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A snapshot of the summary - Product Innovation
Product Innovation - Sources of Innovation - Standard Battles
What is the difference between product and process innovationProduct: output of an organization --> products and services
Process: way an organization produces products / or markets products
What is the difference between Steady-state and discontinuous technologiesSteady-state: fulfills similar market need (more) by using/expanding the same knowledge base
Discontinuous: fulfills similar market need by using a new knowledge base.
What is the difference between modular and architectural innovationModular: Improving component of a bigger product
Architectural: Overall design of a system or the way the components (modules) interact
Discuss the S-curve. Why is it an S. And what is the sailing effect?Two types:
1. Diffusion/adaption patterns
Y-axis: Market penetration
2.Technology performance dev.
Initially slow: unfamiliar technology
Middle acceleration: technology becomes better understood and utilized by mass market.
End: Market saturation.
The sailing effect: In the end of the technology performance development S curve, the limits of the technology is reached: then a second technology can take over. Between them a sailing effect can occur: old technology is improved since it does not want to be replaced by new technology. (e.g. sail boats vs. steamboats)
What is meant with the chasm in the innovation adoption curve?Chasm needs to be crossed to get from the early adopters to the early majority. Companies need to scale up and become efficient to target the big early majority market.
What are factors that influence the diffusion/adaption of innovations?Fist customer from early majority
Relative advantage: better than current practice
Compatibility: degree same to existing values, needs and experiences of potential adopters.
Observability: visibility of results of innovation
What is a dominant design? Why do they emerge?Product or product architecture that dominates a product category.
It is adopted by the majority of producers, typically creating a stable architecture on which the industry can focus its efforts on.
- Increasing return on adaption
- Learning effects
- Network exeternalities (e.g. mobile phones, railroads)
Customer value & Business model innovation - Business planning
What is customer value based on functional analysis?Customer value = Perceived benefits (by customers)
Total Customer Costs
Perceived benefits: Main, adding, (-)harmful
Total customer costs: Purchasing costs, operating costs, repair/removal costs
What is customer value in terms of utility?Customer value = Satisfaction of customer needs
Use of customer resources
Sat: problems, results, feelings
Use: Time, money, effort
Not customers are equal.. Name 3 ways to gain competitive advantage (in the sense of what do we offer to whom?)- Differentiate
- Total Cost advantage