lecture 1

• Innovation


  The act of introducing a new device, method, or material for application to commercial or practical objectives
• Innovation is a process rather than a single event in time
• Creativity


  Generally believed to enhance innovative activities
• New product development


  • Development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts
• Major stages in new product development

  1. Idea Generation

  2. Idea Screening

  3. Product Concept

  4. Concept Testing

  5. Marketing Strategy Development

  6. Business Analysis

  7. Product Development

  8. Test Marketing

  9. Commercialization
• There is no single 'true' definition of innovation, but it could be defined as "the act of introducing a new device, method, or material for application to practical objectives"
• New products are the lifeblood of a company
• New product of the week: Nike Aerogami


  • A smart jacket with tiny vents that pop open when they sense sweat, and close when the body cools off
• Today's businesses require a constant flow of new ideas, angles and solutions to stay abreast of rapid change and uncertainty
• Creativity is not learned, but rather unlearned
• Innovation


  New products are the main drivers of economic growth and prosperity, rather than incremental improvements of what already exist
• Radically new products


  Can create completely new industries
• Competition of profit-seeking companies


  Leads to innovation, growth and ultimately prosperity
• Process of innovation


  Can be seen as a process of 'creative destruction'; waves of innovations that restructure whole markets in favour of those who grasp discontinuities faster
• Joseph Schumpeter


  Austrian Economist and founder of modern theories of growth
• Types of innovation


  • Continuous/Incremental innovation
  • Discontinuous/Disruptive innovations
• Continuous/Incremental innovation


  • Small, incremental changes
  • Do usually not cause major market disruption
• Discontinuous/Disruptive innovations


  • Big, step changes
  • Do usually cause market disruption or market creation
• Continuous/Incremental Innovation


  • Canon 350D
  • Canon 500D
• Discontinuous/Disruptive Innovation


  • AE-1 (analogue)
  • 500D (digital)
• Disruptive innovations


  • May impact and even destroy whole industries (cf., Schumpeter's creative destruction)
  • May also create entirely new industries and establish platforms for new product, service, and process innovations
• Typology of innovations


  • Incremental
  • Disruptive
• Analogue to Digital Cameras is an example of incremental vs disruptive innovations
• The three contexts of innovation

  • Within the firm / organisation (micro)
  • Within an industry (meso)
  • Within a country, culture, or globally (macro)
• Micro context of innovation

  • Internal structures, departments, hierarchies
  • Company values, culture, vision
  • Internal resources, knowledge, core competencies, people
• Meso context of innovation

  • Competition & Cooperation
  • Dominant Designs / Best Practice
  • Supply chains, regulations, other industry-specific external factors
• Macro context of innovation

  • State / government intervention, policies, politics
  • Research by universities, non-private labs, basic research
  • Cultural factors, e.g., discourses, beliefs, values
  • Globalisation, global markets, local adaptations
• Technology


  Knowledge applied to products, services, or processes
• Science


  Creates new knowledge
• Engineering


  Applies knowledge to create technologies
• Views of innovation


  • Market-Based View
  • Resource-Based View
• Market-Based View


  • Emphasises the external market environment
  • Innovation is driven by responding to market opportunities and demands
  • Competitive Advantage is achieved by understanding and exploiting market dynamics
  • Rapid changes in market conditions guide innovation strategies
• Resource-Based View


  • Centres on internal resources and capabilities
  • Innovation stems from leveraging unique internal resources and capabilities
  • Competitive Advantage is built by possessing and deploying valuable, rare, and inimitable resources
  • Stable resource base is crucial for sustainable innovation
• Models of innovation process

  • Linear Models
  • Simultaneous Coupling Model
  • Interactive Model
  • Open Innovation
• Linear Models


  • Assumes linearity (downstream)
  • Starting point and end is known
  • No feedback between steps (no back & forth)
  • No coupling with environment (contexts of innovation)
• Simultaneous Coupling Model


  • Simultaneous interaction between all three functions
  • Non-linear, i.e., start and end is not known in advance
  • More flexible than linear model
  • No interaction with context of innovation (meso, macro)
• Interactive Model


  • Links together technology push and market pull
  • No definitive starting point and end of innovation process
  • Perpetual: one innovation might fuel the next one
  • Core remains linear, but organisational capabilities are dynamic / interact w/ science-and technology base AND market and needs in society
  • No explicit interaction with industry, state, culture, or global environment
• Open Innovation


  Firms should not rely solely on internal research and development (R&D) for innovation but should also utilise external sources and collaborate with external partners
• Key Principles of Open Innovation

  • Knowledge Flow: Two-way knowledge exchange from internal and external sources
  • Boundary Spanning: Encourages cross-organisational collaboration
  • Leverage Resources: Utilise external partnerships, alliances, and resources
• Strategies of Open Innovation

  • Inbound: Source external ideas for internal innovation
  • Outbound: Commercialize internal innovations externally
  • Coupled: Balances both inbound and outbound approaches