Strategic Innovation                       Page 1
Google vs. Apple Apple             Google• Launch iPhone                   • Android operating system• Improvement• Improv...
Innovation and Organic Growth• Emphasis on:  –   Top-line revenue  –   Customer-centric, customer value  –   Internal and ...
Value-creating vs. Value-enhancing Strategy                         Profit         New Product               Competition  ...
Apple iPod             Page 5
Value-creating vs. Value-enhancing Strategy                                  Profit                New Product            ...
Alliance Network and Innovation                                         Apple’s iPod Innovation Network10 parts create 85%...
Alliance Network and Innovation                           Apple Computuer                            High Level of VC + VE...
Unique Perspective                     Page 9
How do you define the coffee industry?          Leisure,                           Coffee        Enjoyment,      Social In...
How does Starbuck’s define coffee industry?                                         Page 11
Red vs. Blue Oceans      Red Ocean Strategy                     Blue Ocean StrategyCompete in existing market space       ...
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 ...
Strategic Map: PC Industry                            (Pre-MacIntosh)    Fast/High Capacity                               ...
Strategic Map: PC Industry        (Post-McIntosh; Pre-Dell)User Friendliness•   GUI                                       ...
Strategic Map: PC Industry                      (After Dell Enters)                                                DellHig...
Tablet PC                       IBM Wearable PCIBM Mainframe                                                 Compaq Laptop...
Personal Computers …what’s the next big thing?  Strategic Dimension 2                                                  ?  ...
What’s the next big thing?                             Strategic Dimension 2                                              ...
Umbrellas…innovation?  Strategic Dimension 2                                                  ?                          S...
LG Internet Refrigerator                           Page 23
Airbus A380              Page 24
Segway Personal Transporter                              Page 25
Tooth Tunes              Page 26
Converging Industry Advantage                                      Entertainment                                       Mus...
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Strategic innovation

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

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Strategic innovation

  1. 1. Strategic Innovation Page 1
  2. 2. 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
  3. 3. 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
  4. 4. Value-creating vs. Value-enhancing Strategy Profit New Product Competition PlateauProfit Introduction Erodes Profits Product1 Product2 Product3 Product4 time Page 4
  5. 5. Apple iPod Page 5
  6. 6. 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
  7. 7. 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
  8. 8. Alliance Network and Innovation Apple Computuer High Level of VC + VEApple – alliance network in 1995 Apple – alliance network from 1995-1997 Page 8
  9. 9. Unique Perspective Page 9
  10. 10. 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
  11. 11. How does Starbuck’s define coffee industry? Page 11
  12. 12. 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
  13. 13. Coffee’s Next Blue Ocean? ? Strategic Dimension 2 Strategic Dimension 1
  14. 14. Early U.S. Auto Industry Page 14
  15. 15. 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
  16. 16. Strategic Map: PC Industry (Pre-MacIntosh) Fast/High Capacity IBM Apple II Wang Slow/Low Capacity Low Price High Price
  17. 17. 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
  18. 18. 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
  19. 19. Tablet PC IBM Wearable PCIBM Mainframe Compaq Laptop Apple II Apple iPad IBM PC Apple MacIntosh Compaq Portable Page 19
  20. 20. Personal Computers …what’s the next big thing? Strategic Dimension 2 ? Strategic Dimension 1
  21. 21. What’s the next big thing? Strategic Dimension 2 ? Strategic Dimension 1
  22. 22. Umbrellas…innovation? Strategic Dimension 2 ? Strategic Dimension 1
  23. 23. LG Internet Refrigerator Page 23
  24. 24. Airbus A380 Page 24
  25. 25. Segway Personal Transporter Page 25
  26. 26. Tooth Tunes Page 26
  27. 27. Converging Industry Advantage Entertainment Music, Movies, News, Sports Palmtop WirelessComputing Telephony Books GPS Page 27

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