Module 2 - Innovation Flashcards
Definition of innovation
The introduction of new ideas, methods or products
What are potential sources of new ideas?
Consumers
Existing companies / market
Distribution channels
What are some methods of generating ideas?
Brainstorming
Focus groups
Problem inventory analysis
Desk research
What is problem inventory analysis?
May also be conducted via a focus group
Individuals are given a list of problems in relation to a product / service and asked to discuss how they would overcome those problems
Second definition of innovation
The process of taking an idea and translating it into a good / service that a customer will pay for
What are some approaches to innovation
Identifying or creating new opportunities
New ways of serving existing markets
Growing new markets
Rethinking services
Meeting social needs
Improving operations
Different ways a business can innovate? (How can a business innovate) (E.g. novelty factor product)
Novelty factor - product
Novelty factor - process
Complexity
Timing
Legal protection of intellectual property
Changing the rules
Offering an existing product / service to a new market
What is the strategic advantage of a “novelty factor - product” innovation?
Offering a product no one else can puts you above competitors
What is the strategic advantage of the “Novelty Factor - Process” innovation
Offering a product which is produced in such a way that competitors cannot match it gives a strategic advantage - Zara with a more reactive supply chain than competitors
What is the strategic advantage of the “complexity” innovation?
Offering a product which cannot be easily copied gives a strategic advantage
What is the strategic advantage of the “timing” innovation?
Being first into the market allows a significant gain of market share
Being first isn’t always best - businesses can sometimes encounter more problems
What are the dimensions of innovation? (4 P’s) (ways a business can innovate)
The 4 Ps
Product
Process
Position
Paradigm
Definition of Product in the Dimensions of Innovation
Changes to the products / services themselves that a business offers
Definition of Process in the Dimensions of Innovation
Changes to the way that the products / services are created and delivered
Definition of Position in the Dimensions of Innovation
Changes to the market which the products / services are introduced to
Definition of Paradigm in the Dimensions of Innovation
Changes to the fundamentals of how and why a business operates in a certain way (it’s underlying business model)
Is the paradigm form of innovation the most extreme?
Yes
What is incremental innovation
Where innovation is conducted one step at a time
E.g. start with normal Audi, next year add a new sound system, next year add better gadgets etc
What is radical innovation?
It involves completely re-thinking an existing product or service or a complete change to an existing market
How can innovation come about in relation to the markets needs?
Knowledge Push - breakthrough of new product and then drive the launch of it
Need Pull - where the market demand for a solution to a problem (or need) triggers R&D
What are some other types of innovation? (E.g innovation due to regulation)
Innovation due to regulation
Recombinant innovation
Copycat innovation
Crisis-driven innovation
Mass customisation
User-led innovation
What is innovation due to regulation
E.g. sugar tax - changing recipes
What is recombinant innovation?
Introducing ideas that are successful in other markets into your own market - e.g. assembly lines to car manufacturers
What is copycat innovation?
Observing others and copying them - Southwest Airlines reduced turnaround times mimicking formula 1
