached its limit and its performance stabilises.
Sailing ship effect
When the introduction of a new technology accelerates the innovation of an incumbent technology. The incumbent technology goes beyond its “technological limit”, making the competitive race longer.
The causes of the sailing ship effect include: inertia, resistance to change, sunk costs, regulation, or also culture.
Its consequences include: making the race longer, inefficiency, stagnation, and loss of competitiveness
Dominant design
A (broad) product design that is adopted by a majority of producers. It typically includes a broad product architecture that gives the industry a focus for improvements (and criteria for performance). It is not necessarily the ‘best’ design, but a reasonable compromise among many performance variables.
Shake out effect
The exit of the majority of firms which had an alternative design following the emergence of a dominant design.
Learning effects
As a firm accumulates production experience, it learns: it becomes “better” at producing. This improvement is visible in the decreasing production costs, and the increasing product performance.
Network effects/externalities
Effects which arise when the benefits of an innovation/product to a user increases as the number of users increases. These arise due to the Installed base, and Complementary goods
Buyer Switiching costs
The cost a consumer would have to pay as a result of switching products
- Hardware and Software Integration: Apple’s iPhone ecosystem offers seamless hardware and software compatibility, fostering unity and convenience.
- App Purchases: Customers who have purchased apps from Apple’s App Store may resist switching to a different platform due to the loss of access to these apps.
- Data and Services Integration: Switching to a different platform may require the transfer of personal data, creating switching costs.
- Accessory Compatibility: Customers with compatible accessories may resist switching due to varying compatibility standards across ecosystems.
- Higher switching costs contribute to customer loyalty and competitive advantage.
enabling technology
Enabling technologies are **necessary components **for the performance or desirability of an innovation.
provides a foundational platform or capability upon which other innovations, products, or processes can be built.
E.G. Internet Protocol Network (IP) - enables communication and data exchnage around the world. - It has allowed other innovations like: web technoligies (www); cloud computing; internet of things (IoT); e-commerce; social media..
