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Product Innovation > Product Innovation > Flashcards

Product Innovation Flashcards

1
Q

What kinds of intellectual property rights (IPR) are there?

A
  • Copyright (works of authorship)
  • Trademark (word, phrase, symbol)
  • Patents
  • Trade secret
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2
Q

What are the benefits with intellectual property rights (IPR)?

A
  • Gives you a legal right to stop others from using your IP
  • It gives you a competitive advantage
  • Trade/license who gets to do it (decide who)
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3
Q

What are the criteria for patenting?

A
  • Novelty
  • Cannot be easily done
  • Must be applicable to the real world
  • Must be a patentable matter
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4
Q

How is value created through patents?

A
  • It creates a legal monopoly
  • Trading goods between companies
  • To show you’re serious to investors/when proposing your concept to other companies
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5
Q

What is a dominant design?

A

A dominant design can emerge after a disruption in the market, and this then becomes the standard product. It is a single product or process architecture that dominates a product category, usually 50% or more of the market. The first design is rarely the dominated one.

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6
Q

Factors that influence the adoption of dominant design

A
  • Regulations
  • Increasing return on adoption
  • Learning effects
  • Network externalities (more installed bases –> more complimentary goods –> increased value of installed base)
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7
Q

How can you survive with another firm having a dominant design?

A

By targeting a niche segment

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8
Q

Explain incremental and radical innovation

A

Incremental: Making minor changes or adjustments. A small change in terms of novelty and differentiation.

Radical: New and different from previous solutions, a big change.

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9
Q

Explain disruptive innovation

A

Innovations or technologies that creates a new market, and eventually disrupting the existing market and displacing established market leading firms, products and alliances. Initially their performance is worse than the existing, dominant technology.

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10
Q

Explain steady-state and discontinuous innovation

A
  • Steady-state innovation is all about “doing what we do, but better”. A mind set of constant (incremental-y) innovation
  • A discontinuous innovation breaks the steady-state of innovation, and arises from shifts in technology, market, politics or other factors and requires new or at least significantly adapted approaches to their effective management
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11
Q

Explain competence-enhancing/destroying innovation

A
  • An innovation is competence-enhancing if it enhances or builds on the competencies of the company
  • An innovation that does not build, but rather destroys, the competencies of a company are called competence-destroying. Such innovations could be the introduction of transistors vs. vacuum tubes or the digital calculators vs. mechanical calculators
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12
Q

Explain architectural and modular innovation

A
  • Architectural innovation is an innovation that changes the overall design of a system or the way its components interact with each other – that the architecture is changed
  • Modular innovation is innovation to one or more components of the system. This innovation does not significantly change/alter the overall architecture of the system
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13
Q

What is frugal innovation?

A

The process of reducing the complexity and cost of a good and its production by removing non-essential features which will make it cheaper

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14
Q

What is “knowledge and technological spillover”?

A

The exchange of ideas between two or more parts. Good ideas or technology from one company or area spill over into other companies/areas.

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15
Q

Different types of patterns of innovation

A
  • Technological trajectories: the path a technology takes through its lifetime, referring to a change of interest
  • Technology S-curves: plots performance to effort. As the older technology begins to flatten out, the newer generation begins to accelerate.
  • Adoption of technology: number of adopters plotted against time. When a technology is introduced, few understand it and adopt it, but after a time more people adopt it. Once the market has been saturated the curve flattens out again
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16
Q

What is the “sailing effect” in regards of the S-curve?

A

When the introduction of a new technology pushes the performance of the old technology above its limit of technology.

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17
Q

What are the five categories of adopters (connected to the innovation adoption curve)?

A
  • Innovators
  • Early adopters (Well adopted into the social system and have the greatest potential for opinion leadership)
  • Early majority (The early majority adopts a new innovation slightly before the average member of a social system)
  • Late majority (Reluctant and approach innovation with a higher degree of scepticism and may not adopt the new technology until they feel pressured by their peers and/ or when most of the uncertainty about the innovation has been ironed out)
  • Laggards (highly sceptical of innovations and innovators, and must feel certain that a new innovation will not fail before adopting it)
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18
Q

Which is the most crucial step in the Bell curve of adoption?

A

Going from early adopters to early majority to reach mainstream success. If the early majority does not adopt the innovation, neither will the late majority or the laggards

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19
Q

Name some factors influencing diffusion/adoption of innovations (could help to get from early adopters to early majority, breaking the chasm)

A
  • First customer
  • Relative advantage (is it perceived to be better?)
  • Compatibility
  • Complexity
  • Trialbility (testing the product before paying a lot)
  • Observability
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20
Q

What is a strategic fit?

A

When the external and internal factors match perfectly

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21
Q

What are the two sides of strategic management?

A
  • The positioning school (external analysis, Porter’s 5 forces)
  • The resource based view (internal analysis)
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22
Q

What are the two main factors of an innovative strategy?

A
  • The innovation strategy should be aligned with the overall corporate and business strategies. It should build upon the strategy but also challenge it
  • It should also determine where and when innovation is required to meet the aims of the organisation and lays out, in broad terms, what is to be done about it.
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23
Q

What are the four main parts of innovation strategy (aka decision areas)?

A
  • Ideas
  • People and the organization
  • Prioritization
  • Implementation
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24
Q

What are the four principles of the blue ocean strategy?

A
  • How to create uncontested market space by reconstructing market boundaries
  • Focusing on the big picture
  • Reaching beyond existing demand and supply in new market spaces
  • Getting the strategic sequence right
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25
Q

What is value innovation?

A

The simultaneous pursuit of differentiation and low cost, creating value for both the buyer, the company and its employees, thereby opening up new and uncontested market space. The goal of value innovation is not to compete, but to make competition irrelevant by changing the playing field of strategy

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26
Q

What is ERIC?

A

Eliminate-Reduce-Increase-Create. It helps people in charge to understand which features are desired and which can be cut and so forth.

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27
Q

What are the issues with the blue ocean strategy?

A

Just describing how success can be accomplished, without knowing how many have tried and how many that have failed in doing so. The strategy is too much of a perfect concept to be trusted fully. It is not dynamic enough.

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28
Q

What are five points that should be in a business model?

A
  • What do you offer?
  • To whom?
  • How do you provide it?
  • What value is created for the customer?
  • Revenue model
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29
Q

What is Porter’s Generic Strategy?

A

It describes how a company can pursue competitive advantage across its chosen market scope. We need to adapt our offering to what we want to offer and to whom we offer it, and also consider that value is subjective.

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30
Q

Explain spoken and unspoken needs

A
  • Spoken needs are concrete and specific with a clear perception of satisfaction. Often strong demands.
  • Unspoken and under-developed needs are not obvious to the customer self. Often related to problems, discontent or even pains. To find these, one should look at what pains the customer
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31
Q

What are the benefits with (customer) value based thinking?

A
  • Better products for the customer
  • Decreases cost
  • Need seekers can easier predict the future needs
  • Better at aligning innovation with strategy
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32
Q

Define customer value

A

Satisfaction of customer needs divided by Use of customer resources. Meaning that if the benefits of a product exceed the effort/time/money spent on the product, it adds value.

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33
Q

What are the aims of (company) value based thinking?

A
  • Increasing the benefits gained

- Reducing total expenditure

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34
Q

What are the five factors (buckets) in the generic value-based thinking business model?

A
  • Customers (define)
  • Needs (capture)
  • Functions (determine)
  • Solutions (create)
  • Processes (design)
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35
Q

Three variable groups within market segmentation

A
  • Customer characteristics
  • Behavioural measures (how the customer will buy the product)
  • Benefits sought (why the customer will buy the product)
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36
Q

Creating a market segment can be difficult. What is one why to go around it to better understand the customer?

A

By creating a persona

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37
Q

What are the three different types of pricing?

A
  • Cost-based: Price is determined by the cost of the product. Can be bad because then you have to convinve the customer of its worth, due to it being so cheap
  • Competition-based: Price is determined/limited by the way competition price their product
  • Value-based: Determined by the value the customers perceive in the product
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38
Q

List the four main types of functions

A
  • Main function
  • Additional function (functions that contribute to added value, if they are valued higher than their costs by the customer)
  • Support function (that must be present to compensate for any shortcomings in the chosen technology)
  • Undesired function
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39
Q

What are some benefits from working methodologically with functions?

A
  • Clear connection between business idea and products offered
  • Strategies for increasing customer value within the entire commercial process
  • A clear thread binding the entire development process together, all the way to marketing (focusing on functions rather than solutions gives a clearer and more consistent image)
  • Long-range, stable and measurable definition of customer benefits which simplifies long-term plans, product planning and benchmarking
  • A natural starting point
40
Q

What are deframing skills?

A

The ability to question current strategic beliefs

41
Q

How are larger companies reacting to disruptive technology?

A

They are rarely the first ones to come with a disruptive technology. They focus too much on their current customers and their needs, instead of trying to reach out to other segments. After a disruptive technology has been developed enough to not cost as much and be a safe option, as well as the customer demand has been showed for the technology, then the large companies can hop on the bandwagon.

42
Q

What are some factors to why companies are bad in adapting to new technology?

A
  • Resource dependent (If the environment changes, they may be less fit to survive, since their resources are too specialized to function properly in a different setting)
  • The disruptive ideas are often false negatives, firms are going for safer options (stopped even though they shouldn’t have been)
  • Traditional rules challenged –> issue for management
  • Their processes aren’t made for other technology
43
Q

When addressing sustaining or disruptive innovations, the organization needs to develop new processes and values, which also entails creating organisational space where these capabilities can be developed. What are the three ways in which this can be done?

A
  • Create new organizational structures within corporate boundaries in which new processes can be managed
  • Form an independent organization from the existing organization and develop new capabilities within it, capabilities that are required to solve the new problem
    (creating a spinout organisation)
  • Acquire a different organization whose processes and values closely match the requirements of the new task
44
Q

When is a spin out organization required?

A

To deal with new markets when a disruptive innovation requires a different cost structure to be profitable and competitive, or when the current size of the opportunity is insignificant relative to the growth needs of the mainstream organization

45
Q

Name some critical tasks when introducing disruptive innovations

A
  • Mapping and redesigning the value network (capture who’s involved, analyze change in actors’ value and exclude/include actors)
  • Align incentives (modify revenue model, address changing competence needs by providing training for other actors)
46
Q

How do you avoid value lock-ins?

A
  • Be open to reconsider the value proposition. The value proposed might be a different thing than what you usually offer.
  • Experiment with new applications and new customers.
  • Adapt the business model to fit with the new potential values provided by the technology.!
  • Listen to both R&D, manufacturing and marketing & sales. All may have some crucial input.
  • Use structured creativity tools to capture emerging trends and challenge ingrained thinking.
  • Search for innovation ideas in new places
47
Q

How do you find disruptive innovations?

A
  • Analyse margins and price levels
  • Read product reviews
  • Use lead customers (those who like trying new things)
  • Use problem customers (those who are using it wrong)
  • Observe instead of asking
  • Consider niches
48
Q

Explain passive and active idea search

A
  • Passive: Everybody gets to submit ideas, feedback loop is long, idea bank is full.
  • Active: A certain time is set aside for brainstorming ideas and having idea jams where you could try to solve something
49
Q

What are the advantages/disadvantages with different idea search behaviours (external or internal ideas)?

A
  • Ideas from the outside are often more novel, but usually less aligned with the company strategy
  • There are IP issues with open innovation, because who really owns what’s generated?
  • When searching for ideas we also want an optimal cognitive distance between those generating the ideas. If people cooperating are too close, too homogenous, then there will be few or no novel ideas. If they are too far apart, too heterogeneous, they have no common ground to connect with each other.
  • Engineers should look more for ideas amongst their customers, but this is difficult
50
Q

What are the three key objectives of NPD (new product development)?

A
  • Maximizing fit with customer requirements
  • Minimizing cycle time (by doing things parallel, but also dangerous to “put all eggs in one basket”)
  • Controlling development costs (stage gate methods)
51
Q

Name some factors that are important in NPD

A
  • Size of teams
  • Composition (diversity of team members is sought, cross-functional teams enable design, manufacturing and market objectives to be integrated in the NPD process –> different sources of extra-team resources)
  • Structure (functional/lightweight/heavyweight/autonomous teams)
  • Administration (extra important in virtual teams where members aren’t in the same location, challenges in participation, cooperation and trust)
  • Leadership (leader attributes such as seniority, authority and multilingual skills must match the team type for teams to be effective)
52
Q

Explain the three types of ambidexterity

A
  • Structural ambidexterity: Different parts of a company focus on efficiency and innovation, respectively. Problem with this is to integrate the innovation parts into the rest of the company
  • Temporal ambidexterity: Switch between periods with a focus on innovation and periods with a focus on efficiency. This sometimes coincides with leadership and/ or organisational change, that a new boss sees innovation or efficiency as the right way forward, for example. Problems with this is that the ideas might never mature because it switches too quickly
  • Contextual ambidexterity: All relevant parts of a company aim for both innovation and efficiency. This is usually achieved by creating slack, dedicated time for innovation, at an individual level. Dedicated time to innovate. Strive for synergies between long- and short-term activities. This is the most promising one
53
Q

What is one way of resolving the conflict between efficiency and innovation?

A

With an ambidextrous organisation. For an organisation to be ambidextrous, they should separate their new exploratory units from their traditional, exploitative ones, allowing for different processes, structures and cultures at the same time, while maintaining tight links across all units at the senior executive level

54
Q

What issues must be solved for ambidexterity to work?

A
  • New business initiatives must be protected from the “noise” of daily operations
  • New ideas may surface, but rarely grow and prosper (due to organizational politics, managers being afraid to take on a project that might eat and take another project’s resources, and not “worth” focusing on due to small volumes.)
  • Synergies between old and new businesses are not realized (bad communication and poor knowledge transfer cause unawareness of demands, supply and manufacturing –> fail to connect old to new. Often that you “re-invent the wheel”)
55
Q

What is open innovation?

A

It is both inside-out and outside-in. Could be when we license something or give something away to someone else to work on. People outside of the company can be involved in the innovation process by generating ideas. It opens up innovation and product development processes to external sources. Although, R&D is still needed to further develop the ideas. It includes exposing ourselves and opening up technology.

56
Q

When to use open innovation?

A

Use the innovation ambition matrix for help when to use open innovation. For projects in the outer adjacent zone and the wholly new zone, open innovation can be a good idea. Open innovation in the core, however, is just stupid. There is no need to be super innovative there, only efficient, and it is in the core the firm is the most efficient

57
Q

What is an asymmetric collaboration?

A

When a big company and a small start up help each other, reaching the core or the new innovative things

58
Q

What can big companies provide for small companies/start ups?

A
  • Credibility
  • Branding and PR
  • Distribution and market access
  • Supplier network
  • Funding
59
Q

What can small companies/start ups provide for big companies?

A
  • Speed of innovation
  • Innovation image
  • Innovation
  • Culture (of innovation/new thinking)
60
Q

What are the four different ways of asymmetric collaboration?

A
  • Inside-in: The DIY model (a unit created within the mother organization, with extra contact with new influences)
  • Inside-out: The boomerang model (a group of the own staff is co-located with a group of start ups and intrapreneurs outside the mother organization. Group uses systems and processes of their new partners until they are back to the mother company)
  • Outside-in: The sherpa model (people who are brought in from the outside, who are well versed in environments characterized by uncertainty and risk)
  • Outside-out: The emigrant model (ventures that the mother company initiate, knowing that they will never be able to incorporate that business in the mother company)
61
Q

What are advantages and disadvantages with collaborating vs working solo?

A

Collaboration can often enable firms to achieve more at a faster rate with lower risk or costs than what they could on their own. Via collaboration, complimentary skills and resources can be combined, knowledge can be transferred and shared standards can be created.

If the resources and capabilities already exist within the firm, collaboration can be avoided because if you can do it yourself. If you’re worried about the protection of technology and controlling the development process you also shouldn’t collaborate with other firms, since this means having to give up some degree of control and protection.

62
Q

What are some types of collaborative arrangements?

A
  • Strategic alliances
  • Joint ventures
  • Licensing
  • Outsourcing
  • Collective research organization
63
Q

Users are more likely to innovate if the knowledge is “sticky” (if it is difficult and costly to transfer the knowledge). What does the stickiness of information depend on?

A
  • The tacitness of the knowledge that must be transferred
  • The amount of information that must be transferred
  • The absorptive capacity of the transferring parties
64
Q

Which user are we interested in when we talk about user innovation? And what are the three different types of that user?

A

Lead users, because they encounter things they want to fix and know how to make the demand explicit, in comparison to the average user.

  • Lead users in the target application (those that they are explicitly targeting)
  • Lead users in similar markets (those in markets similar to their target)
  • Lead users with respect to the attributes of the problem faced (could be people completely outside their target, but who have similar/same needs)
65
Q

Explain the process of lead user method

A
  1. Start of the lead user process (define target market, build team etc)
  2. Identification of needs and trends (research)
  3. Identification of lead users (screening of first ideas and solutions generated by lead user)
  4. Concept design (workshop with lead user to generate/improve product concepts)
66
Q

What are some issues with user communities?

A
  • Established producers might lose control of the innovation process if they let them into it
  • Difficult to control them and align their innovation with company strategy
  • IP issues (who’s the owner?)
  • Competitors might arise from the user community
67
Q

How can involving users threaten innovative performance?

A
  • By involving the wrong users (it being worthless)
  • Over-searching and over-valuing external information (important to still depend on the competencies within the company)
  • Risk of opportunistic behaviour and knowledge leakage
  • Focusing too much on the needs of existing customers (could result in missing out on disruptive innovations)
68
Q

What are innovation tool kits?

A

They invite users to create their own solutions and effectively shift the focus of problem solving from the producing firm to the user. Characterized by:

  • Learning by trial and error (development of toolkit)
  • An appropriate solution space
  • User-friendly (everybody is supposed to be able to use it)
  • Commonly used modules (don’t customize everything)
  • Results easily created by user
69
Q

Mass customization is driven by four main structural changes in today’s economy, which?

A
  1. Heterogeneous demand (diverse)
  2. Shorter product life cycles
  3. Mature markets (more possibilities to diverge and customize once the technology they are based on have become cheap and well understood)
  4. More conscious consumers
70
Q

What are the three main challenges of mass customization?

A
  • Higher costs compared to mass-produced products
  • Inability to deliver goods to the customer at the time of purchase (customization takes time)
  • Time needed by the customer to design the desired product
71
Q

What is mass user collaborations and which three main conditions does it depend on?

A

It is a form of collective action in which a large number of people independently work on a single project, which is often modular in nature. The conditions are:

  • Low participation cost for users
  • Modular tasks
  • Low cost of assembling the pieces into an end product
72
Q

What are Nonaka’s five principles for knowledge creation?

A
  1. Creative chaos
  2. Autonomy (use self-organizing teams)
  3. Variety (of people)
  4. Redundancy (reduced division of labor)
  5. Common vision (use metaphors, models)

According to Nonaka, knowledge in the organization follows a cycle in which implicit (tacit) knowledge is ‘extracted’ to become explicit knowledge, and explicit knowledge is then ‘re-internalised’ into implicit knowledge.

73
Q

How can performance be described?

A

Performance = Differentiation + Integration

74
Q

What is optimal cognitive distance?

A

The cognitive distance is how different the cognition, the knowledge, of individuals are. It cannot be too great, because then there will be difficulties in understanding and communication, but neither can it be too small (because then no novel ideas will be generated). Therefore some form of optimal distance, a knowledge overlap, is needed. We need different cognitive distances and redundancy for different types of innovation.

75
Q

Which are the two trends in ideation today?

A
  • Proactive ideation (promoting different type of ideas and from a broader scope of sources, methods, tools, IT-systems and roles for ideation)
  • Collective ideation (collaboration)
76
Q

What are the most critical components of collective ideation?

A
  • Prioritizing (might not be prioritized bc people think it’s not necessary, can’t be measured, rather work on things they can get credit from)
  • Search behaviour (without direction, odd ideas being outsorted early, not aligning with company strategy, not focusing –> ending up with a large collection of (useless) ideas)
  • Control (limited ability for management to control)
77
Q

What are some important factors for a positive innovation climate?

A
  • Motivation
  • Challenge
  • Support
  • Heterogeneity
78
Q

What is the front end of innovation?

A

Front end is generating many ideas, then they go through a funnel and you come out with just a few.

It is where opportunities are identified and concepts are developed before entering the formal product development process. Ideas usually go from informal or vague to more formally defined projects in the front end. Front end activities largely influence the outcomes of NPD processes, because it is in the front end that firms create new ideas, give them direction and set them in motion. Front end process ends in a go/ no go decision whether or not to continue into formal NPD or not

79
Q

What are the core activities of the front end of innovation?

A
  • Idea/concept development
  • Idea/concept alignment
  • Idea/concept legitimization
80
Q

How are you supposed to balance ambition and returns on investments?

A

Core: 70% ambition 10% returns
Adjacent: 20% ambition 20% returns
Transformational: 10% ambition 70% returns

81
Q

What factors are affecting the ratios of ambition and returns on investments?

A
  • Industry (which one you’re in, e.g. tech industry spend less time and money on core and instead focus on new releases)
  • Position within industry (if you’re weak you may try more risky projects)
  • Stage of development (in the beginning, companies might not have a core and it will take time to mature. When the core is mature, then you want to protect it)
82
Q

Four factors that identify idea jams

A
  • IT-based creative setting
  • Participants are encouraged to come with ideas and comments
  • Set time
  • Set focus
83
Q

What is the 4P framework for innovation?

A
  • Paradigm
  • Product
  • Position
  • Process

What is the overall business strategy and how will innovation help us get there? The tool enables you to discover what the innovation process can improve and bring to your business. Shows if you’re working incrementally or radically.

84
Q

What are the three different innovation strategies?

A
  • Technology driver
  • Need seeker
  • Market reader
85
Q

How are queues related to innovation?

A
  • Queues are often a main source of waste in innovation
  • Higher capacity utilization increases queues exponentially
  • Variation increases queues linearily
  • Control the size of the innovation queue by lowering resource utilization to the economically correct level
86
Q

What is a disruptive innovation?

A

“An innovation in the (product or process) technology, or in the business model. The disruptive innovation increases customer perceived value in at least one of the following two ways:

  1. By introducing a new performance dimension to the product/service and therefore creating a new market.
  2. By providing a less expensive solution – often in trade-off for reduced performance – targeting customers who do not value the extra features/high performance of the existing product/service, or simply cannot afford it.
87
Q

X- and y-axis of the innovation ambition matrix

A

x-axis: how to win

y-axis: where to play

88
Q

What are network externalities?

A

The value of a good to a user increases with the number of other users of the same or similar good. This is done through:

  • Installed base (e.g. phone)
  • Complementary goods (e.g. apps)
89
Q

What are the challenges with disruptive and radical innovations, respectively?

A
  • With radical innovations, the challenge is for the engineers to solve the problem
  • With disruptive innovations, the challenge is to understand the customers and their value
90
Q

What are the benefits and drawbacks of diffusing a technology?

A

Benefit: By opening a technology up and diffusing it, we allow others to create complements to it, which gives us more network externalitites.

Drawback: By opening up a technology to others, we allow competitors.

91
Q

What are the benefits and drawbacks of protecting a technology?

A

Benefit: Keep IP –> market monopoly

Drawback: If we would allow others to compete, value increases because customers find it more attractive when many companies do the same thing, it legitimizes it

92
Q

How is the innovation ambition matrix useful to companies?

A

It allows companies to see what kind of innovations their portfolios consist of. They could allocate money and resources according to the matrix (70-20-10). This helps to balance the resources.

93
Q

What are the key issues in prototyping?

A
  • Focus (choose one idea and go for it)
  • Flexibility
  • Falsification (check if assumptions hold or not)
94
Q

What is the innovation radar?

A

It shows 12 ways how to innovate. It’s about what, where, how, and who. If it is marked close to the center = very low innovation activity in the particular dimension.

Use the innovation radar to rate the innovative performance in comparison to the best performing competitor/type.

95
Q

What are the ten dimensions of innovation?

A
  1. Finance (Business model, Networking)
  2. Process (Enabling process, Core process)
  3. Offering (Product performance, Product system, Service)
  4. Delivery (Channel, Brand, Customer experience)

Product Innovation (1 decks)

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