Strategic innovation
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Strategic innovation



How Apple became what it is today and how to innovate strategically...

How Apple became what it is today and how to innovate strategically...



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Strategic innovation Strategic innovation Presentation Transcript

  • Strategic Innovation Page 1
  • Google vs. Apple Apple Google• Launch iPhone • Android operating system• Improvement• Improvement • Improvement• Improvement • Launch Nexus One• Launch iPad • Pull back Nexus One Page 2
  • Innovation and Organic Growth• Emphasis on: – Top-line revenue – Customer-centric, customer value – Internal and external social interactions – Cross-functional and cross-experiential teams – Empathetic, high EI people – Experimentation, learning – Entrepreneurial culture, boldness, audacity• Value-creating strategy vs. Value-enhancing strategy Page 3
  • Value-creating vs. Value-enhancing Strategy Profit New Product Competition PlateauProfit Introduction Erodes Profits Product1 Product2 Product3 Product4 time Page 4
  • Apple iPod Page 5
  • Value-creating vs. Value-enhancing Strategy Profit New Product Competition Plateau Profit Erodes Value-creating Innovation Introduction Profits Product1 Product2 Product3 Product4 time Value-enhancing Innovation Profit Product1 Product2 Introduce Windows iPod WiFi Price iPod iPod + iPod compatible Photo iPod Cut Video Nike Shoe BMW iPod iPod iPod + iPod Wireless Mini Timex Watch Adaptor Remote Page 6
  • Alliance Network and Innovation Apple’s iPod Innovation Network10 parts create 85% Samsung (Korea) – Mobile SDRAM memory of the iPod’s cost Toshiba (China) – Hard Drive Toshiba-Matsushita (Japan)- Display Module Nike Disney Timex Broadcom (Singapore)- Multimedia Processor PortalPlayer (US) Apple Portal Player CPU iPod Inventec (Taiwan)- Assembly, Testing Renesas (Japan) Display Driver Digital GM Ford Delta Unknown Music Airlines Battery Pack Group Unknown Mainboard PCB Unknown Back Enclosure Source: Portelligent, Inc. and400 additional inputs with values from $2 to Linden, Kraemer & Dedrick, 2007.fractions of a penny, with an average value of $.05 Page 7
  • Alliance Network and Innovation Apple Computuer High Level of VC + VEApple – alliance network in 1995 Apple – alliance network from 1995-1997 Page 8
  • Unique Perspective Page 9
  • How do you define the coffee industry? Leisure, Coffee Enjoyment, Social Interaction • Packaged • Convenience coffee • Café/restaurant drinking Caffeine Source Food & Beverage Fashion Item Page 10
  • How does Starbuck’s define coffee industry? Page 11
  • Red vs. Blue Oceans Red Ocean Strategy Blue Ocean StrategyCompete in existing market space Create uncontested market spaceBeat the competition Make the competition irrelevantExploit existing demand Create and capture new demandAlign organization towards strategic Align organization towards pursuit ofchoice between low cost or low cost and differentiationdifferentiation Page 12
  • Coffee’s Next Blue Ocean? ? Strategic Dimension 2 Strategic Dimension 1
  • Early U.S. Auto Industry Page 14
  • Blue Oceans and The Auto Industry Company / Product New/Incumbent Industry Char.Ford Model-T New Entrant UnattractiveToyota Corolla Incumbent UnattractiveChrysler Minivan Incumbent UnattractiveToyota Prius Hybrid Incumbent Unattractive Page 15
  • Strategic Map: PC Industry (Pre-MacIntosh) Fast/High Capacity IBM Apple II Wang Slow/Low Capacity Low Price High Price
  • Strategic Map: PC Industry (Post-McIntosh; Pre-Dell)User Friendliness• GUI Apple• Drop & Drag MacIntosh• Mouse• WYSIWYG Wang IBM DOS-based Operating System >copy *.doc A: Low Margin High Margin
  • Strategic Map: PC Industry (After Dell Enters) DellHigh Quality &Dependability Apple H-P Lenovo Low Price Adequate Quality High Price “Regular” Supply “Efficient” Supply Chain Management Chain Management
  • Tablet PC IBM Wearable PCIBM Mainframe Compaq Laptop Apple II Apple iPad IBM PC Apple MacIntosh Compaq Portable Page 19
  • Personal Computers …what’s the next big thing? Strategic Dimension 2 ? Strategic Dimension 1
  • What’s the next big thing? Strategic Dimension 2 ? Strategic Dimension 1
  • Umbrellas…innovation? Strategic Dimension 2 ? Strategic Dimension 1
  • LG Internet Refrigerator Page 23
  • Airbus A380 Page 24
  • Segway Personal Transporter Page 25
  • Tooth Tunes Page 26
  • Converging Industry Advantage Entertainment Music, Movies, News, Sports Palmtop WirelessComputing Telephony Books GPS Page 27