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Product innovation
The document discusses different types of innovation and their impact on profitability over the product life cycle. It notes that many significant 20th century innovations were organizational rather than technology-based. The document also discusses concepts like disruptive innovation, sustaining versus disruptive technologies, and the challenges of continuous versus discontinuous innovation. It emphasizes the importance of innovation to remain competitive but cautions that innovations must be introduced at the right time for the appropriate market needs.
Product innovation
- 2. What is it? …concernedwith the new or the novel. Is innovation technology based? Many of the more significant innovations of the 20th century are organizational rather than technology based.
- 3. Different types ofInnovation give greater profitability at different points in the life cycle of a product family New product invention, tailoring, Profitability and development Process Marketing Application Business Innovation Innovation Innovation Model Innovation Structural Disruptive Product Innovation Innovation Innovation Time
- 6. The anatomy ofa product
- 7.
- 8. 1.Product Line Based: A)New-to-the –world Products B)Line Extensions C)Me-too products D)Products Modifications
- 9. Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation
- 10. Genuine uncertainty › It’s not going to happen – certainly not now Cannibalization › It will compete with our current products Shifts in the customer base › Our current customers don’t want it Margin erosion › It will make less money
- 11. Time horizons& Incentives Fear of (individual) cannibalization Overload Competency Traps
- 12. Who buys atechnology when it is first introduced? Performance New technologies sell to: - New customers - With new needs - Often at lower margins Time
- 13. Complementary Uniqueness Assets Maturity Takeoff Ferment
- 15. effectiven efficiency cutting e ess different copying enhancin g impossibl e
- 16. Dynamically continuous innovation: A pronounced modification to an existing product › Requires a *moderate* amount of learning or behavior change › Convergence: The coming together of two or more technologies to create a new system with greater benefits than its parts
- 18. “ Disruptive innovationtheory points to situations in which new organizations can use relatively simple, convenient, low-cost innovations to create growth and triumph over powerful incumbents.” Sustaining versus Disruptive Innovation
- 19. Markets that don’t exist can’t be analyzed The experts, including you, will be wrong Don’t invest all your resources on the first effort — beta release Discovery, not implementation, based planning
- 20. Markets that don’t exist can’t be analyzed The experts, including you, will be wrong Don’t invest all your resources on the first effort — beta release Discovery, not implementation, based planning
- 21. Bring adifference value proposition to the market Initially under perform established products in mainstream market But, the products improve at a rapid rate Superior in ways that are not valued by the established market — more reliable, easier to use, or cheaper
- 22.
- 23. Performance Overshot Customers Undershot Customers Time
- 24. Automated Electronic Paper Library Collections Paper Library Library Bib Control Paper Collections Paper Collections Digital Bib Control Electronic Bib Control Digital 1965-1995 1995-date
- 25. Automated Electronic Paper Library Collections Paper Library Library Bib Control Paper Collections Paper Collections Digital Bib Control Electronic Bib Control Digital 1965-1995 1995-date Sustaining Many Innovations Disruptive Innovations
- 26. Browsing versusSearch Britannica versus Wikipedia Journals versus Repositories
- 27. Browsing —requires prior arrangement, you are putting things (usually books) in order on a shelf Problems › Mind reading — guess what the user is thinking › Fortune telling — make predictions about the future
- 28. Searching — › “the only group that can categorize everything is everybody” › “One reason Google was adopted so quickly when it came along is that Google understood there is no shelf… Google can decide what goes with what after hearing form the user.”
- 29. “The Web hasan editor, it’s everybody. In a world where publishing is expensive, the act of publishing is also a statement of quality — the filter comes before publication. In a world where publishing is cheap, putting something out there says nothing about quality. It’s what happens after it gets published that matters. If people don’t point to it, other people won’t read it.”
- 30. Google versustraditional bibliographic control Open Archives/Repositories versus journals (and soon monographs?) Google Book Project, Open Content Alliance versus library collections Reference librarians versus Yahoo/Google Answers
- 31. Product variation Customization Modular Designs
- 32. New Technology Hybrid Technology
- 33.
- 38. New Product DevelopmentProcess Evaluate at each Opportunity Identification stage to determine Go/No Go whether to proceed. Design Go/No Go Key is to manage Testing risk of introducing a Go/No Go failure or not Introduction introducing a Go/No Go success. Life-cycle Management Proactive vs. Reactive
- 39. Success Rate EntirelyNew Products 3000 raw 125 beginning 300 submitted ideas projects ideas .03% .8% .3% 1.7 launches 4 major 9 large 60% developments developments 25% 11% 1 commercial success
- 40. It’s a greatlittle product, but we’re still working on packaging and handling
- 42. New, familiar New, unfamiliar Decreasing knowledge of the market Familiar Familiar New , familiar New , unfamiliar Decreasing knowledge of the technology
- 43. Decreasing knowledge ofthe market Market Business New Business Expansion Expansion Model Market Business Business Extension Extension Expansion Market Product Product Penetration Extension Expansion Decreasing knowledge of the technology
- 44. Probability of Success Market Business New Business New Product with Expansion Expansion Model unrelated technology in existing market: 50% Market Business Business Extension Extension Expansion Market Product Product Penetration Extension Expansion
- 45. Market Business New Business Expansion Expansion Model Probability of Market Business Business Success Extension Extension Expansion Existing product in a new Market Product Product market: 15% Penetration Extension Expansion
- 46. Improved product in Market Business New Business existing market: 75% Expansion Expansion Model Market Business Business Extension Extension Expansion Market Product Product Penetration Extension Expansion
- 47. Market Business New Business Expansion Expansion Model Market Business Business Extension Extension Expansion Probability of Success Market Product Product Penetration Extension Expansion New Product in a New Market: 5%
- 49. A company cannotrest on its laurels; many product class winners have fallen victim to their success US Steel (steel) ICI (chemicals) Kodak (photography) Goodyear (tires) Polaroid (instant photography) Zenith (TVs) IBM (PCs) Smith-Corona (typewriters)
- 50. The right product is one that becomes available at the right time (i.e., when the market needs it), and is better and/or less expensive that its competition. To have the right product, therefore, one must: Predict a market need Envisage a product whose performance and capability will meet that need Develop the product to the appropriate time scale and produce it. Sell the product at the right price
- 51. There are, unfortunately, many examples of potentially innovative space products being developed at the wrong time, at the wrong price point, or due to poor market predictions: TV-SAT and TDF-SAT: Performance wrong (few high power transponders when many medium/low power were needed) OLYMPUS: Too soon (large busses only started to become needed some years later) IRIDIUM and GLOBALSTAR: Wrong market and/or too late (development of GSM took away most of the market) AIRPHONE: Too expensive CONCLUSION? Introduce only Productive Innovation
- 55. OTHER POSSIBILITIES??? Battery PoweredBattery Charger? Braille TV Guide? Fireproof Matches? Solar Powered Flashlight? Sugar coated Insulin btablet? .....
- 57. › Innovation canbe productive or wasteful. The secret to success is being able to spot the difference in advance and encourage the former. This should be your goal!!
Editor's Notes
- #5 Conclusion? Innovation should have a composite definition: a process whereby a new idea is conceived and detailed in the mind, developed into a physical entity through detailed design, analysis, experimentation, and production, and then introduced to give a company a competitive edge.In simplest terms, however, innovation is simple change for the better.
- #6 Customization for different group of people
- #9 Product definition:A product is a physical good, service, idea, person or place that is capable of offering tangible and intangible attributes that individuals or organisations regard as so necessary, worthwhile, or satisfying that they are prepared to exchange money, patronage or some other unit of value in order to acquire it.
- #35 The client was able to prioritize the three top composite markets and applications. The company… Optimized their R&D spendAddressed needed improvements with their materials and technology Formulated an overall market entry strategy for the composites industryCreated an approach for the individual markets and applications. …resulting in years of time and millions of $ savings, allowing the company to confidently focus on executing a well developed plan.