INNOVATING in products, business models, processes, and positioning (part 2)

Transcription

1 INNOVATING in products, business models, processes, and positioning (part 2)

2 The "4 Ps" of Innovation Management Source: J. Tidd & J. Bessant, Managing Innovation, Wiley

3 P - POSITION It is about mental models that consumers use in their purchasing activity This models are very simple since consumers do not look for OPTIMAL solutions but for SATISFYING ones PRICE (PERCEIVED) QUALITY

4 A"more"sophis+cated"mental"map" SPIRITS Appreciating taste/quality others FUNCTIONAL DIMENSION SOCIAL DIMENSION Having fun/ good time me 17"

5 P - PROCESS Finding new ways for reducing production costs (and increase efficiency) or increase effectiveness (ex: reduce lead-time) at acceptable costs It can be extended also to delivering Examples: Toyota and Lean production DHL revolutionary delivering system

6 "While CARGO was loaded into SHIPS its DOCUMENTATION could go by PLANE DOX arrived FIRST CARGO cleared customs FASTER IMPORTING and EXPORTING was FASTER CUSTOMERS got their goods FASTER" Source: DHL corporate website

7 Innovation types Incremental vs. Radical innovation Innovation platforms Component vs. Architecture innovation Discontinuous innovations Disruptive innovation 7

8 Incremental vs. Radical innovation Incremental innovations refer to day-to-day changes (marginal improvements in products or optimizations in production processes). They develop over solid basis (already existing products or processes). Radical innovations represent a radical step change in a product or process. The distinction between incremental and radical do not refer (only) at the technological content of a product/process 8

9 Who decide? There are not objective or standardized measure for determining the degree of novelty of an innovation If related to product and positioning, well novelty is very much in the eye of the beholder. Consumers have different perspectives If related to process and business model, we normally refer to a "radical" innovation as a complete new way to organize the operations and the business as a whole 9

10 About radical innovations Radically new products are more frequent than radical changes in production processes Radical process innovations generally take more time to spread. However they normally have a longer life (than products) because they involve assets and knowledge that will be applied to multiple productions 10

11 Innovation Platform There's PLATFORM and PLATFORM At the FIRM level: The use common components or building blocks to create derivative offerings. At the INDUSTRY level: A foundation technology (or service) used beyond a single firm, whose value increases exponentially with the addition of more users and complementary products & services

12 Innovation platforms: FIRM LEVEL Use common components or building blocks to create derivative offerings. Create the preconditions for derivative offerings that can be developed faster and at minor costs Typical of software houses 12

13 An example Fiat Scudo Peugeot Expert Citroen Jumpy 13

14 Innovation platform: industry level At the INDUSTRY level: A foundation technology (or service) used beyond a single firm, whose value increases exponentially with the addition of more users and complementary products & services

15 Some examples Consider Gore-Tex, a waterproof and breathable fabric developed by W.L. Gore & Associates Inc. More than 89 companies have licensed the core technology and brand to create hundreds of products for a variety of applications, including outerwear, shoes and medical implants (Boudreau and Lakhani, 2009)

16 Platform strategies Jump on the bandwagon strategy. You simply use existing and "winning" platform Embrace-and-extend strategy. Embrace existing winning platforms, as far as they go, but then rapidly extend them with proprietary features. Create new/alternative platforms Avoid platforms (niche market solution)

17 A typology of Industry Platform Integrator Platform Product Platform Two-sided Platform External Innovators Platform Platform Platform External Innovators Customers Customers External Innovators Customers High Control by Platform High Autonomy of External Parties Fonte: Kevin J. Boudreau and Karim R. Lakhani (2009), How to Manage Outside Innovation, Sloan Management Review, Vol. 50, N. 4

18 Discontinuous innovations Innovation (especially technological innovation) tends to develop over time along well defined trajectories Discontinuous innovations represent a rift in such trajectories that change the rules of the game for all the companies and can force incumbents to completely revise their business mode in order to avoid competitive irrelevance Potential sources of discontinuity: New market segments emerge New technologies emerge New political rules emerge/shift in regulatory regimes New consumers behaviors emerge New business models emerge Unthinkable events

19 How di firms react to discontinuous Incumbents innovations Short-term: limit the damage (price tactics, waitand-see behavior) Long-term: shift to the new trajectory (if the winning one) New comers Short-term: gain as much market share as possible Long-term: prepare for tough competition coming from converted firms

20 Component vs. Architecture innovation Architecture: products composed by a multitude of components and sub-components Most common sit.: Innovation processes at lower levels (component and subcomponents) are constrained by innovation processes at the Architecture level Less common sit.: component innovation -> architecture innovation 20

21 FIAT Panda Suppliers (first level) 21

22 Disruptive Innovation Disruptive innovation is a term coined by Clayton Christensen, that describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

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