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Rules for Bringing Innovations to Market         Renaissance Strategic Consultants
Structure       Nature of Networked Markets   Characteristics of Networked Markets         Challenges for InnovatorsFramew...
Nature of Market’s• Markets resist new ideas & products    – Television acceptance in Mass Media    – Launch of PC’s, Mobi...
Why do markets resist innovation?
Markets are adverse to innovation as they crave for                 EQUILIBRIUM
Nature of Market’s                            EQUILIBRIUM…….Equilibrium is a situation where every player in the market be...
Nature of Market’s• Equilibrium in the market lends                                                        “Innovations   ...
Nature of Networked Market’s   In a networked                        Virtual connections market, hostility to             ...
Nature of Networked Market’s      Once enough players in a     networked market decide to      switch to a new product,   ...
Characteristics of Network                    Network                    Effects                    Equilibrium           ...
Characteristics of NetworkNetwork Effects:   a)     Products that have large networks around them are often cheaper to use...
Characteristics of NetworkEquilibrium: Networks look for Equilibrium   a)   Companies must choose their strategies only af...
Characteristics of NetworkNetwork Hubs  a)   As the network becomes bigger, the interconnections between players tend to  ...
Challenges for Innovators                                      They have to create a new                                  ...
Framework for entering the Networked Market                     Begin at the endgame                     Complement the po...
Begin at the End Game                     Think several                    steps ahead and Begin with the                 ...
Complement the Power Players                  To get the desired                Endgame, the innovator                   h...
Offer coordinated switching incentives• Players need to be convinced that their best choices ought to be   different becau...
Maintain Flexibility• Every potential endgame is based on its expectations about events   that will happen or on the behav...
Think EQUILIBRIUM!!!!  Imagine the future while reasoning back, complement powerfulplayers while creating change, offer in...
Individual BehaviorFor a student the way he solves a problem during exams he alwaysfeels it to be the right way and his fr...
Individual BehaviorThe student is comfortable with his method of solving the problem   – He has validated his method   – H...
Challenge to the Innovator• Understanding why is he comfortable with the old method• Show him that the new method is bette...
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Rules for bringing innovations to market

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The presentation talks about how one can introduce new innovations to the market, what are the factors that resist new innovation and how to counter those factors.

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Rules for bringing innovations to market

  1. 1. Rules for Bringing Innovations to Market Renaissance Strategic Consultants
  2. 2. Structure Nature of Networked Markets Characteristics of Networked Markets Challenges for InnovatorsFramework for entering into Network market
  3. 3. Nature of Market’s• Markets resist new ideas & products – Television acceptance in Mass Media – Launch of PC’s, Mobile phones• Despite the risks, companies love innovations as they drive profits, growth and Shareholder value
  4. 4. Why do markets resist innovation?
  5. 5. Markets are adverse to innovation as they crave for EQUILIBRIUM
  6. 6. Nature of Market’s EQUILIBRIUM…….Equilibrium is a situation where every player in the market believes that he or she is making the best possible choices & that every other player is doing the same
  7. 7. Nature of Market’s• Equilibrium in the market lends “Innovations – Stability to the players expectations change the – Validation to their choices Equilibrium, which – Reinforcement to their behavior is why markets• When Innovation enters the market resist them” – It upsets the players expectations and choices – Introduces uncertainty in decision making
  8. 8. Nature of Networked Market’s In a networked Virtual connections market, hostility to between players caninnovations becomes also affect thestronger when players adoption of products are interconnected
  9. 9. Nature of Networked Market’s Once enough players in a networked market decide to switch to a new product, other players motivation to do so becomes stronger
  10. 10. Characteristics of Network Network Effects Equilibrium Hub
  11. 11. Characteristics of NetworkNetwork Effects: a) Products that have large networks around them are often cheaper to use than products than products that have small network around them b) Products value to each user increases as the size of the network grows “Hence companies with superior products often can’t topple market leaders!!! “
  12. 12. Characteristics of NetworkEquilibrium: Networks look for Equilibrium a) Companies must choose their strategies only after systematically considering the decisions that other players will make. b) As the interconnection between players increases, the payoffs on their choices depend even more on others’ decisions.
  13. 13. Characteristics of NetworkNetwork Hubs a) As the network becomes bigger, the interconnections between players tend to cluster around just a few, also known as network hubs b) Power distribution within networks is mostly concentrated in the hubs because of the efficiencies that come with that concentration c) By tapping the most powerful parties in a network, innovators can reach virtually everyone in the network “Small world Phenomenon”
  14. 14. Challenges for Innovators They have to create a new Equilibrium where manyThey have to unravel the players have adopted the Equilibrium innovation and believe systematically they are better off because of it
  15. 15. Framework for entering the Networked Market Begin at the endgame Complement the power players Offer incentives Preserve flexibility
  16. 16. Begin at the End Game Think several steps ahead and Begin with the work back from end in mind…. the endgame wanted Innovator should implement only The endgame is those strategies plausible but that maximize itsspeculative guess chances of getting to its desired endgame
  17. 17. Complement the Power Players To get the desired Endgame, the innovator has to change the behaviors of many players in the market The network hubs can help propagate A few Power an innovation’s players can help this benefits because of happen their ties with many other players
  18. 18. Offer coordinated switching incentives• Players need to be convinced that their best choices ought to be different because choices of other participants have changed
  19. 19. Maintain Flexibility• Every potential endgame is based on its expectations about events that will happen or on the behavior of other players, which creates uncertainty• Flexibility is essential in the plans
  20. 20. Think EQUILIBRIUM!!!! Imagine the future while reasoning back, complement powerfulplayers while creating change, offer incentives – & remain flexible at all times……..
  21. 21. Individual BehaviorFor a student the way he solves a problem during exams he alwaysfeels it to be the right way and his friends are also using the same technique “What happens if someone tells him a new method of solving the problem…..”
  22. 22. Individual BehaviorThe student is comfortable with his method of solving the problem – He has validated his method – He has confidence in it “The new method would make him move away from his comfort zone and so he is not willing to accept the new method”
  23. 23. Challenge to the Innovator• Understanding why is he comfortable with the old method• Show him that the new method is better!!!
  24. 24. Follow us on:THANK YOU Visit us on: www.renainet.com

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