study guide 1 Flashcards
paradigm
a common cohesive understanding of how a certain phenomenon must be interpreted and explained
Paradigm shift
in a paradigm shift, the dominant paradigm loses its momentum or relevance and is challenged by other paradigms with alternative propositions or narrative
Innovation is driven by what we call breakthrough INVENTIONS
these inventions have altered our way of thinking and acting. A few examples of such functions are printing press, stock exchange or assembly lines
Invention
the discovery and creation of new ideas/products
Innovation
the commercialization of an invention. It is the transformation of an existing state of things, in order to introduce something new. Innovation could potentially lead to the creation of new industries.
The development path of technologies takes several steps before completion. These steps are highlighted below
1) basic knowledge
2) invention
3) innovation
4) Diffusion
5) adoption or imitation
The process of innovation
1) identify a need or problem
2) develop a feasible solution
3) Proceed/manufacture and market the solution
4) achieve adotpino/diffusion of the innovation
Economic innovation
the process of change that introduces econmomic and regulatory elements concerning the needs of people in a society, how they are met, how the goods and services are produced
Four stages of industry development
introduction: early adopters will pay a premium for the product at hand. There are only a few innovators in the market who are differentiated
Growth stage: in this stage the majority of buyers allow for rapid growth
Maturity: in this stage there is a late majority of buyers. Growth is typically limited compared to its previous stage. The driving factor in this industry generally is cost leadership
Decline: the buyers in this stage are laggards. The market size shrinks in the decline phase. Firmscan implement one of four distinct strategic options
Exit - get out of the industry
Harvest - stayin the industry with limited investments
Maintain - stay in the industry and remain in your marketing position and activities
Consolidate - buy over your rivals and reach a near monopoly environment
Product innovation
the creation and subsequent introduction of a good or service that is either new, or an improved version of previous goods or services
process innovation
the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software
Organizational innovation
refers to new forms of organization of business operations
Marketing innovation
involves design/packaging of the product, mode of promotion and placement on the market, as well as methods for determining the selling prices of goods and services
Business-model innovation
the discovery of a fundamentally different business model in an existing business
Innovations can be
competence enhancing: (Incremental innovation) - knowledge for a new product builds on current knowledge
Competence-destroying (radical innovation) - knowledge for a new product different from the current knowledge (e.g. chatGPT)
Abernathy clark model
focuses on explaining when incumbent firms may outperform new entrants
It takes a product market perspective and distinguishes between technical and market knowledge
Henderson clark model
Digs deeper and unpacks innovative elements of products
Specifically emphasizes on componenets of a product and the linkages between them
shock trigger innovations
are those where change happens when people or organizations reach a threshold of opportunity or dissatisfaction
a strong innovation strategy leads to
superior quality, efficiency, and more innovation in comparison to other firms within an industry. This ultimately provides for low costs and differentiation in a firms products and/or services
