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3.6 - Coggle Diagram
3.6
Importance of Innovation for Strategists
Technology Push & Market Pull
Technology push is originated from within the organisation knowledge and capabilities e.g. R&D
Market pull is originated from the users and customers and their needs and wants e.g. Lead User model
Open Innovation
Frugal Innovation
The process of reducing the complexity and cost of a good and its production.
Product vs Process Innovation
Product innovation e.g. Apple
Process innovation is concerned with more efficient and new ways of processes
Business model innovation is about new ways of business conduct and industry redefine e.g. Amazon, Airbnb and Uber
Product innovation usually precedes process innovation
Open
vs Closed Innovation
Closed innovation is originated with in the organisation's know-how and resources
Open innovation
is from external sources by exchanging ideas with companies and competitors
Open innovation is organized around platform and generates ecosystems
e.g. Proctor & Gamble
General Electric FirstBuild that encourage co-creation and crowdsourcing innovation
Henry Chesbrough
Strategy of choosing acquisitions to access innovative capabilities
The need for constant development of new innovative products and services to successfully compete in the mrket
Innovation and Strategic Management
Strategic Entrepreneurship
Strategic activities to create competitive advantage
(Advantage-seeking)
Entrepreneurial activities to create opportunities
(Opportunity-seeking)
Essential for business sustainability
Opportunity Recognition
The first key step in
entrepreneurial thinking
Factors in recognizing opportunities
Entrepreneur
Resources & capabilities
Environmental trends and market gaps
Innovation emerges as one of the outcomes of the entrepreneurial process
Innovation is a dynamic capability that can renew organisational resources and capabilities
Aligning Innovation Strategy with Business Strategy
It is essential to align innovation initiatives with the overall business strategy
For example, setting up an internal entrepreneurial ventures '
intrapreneurship
" and embracing
open innovation
or pursuing
external alliances
all might not yield log-term capacity for innovation that is embedded in the organisational system (Pisano, 2015)
An explicit innovation strategy that fits the company's core is required to meet the competitive needs
Different types of innovation strategies will fit different business models and capabilities
Innovation Diffusion
Supply and Demand sides
Supply-side
Degree of improvement
above current products
Compatibility
with other complementary products and services
Complexity
of use or complexity of the product or service marketing methods
Experimentation
Triability
Relationship management
Demand-side
Market Awareness
Network Effects
Customer Propensity to Adopt
The Diffusion S-curve (Decision points)
Tipping Point
, when the demand explodes
Plateau
, demand slows down
Extent of diffusion
, estimating the final ceiling on diffusion
Tripping Point
the opposite of tipping point when demand collapses
The Diffusion of Innovation Theory (Rogers)