Disruptive Innovation - OpenThinking
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Disruptive Innovation - OpenThinking

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  • What is the strategy and process
  • Note to InstructorIf you are running a marketing plan project in your class, this is a good time to ask why their project ideas might fail in the real market. You can then ask what they plan to do to prevent failure.
  • It is not difficult to find examples of companies that are running contests where they ask consumers to send in ideas for new products. Dorito’s recently asked consumers to come up with a new flavor and new advertising. The Classic Mini Cooper brand was running Mini Mania’s the “Awesome New Product” Idea Contest. The grand prize winner received a 25 percent off promo code! Two second place winners will receive 15 percent off promo codes.
  • Concept testing refers to testing new-product concepts with groups of target consumers
  • Marketing strategy development refers to the initial marketing strategy for introducing the product to the market
  • Note to InstructorStandard test markets are small representative markets where the firm conducts a full marketing campaign and uses store audits, consumer and distributor surveys, and other measures to gauge product performance. Results are used to forecast national sales and profits, discover product problems, and fine-tune the marketing program.Controlled test markets are panels of stores that have agreed to carry new products for a fee. In general they are less expensive than standard test market, faster than standard test markets, but competitors gain access to the new product. Simulated test markets are events where the firm will create a shopping environment and note how many consumers buy the new product and competing products. Provides measure of trial and the effectiveness of promotion. Researchers can interview consumers.
  • Note to InstructorDiscussion QuestionName a product at each stage of the PLC.This concept is very new to students. See if they can identify products or product categories that are in each stage of the model. Introduction might include online movie viewing software, growth might include MP3 players, maturity might include bottled water, and decline could include soda (actually in a decline) or videotape players.
  • Note to InstructorStyle is a basic and distinctive mode of expression.Fashion is a currently accepted popular style in a given field.
  • Concept testing refers to testing new-product concepts with groups of target consumers
  • The model helps customers perform a specific “job” that alternative offerings don’t address.Example:MinuteClinics enable people to visit a doctor’s office without appointments by making nurse practitioners available to treat minor health issues.
  • The model generates value for your company through factors such as revenue model, cost structure, margins, and inventory turnover.Example:The Tata Group’s inexpensive car, the Nano, is profitable because the company has reduced many cost structure elements,•accepted lower-than-standard gross mar- gins, and sold the Nano in large volumes to its target market: first-time car buyers in emerging markets.
  • Your company has the people, technology, products, facilities, equipment, and brand required to deliver the value proposition to your targeted customers. And it has processes (training, manufacturing, service) to lever- age those resources.Example:For Tata Motors to fulfill the requirements of the Nano’s profit formula, it had to recon- ceive how a car is designed, manufactured, and distributed. It redefined its supplier strategy, choosing to outsource a remark- able 85% of the Nano’s components and to use nearly 60% fewer vendors than normal to reduce transaction costs.
  • Your company has the people, technology, products, facilities, equipment, and brand required to deliver the value proposition to your targeted customers. And it has processes (training, manufacturing, service) to lever- age those resources.Example:For Tata Motors to fulfill the requirements of the Nano’s profit formula, it had to recon- ceive how a car is designed, manufactured, and distributed. It redefined its supplier strategy, choosing to outsource a remark- able 85% of the Nano’s components and to use nearly 60% fewer vendors than normal to reduce transaction costs.

Disruptive Innovation - OpenThinking  Disruptive Innovation - OpenThinking Presentation Transcript

  • Disruptive InnovationOvercoming the market with morethan just lower pricingIyad Mourtada
  • New-Product Development
  • Reasons for new product failure Overestimation of market size Poor design Incorrect positioning Wrong timing Priced too high Ineffective promotion Management influence High development costs Competition
  • New-Development Process
  • Idea Generation The systematic search for new-product ideasSources of new-product ideas Internal External
  • Idea ScreeningIdentify good ideas and drop poor ideasR-W-W Screening Framework: Is it real? Can we win? Is it worth doing?
  • Concept Development and Testing • Product ideais an idea for a possible product that the company can see itself offering to the market • Product conceptis a detailed version of the idea stated in meaningful consumer terms • Product imageis the way consumers perceive an actual or potential product
  • Marketing Strategy Development Marketing strategy statement includes: Description of the target market Value proposition Sales and profit goals Business analysis involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives
  • Types of Test Markets Standard test markets Controlled test markets Simulated test markets
  • Product Life-Cycle Strategies
  • Product Life-Cycle StrategiesFads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
  • Product Life-Cycle Strategies
  • How can great Firms Fail?The Reason for Failure: The Reason for Success:• Listen to their customers • Listen to their customers• Invest in Technology • Invest in Technology• Satisfy their customers • Satisfy their customers next-generation needs. next-generation needs. Innovators Dilemma
  • Disruptive Innovation
  • Reinventing Your Business Model
  • Reinventing Your Business Model1. Articulate what makes your existing model successful. For example, what customer problem does it solve? How does it make money for your firm?2. Watch for signals that your model needs changing, such as tough new competitors on the horizon.3. Decide whether reinventing your model is worth the effort. The answer’s yes only if the new model changes the industry or market. Johnson, Christensen, and Kagerma
  • Understand Your Current Business model1. Customer value proposition.
  • Understand Your Current Business model2. Profit formula.Revenue – Cost = Profit XTurnover
  • Understand Your Current Business model3. Key resources and processes.
  • Take a good technology andwrapped it in a great business model
  • Modern Business Approach (MBA 2.0)50 Innovative Ways to grow your business in the Middle EastSaturday, December 22, 2012 – 9:00 AM – 5:30 PMDubai Knowledge Village, Building 19, Office: 208Based on the 4 most innovative business models:Price: AED 2,300 (Early Bird Price: AED 1,590)Email: learn@openthinking.ae Phone: 055 9852570
  • iyad@openthinking.ae