This document discusses strategies for managing disruptive innovation within an organization. It outlines different structures for developing disruptive products/services that are either aligned or not aligned with the core business. These include dedicated teams, product managers, and ventures. It also discusses strategies for implementing disruptive innovations, such as direct integration, new business units, and spin-offs. Finally, it discusses ways companies can combat commoditization through value-added strategies like segmentation, customization, and bundling.

1. ManagingInnovation
MBA 6103
Unit 6
Disruptive Innovation
& Implementation

3. • A product/service in alignment with the organizations existing strategy and core
competencies
• Dedicated development team
• Functional structure
• Lightweight product manager structure
• Heavyweight product manager structure
• Project execution teams
• Concept generation
• Project selection
• Product development
• Product commercialization and review

4. • A product/service outside of the organization’s existing strategy and core
competencies.
• Internal ventures (i.e. intrapreneurship)
• External ventures, partnerships, and/or alliances
• New ventures, spin-out/off projects
• Similarities/parallels to entrepreneurial ventures

5. • Growth
• Effective use of resources
• Leverage supply chain/value chain relationships
• Prepare for divestiture
• Leverage the ambitions of personnel
• Leverage economies of scale in product development
• Smooth out cyclical products/markets
• Diversification
• Develop new competencies
• Example:GE

6. • Direct Integration
• Integrated BusinessTeams
• NewVenture Department
• NewVenture Division
• Special Business Unit
• Independent Business Unit
• Nurtured Divestment
• Complete Spin-off
• Example PepsiCo andYum! Brands

7. • Combats commoditization
• Core product is homogenous
• Price wars
• Abundance of competing products
• Dissolution of brand equity
• Strategies forValue Added:
• Segmentation
• Customization
• Bundling

8. • Segmenting
• Based upon common buying/usage factors
• Customization
• Product/Service tailoring at an individual level
• Enhances differentiation at an individual level
• Revives brand equity/loyalty
• Increases dependency
• Bundling
• Combining related (or nonrelated) products/services into a single offer
• Enhancing differentiation
• Add “perceived value”
• Examples:
• Amazon – prime membership
• Netflix – pricing options