Module 3

• Innovation


  A creative person's response to limitations
• How to respond to limitations

  Try to be different and unique with what you have
• Innovation


  Embodiment of new knowledge in a creative solution (product, service, business model, or strategy) that benefits organizations and/or society
• Creativity


  Solving problems with empathetic solutions
• Innovation


  Ensuring creative solutions are new, unique, and marketable
• Benefits of innovation for organizations

  • Competitive advantage
  • Helps fight uncertainties and stay relevant in times of adversities
  • Helps (not only to survive but also) to grow in complex situations
• Examples of innovation

  • Nintendo (Wii and Switch)
  • Nokia (they weren't able to stay relevant since they didn't innovate as their competitors)
  • Online Classes (schools adapting to online setting)
• Invention


  The creation of a new product, process, service, or system
• Innovation


  The implementation of a new or significantly improved product, process, service, or system that creates significant value for customers or society
• All innovations are inventions but not all inventions are innovations
• Innovations are inventions that are embraced and used by the masses
• Innovations are inventions that have high commercial success
• Types of Innovation

  • Product Innovation
  • Service Innovation
  • Process Innovation
  • Business Model Innovation
  • Marketing Innovation
  • Social Innovation
• Product Innovation


  • Aims to improve characteristics and attributes of a certain product or use components that differ from previously manufactured products
  • Usually involve new technologies or are built from combining existing tech in a new way
  • Always tangible
  • Can be (1) new features or (2) never been seen before
• Examples of Product Innovation


  • iPhone
  • Fidget spinner
• Drivers of Product Innovation

  • Changes in customer requirements
  • Need to increase the product's life cycle
  • Urge to tap new markets or segments
  • Enhance the look and feel or convenience of using the product
• iPhone vs. Samsung

  Apple had to innovate to catch up with Samsung's camera quality
• Service Innovation


  • Involves significantly improving a service concept in a new or existing market
  • Goal: generate value for customers by making their lives easier and more convenient
• Examples of Service Innovation

  • Uber, Grab, Angkas, Airbnb, dating apps (bumble)
• Benefits of Product and Service Innovation

  • Greater perceived added value
  • Higher prices
  • Early customer loyalty
  • Enhanced reputation as an innovative business
  • Increased market share
• Process Innovation


  • Aims to implement a new or significantly improved production method (for products) or delivery method (for services)
  • Can be achieved by applying new technology or improved methods to a process
  • Goal: save time, money, and/or serve customers better
  • Involves new techniques, equipment, software, and can come with cultural or structural changes as well
• In process innovation, the final product is usually not changed, but the method of bringing out the product is improved</b>
• Examples of Process Innovation


  • Mcdo ordering kiosks
  • Demand Forecasting
• Benefits of Process Innovation

  • Reduced costs
  • Improve process quality = consistency
  • More responsive customer service
  • Greater flexibility of operations
• Business Model


  How a company plans to earn money
• Business Model Innovation


  Innovating on a company's business model changes the way that a company delivers value to its customers or the way it captures customers from the market
• Examples of Business Model Innovation

  • Retail Model
  • On-Demand Model
  • Razor and Blade
  • Franchise Model
  • Rental Model
  • Online Model
• When do businesses have to innovate their business models?

  • Saturated market
  • Outdated technology
  • Undesirable change in industry margins
  • Unwillingness or inability to keep up with global trends
  • Low customer satisfaction
• Benefits of Business Model Innovation

  • New markets or customers
  • New channels of service, delivery, or distribution
  • New pricing or revenue model
  • New design of the product or service
• Marketing Innovation


  • Innovates the way a certain product, service, or process is perceived
  • Involves configuring the perception to fit a specific context like a market, or target customers
  • Goal: open up new markets or increase market share, and to improve relationships and customer engagement
• Examples of Marketing Innovation

  • Brand Repositioning
  • Social Media and Digital Marketing
  • Loyalty Programs
• Benefits of Marketing Innovation

  • A better image
  • Enhanced value of the brand
  • Broader access to markets
• Social Innovation


  New practices or technological inventions that aim to meet social needs in a better way than the existing solutions<|>Goal: to develop the community by transforming the welfare and interests of a particular population (improving working conditions, providing more education, or making the community healthier)
• Examples of Social Innovation

  • Social Enterprises (Virtualahan)
• Benefits of Social Innovation

  • Empowerment of sectors
  • Better quality of life in terms of physical, emotional, and mental well-being
  • A follow-through with Maslow's Hierarchy of needs
• Degree of Innovation


  How "new" or "novel" something is
• Incremental Innovation


  • Characterized by small changes to existing products, processes, or business models that the company operates in a known or similar market
  • Utilizes existing knowledge to (1) reduce costs, (2) create functioning improvements in existing products, services, or processes, or (3) increase competitiveness in existing markets
  • Low degree of innovation = low uncertainty and low risk because they rely on steady and manageable enhancements
  • Does not create new markets and does not use radically new technology
• Examples of Incremental Innovation


  • Improving features of products/services of already existing products
  • New models or new versions of existing products that are already mainstream
• Radical Innovation


  • Represents something fundamentally new
  • Utilizes new knowledge to make significant change that transforms entire markets or industries
  • High degree of innovation = high risk and high uncertainty
  • Can solve global problems and address needs in completely new way; transforms the market and even the economy
• Examples of Radical Innovation


  • Very first iPhone