Lecture 3 - Innovation Strategy Flashcards
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What framework do Chandy and Tellis propose?
the types of new products framework
The framework enhances on previous arguments of radical innovation, firms need to be willing to cannibalise
Uses newness of tech and newness to customer to provide 4 dimensions of innovation
what does newness to customer mean?
offering newness to customers per pound spent, are they getting value in terms of price? (IMPORTANT)
Give an example of radical innovation
Open AI, MPesa - first mobile payment system
Tesla electric cars
How to make Strategic Entrepreneurship work + reference?
Combine multiple strategic entrepreneurship strategies (opportunity seeking and advantage seeking) to develop explorative and exploitative innovations to become innovation ambidextrous
Innovation ambidextrous leads to profit as a performance outcome
(Hughes et al. 2021)
Give an example of an organisation that got ambidexterity right
USA Today
By mid 90s they realised they were losing customers to the internet, so they released USA today, by hiring internet savvy individuals rather than just journalists
What is the challenge of Strategic Entrepreneurship + reference?
Challenge = Balancing strategy and entrepreneurship
Strategy:
- Designing the firms scope
- Managing the firms resources
- Developing competitive advantages
- Advantage seeking behaviour
Entrepreneurship:
- Organisational renewal
- Opportunity seeking behaviour
- Creating newness
- Creating units
Strategic entrepreneurship:
- Balancing exploration (radical innovation - long term) and (incremental innovation - short term)
- Continuous stream of innovation for short and long term success
(Ireland and Webb 2007)
Explain the new product planning process + reference
Come up with idea, screen it against criteria, conduct business analysis (could include market forecast, position to yield profits)
Hooley et al. 2004
Explain the structured stage gate process + reference
At each stage of the new product planning process there will be information collected and then followed by a gate: Go/Kill decision (continue or stop the process)
Cooper (2008)
What are the 7 stages included in structured NPD process: knowledge integration + reference
- Product development and testing capability (NPD process execution)
- Marketing technical integration (NPD integration mechanisms)
- Commercialisation capability (NPD process execution)
- New product implementation capability (NPD integration mechanisms)
- New product competitive advantage
- Penetration pricing capability
- New product performance
(Robson et al. 2022)
What are the controls in the structured NPD process: knowledge integration + reference?
Controls:
- firm size
- NPD experience
- NPD resources
- Market turbulence
- Technological turbulence
- Market potential
(Robson et al. 2022)
What is the 1. ‘Product development and testing capability in the structured NPD process: knowledge integration + reference?
Product development and testing capability
A strong competence in product development and testing
Includes:
- Technical expertise to build product effectively
- Rigorous testing
- Getting initial market feedback
Robson et al (2022)
What is the 2. ‘Marketing technical integration’ in the structured NPD process: knowledge integration? + reference
Marketing technical integration
How well the marketing team collaborates with the technical team
The better the collaboration, the shorter the time between product development + testing and the commercialisation, the better the likely product performance in meeting consumer demands
(Robson et al. 2022)
What is the 3. ‘Commercialisatin capability’ in the structured NPD process: knowledge integration + reference?
Commercialisation capability:
The skill in managing the product line and how the company connects with the market after launch
Using the market feedback to make continuous improvements to the product (similar to Kaizen)
(Robson et al. 2022)
What is the 4. ‘New product implementation capability’ in the structured NPD process: knowledge integration? + reference
New product implementation capability
- The systematic learning and application of marketing strategies across all of the companies NPD projects
Includes:
- Evaluating the marketing strategies used and their effectiveness
- Compare to other strategies
- Make adjustments for other NPDs
(Robson et al. 2022)
What is the 5. ‘New product competitive advantage’ in the structured NPD process: knowledge integration + reference?
New produc competitive advantage:
- The long run competitive advantage based on the adaptations made from the initial launch, previous products, market analysis, and customer feedback
(Robson et al. 2022)
What is the 6. ‘Penetration pricing capability’ in the structured NPD process: knowledge integration? + reference
Penetration pricing to quickly gain market share in dynamic market
However, strong penetration pricing capability can lead to:
-Customers believing price is the USP, therefore not recognising the products quality and innovations that other competitors dont have
- Customers unwilling to pay higher prices if they can get high quality at a lower price
- Perceptions that low price = low quality
(Robson et al. 2022)
What is the 7. ‘New product performance’ in the structured NPD process: knowledge integration + reference?
New product performance:
- The performance of the product after the adaptations, innovations pricing strategies, market analysis etc
- Not the initial performance based on the first version of the product
(Robson et al. 2022)
What is an example of a company using Robson et al (2022) NPD process + how do they achieve this + criticisms of this approach and company?
Shein - Chinese fast fashion company
Their practices align with this approach of quickyl getting products to market, without making them perfect (Robson et al. 2022)
Good:
- Gained significant market share quickly + internationally
- Use of influencers to promote the company appeals to younger audiences
Bad:
- Ethical concerns regarding the extremely long hours and poor working conditions
- Have to source raw materials (e.g. cotton) rapidly to keep up with demand - questions over suppliers? links to supplying from forced labour in Xinjiang
- Environmental concerns
Explain the difference between incremental and radical innovation, providing an example of each
Incremental innovation involves small, gradual improvements to existing products, services, or processes, like adding a new feature to a smartphone
Radical innovation introduces entirely new products, services, or processes that disrupt existing markets, such as introduction of first personal computer
What is an ambidextrous organisation, and why is ambidexterity important for long term success?
An ambidextrous organisation is one that can simultaneously pursue both incremental and radical innovation, balancing exploitation and exploration
Ambidexterity is crucial for long term success because it allows a company to both refine its existing business and adapt to future market changes
Describe some characteristics of a BOP market?
Consists of over 4 billion people who live on less than $2/ day
They represent multiple cultures, ethnicity, literacy, capabilities, and needs and can be segmented in multiple ways
Market has around $5bn in purchasing power parity, meaning there is a larged untapped market, currently served by the unorganised sector that is often controlled by local monopolies
Name the two types of NPD integration mechanisms
1)Marketing-technical integration: defined as level of coordination between marketing and technical functions
2) New product implementation capability: pertaining to competence in executing, controlling, and evaluating marketing activities applied to NPD processes generally
