Mid-Term

Question 1

There are a variety of problems associated with the integration between product and process design. Briefly describe five approaches that can be taken to address these problems.

Answer 1

1. Foster communication: Knowledge Transfer (Internal & External)
2. Develop new rewards and incentives
   to foster teamwork and encourage excellent performance
3. Organizational structure
4. Use new technologies
5. Project management
   One additional: Pilot line testing

Question 2

Briefly describe what is a lead-user?

Answer 2

Leader users are those who face needs (i.e. technology necessities) now when it usually takes general marketplace months or years to face. These “experts” are invaluable source of information for manufacturers and often have already created innovations to solve their own leading-edge needs.

Question 3

What are the challenges or limitations associated with undertaking lead-user research.

Answer 3

choosing the right team, testing is limited to team, secretive projects not good for disclosure to lead users

Question 4

Product and process life cycles go through stages of innovation (fluid, transitional and specific patterns). Briefly describe the nature of the product and process innovation that occurs in fluid stage

Answer 4

• early stages of the product life cycle
• level of product prototype innovation is high
• firms modify, change, and update product to establish dominant design that best fits the needs of potential users.
• Ex. 1909: US auto industry had 69 firms. Used steam engine, electric, and gasoline for power. 1916: 35 firms.

Question 5

Product and process life cycles go through stages of innovation (fluid, transitional and specific patterns). Briefly describe the nature of the product and process innovation that occurs in transitional stage

Answer 5

• starts when a dominant design is established
  (1918: Ford Model T was gas powered was introduced in 1908 and became the dominant design. Key was vadamian steel – lighter. Only ½ of the 69 auto firms survived through 1916. By 1923, only 8 firms were left. By 1960, only 4 left (GM 50% market, Ford, Chrysler, American Motors).
• emphasis shifts to process innovation in order to -provide mass production capability (as product life cycle enters growth)
• requires a shift from general purpose to specialized equipment
• level of product innovation decreases dramatically

Question 6

Product and process life cycles go through stages of innovation (fluid, transitional and specific patterns). Briefly describe the nature of the product and process innovation that occurs in specific pattern stage

Answer 6

-Incremental process innovations to further reduce cost and enhance quality
-Due to above, the production process becomes more specialized.
-Firm becomes highly inflexible, and vulnerable to a revolutionary new product that makes their existing product and process obsolete.
(Growth and maturity of product life cycle.)

Question 7

What challenges exist in today’s marketplace that motivate firms to improve resource flexibility?

Answer 7

1. trend for smaller batches of more diverse products
2. product life cycles decreasing
3. buffer against uncertain demand
4. increasing portion of profits deriving early in product life cycle
5. ability for mass customization impacts marketplace
6. rapidly changing technology
7. increased competitive environment

Question 8

What are the key tradeoffs for a high-volume producer considering the investment in a flexible versus dedicated facility?

Answer 8

Flexible facility benefits over Dedicated:

• production flexibility: product range capability that can be created on the facility
• mix flexibility: work on small batches simultaneously (“?” Dum Dum Lollipops)
• changeover flexibility: change-over of high-volume products (quick to market)
• modification flexibility: implement design changes on a product (modular)
• routing flexibility: change process flow machine sequence (delivery dependability)
• expansion flexibility: expand system’s size as needed
• volume flexibility: operate at different levels of output for different parts
• information system flexibility: add-on features and modify component

Dedicated facility benefits over Flexible:

• more efficient
• lower cost

Question 9

Briefly describe the steps taken to establish an aggregate project plan.

Answer 9

1. Classify project types: resources, time, risk; mgt involvement
2. Estimate the time and resources (skills and technology based) needed for each project based on past experience.
3. Identify available resources capabilities.
4. From (2) and (3) consider outsourcing or partnerships.
5. Determine the desired mix (allocation) of projects among three types.
6. Estimate the number of projects within each project type that can be supported by existing resources (funnel). Decide those to pursue versus cut.
7. Learn and develop methods to improve development capabilities.

Question 10

Briefly describe the five phases of the stage gate approach to product development. What are potential limitations of the stage gate approach?

Answer 10

0. Planning
   
   • Includes Project Mission Statement
1. Concept/Development
2. System Level Design
3. Detail Design
   
   • How will the system work together
4. Testing/Refinement
   
   • Initial production version as an output
5. Product Ramp-up

Question 11

Briefly describe what is meant by market pull and technology push.

Answer 11

• Technology Push: New Ideas trigger linear sequence of events, eventually resulting in an application of the invention
• Market Pull: Market needs create new product opportunities which in turn stimulate R&D to determine if a solution (new product) is possible

Question 12

Briefly describe the difference between revolutionary versus incremental innovation.

Answer 12

-Revolutionary Innovation: Major product or process breakthrough that
+Rarely occurs
+Creates a new industry
+Significantly changes mature industries
+May result from the “creative symbiosis of previously unrrelated technologies”

-Incremental Innovation: Relatively common product or process improvements that occur within the firm and are necessary for its survival
+i.e. reinforces existing industry structure

Question 13

In what way(s) are these two types of classification systems (tech push/market pull and revolutionary/incremental innovation) related to one another?

Answer 13

-Technology push tends to be a revolutionary innovation
+High risk, high reward

-Revolutionary innovation/market pull: Test marketing does not always provide an accurate indication of what the consumer wants
+Low risk, low reward

Question 14

What factors external to a firm affect the likelihood of success of an innovation?

Answer 14

1. Prevailing economic environment.
   
   • Steady growth and low interest rates help innovation.
2. Market uncertainty
3. supply factors (natural resources availability) Ex. oil embargo and small cars.
4. Union
5. industry characteristics (age) Industry life cycle (where on techn-S curve?)
   
   • young industries: many products and few process innovations
   • mature industries:small number of incremental product/process innovations
   • Ex. Auto industry started with a very large number of firms; cars used different sources of energy; lots of innovations (introduction phase). Finally, Ford’s design dominated (started growth phase). By 1970s, mature industry offering incremental improvements.
6. competitors: number and size (resources available)
7. network externalities
   
   • value of innovation to one consumer depends on usage by others; email.
8. Existence of complementers; integrators; suppliers
9. availability of other (supportive) innovations (Sikorsky; DNA required innovations from chemistry, biology, physics, …) (HP case)
10. government policies
    
    • (ex. R&D incentives and tax breaks; legal environment) (MITI protection from imports) Enforcement of patents (India); EPA; FDA. Trade laws.Patent protection.
11. availability of large sources of funding (government or private)
    
    • (ex. helicopter, penicillin, space program, synthetic fibers from WWII)
12. educational opportunities (availability of skilled workers)

Question 15

What factors internal to a firm affect the likelihood of success of an innovation?

Answer 15

• ability to keep innovation proprietary (also external elements)
• organizational size
• human resource practices: KEY impact quality of hiring, retention, and knowledge available
• membership in R&D consortium or labs; links with universities
  open innovation(GE)/innovation showrooms (3M)/Innovation center
• Engage customer, supplier and distributor in innovation & development phases
• Understand emerging markets and technology trends
  -Project Selection
  -Product Development
  -Information & Communication Systems: Knowledge Transfer
  -Commercialization

Question 16

What is the technology-S curve? Explain

Answer 16

The technology S-curve is a useful framework describing the substitution of new for old technologies at the industry level. 
Stage 1 = Emergence
Stage 2 = Rapid Development
Stage 3 = Declining Improvement
Stage 4 = Maturity

Question 17

(a)Describe four technology innovations that significantly changed the existing marketplace. (b) Describe four ways in which technology innovation enabled a firm to respond to changes in the existing marketplace.

Answer 17

iPhone
- iPhone allowed firms to re-invent what the usual phone can do. Integrated the camera, phone, and GPS device into one device

The Internet
-Gave individuals access to information which was previously much harder to obtain. Also paved the way for social media platforms and e-commerce.

Ford Model T
-Made traveling from easier and much more efficient than by horse

Television
-Provided video to what was once just audio (radio)

Question 18

Explain and contrast the competitive priorities and resource requirements of a flow shop and a job shop. Specifically discuss the role of knowledge embedded in the workforce and technology. In what ways are flow shop and job shop characteristics different in manufacturing versus services?

Answer 18

• Flow shop (product-focused, think mass-produced commodity product) prioritizes volume, low-cost, economies of scale, consistency, low knowledge needed in workforce/technology, automation (dedicated manufacturing technology, which is fixed and cannot be changed), low price
• Job shop (process-focused) prioritizes customization, complexity - highly skilled & cross-trained workforce, quality, flexibility (as pertaining to short product life cycles or meeting custom orders), price not important (premium pricing possibility), low volume

-Differences in manufacturing
+Flow shop utilizes dedicated technology for mass manufacturing
+Job shop utilizes flexible technology for customized orders or many product lifecycles

-Differences in services
+Flow shop - low knowledge workers trained to yield high volumes
+Job shop - highly skilled workers

Question 19

What were 4 challenges faced by ITC in designing and implementing the e-choupal system? How did they respond to each challenge?

Answer 19

1. Fragmented farms
   - Leveraging the existing choupals in each village to base their eChoupal system
2. Overdependence on monsoons
   - Created a weather page in order to give the farmers access to regional weather predictions
3. Lack of sophisticated inputs and farming practices
   - Created “Best practices” & “crop information” pages to allow farmers to produce better crops
4. Long term growth opportunities
   - After establishing their market in soybeans, they added three new products to their portfolio: coffee, seafood, and wheat

Question 20

What did we learn from the Campbell Soup case in terms of (i) the interface between R&D and other functions of the organization and (ii) incremental versus revolutionary innovation?

Answer 20

-Interface between R&D and other functions
+It’s important to have all individuals working at the same plant at the same time
*There were individuals living in other states and havng to fly in, thus reducing ability to effectively do their research
+It’s important to run the test from start to finish instead of individual segments
+Get everyone involved & devoted early

-Incremental vs revolutionary innovaton
+Plastigon was planned to be a revolutionary product that didn’t yield much reward in the end.
+Campbell attempted to make a revolutionary new product for an existing market

Question 21

How would you describe BofA’s system for developing new services? Focus on (i) process, (ii) organization, (iii) management and (iv) culture.

Answer 21

• Process
  1. Idea conception
  2. Planning & Design
  3. Implement
  4. Test
  5. Recommend

-Organization
+Having a separate R&D allowed them to focus on innovation rather than a group that was supposed to also show operating results.

-Management
+Created a separate R&D team for the individual project.
+Used real-world banks to implement their test products.
+CEO introduced a Six Sigma quality program to reduce errors and streamline processes.

-Culture
+Low R&D budget allocation
+Considered to be more of a pocket of innovation

Question 22

In what ways was the Iridium system design a poor match to the context in which it was to operate? How could this design flaw have been prevented or reduced?

Answer 22

• Iridium’s marketing plan targeted a segment – business travelers – whose needs were being met by cell phones that offered significantly better value than Iridium.
• The design of Iridium phone hindered consumer adoption (e.g. moving cars, inside buildings, etc.)

-How it could have been prevented
+Better collaboration with the marketing department could impact the outcome and measure its marketability

Question 23

What types of early feedback on performance would have been helpful in the Iridium development project

Answer 23

• Iridium should have reevaluated their position. By 1998, much cheaper and readily available cellular technology had expanded in unforeseen ways.
• Iridium could have tested the system of satellites by putting a subset of satellites in space prior to putting the entire fleet of satellites up.

Question 24

In the spirit of learning from failure, what could the Kittyhawk development team have done differently to increase chances of success?

Answer 24

-Should have done their own marketing research
+They listened to the PDA makers that PDAs are the next big thing

-Set more realistic forecast/market-share/growth-rate/revenue
+Marketing research: difference between “I like it” and “I will buy it”
+Look for [other] markets that are already there (not just mobile computing – mobile computing was uncertain/risky)

Question 25

What could HP corporate management have done differently to increase the chances of success in the Kittyhawk project?

Answer 25

-Develop products consistent with company strategy/culture
+Company has always been participating in niche markets (elegant, sophisticated products) and hasn’t made “dumb” products
+Seek expertise from outside consultant (considering that this new initiative was outside of firm’s traditional direction)
+Good shot of revenue doesn’t come from radical products

-Seek JV to share financial burden/risk

-Partnered with a company to produce a complementary product to their’s
+i.e. Nintendo