Module 4

• Innovation


  The implementation of a new or significantly improved product, process, service, or system that creates significant value for customers or society
• Commercialization


  The process of introducing a new product, service, or method to the market
• Without commercialization, an innovation will remain as an invention
• Successful commercialization strategy


  • Aims to make a product as profitable and valuable to the customer as possible
• Marketing


  A sub-set of commercialization that focuses on gaining the target audience's attention (e.g. PR campaigns, ads, digital marketing) leading them to purchase the product or service
• Product Launch


  Part of the commercialization process where the product or service itself is introduced to the market
• Commercialization


  The broader end-to-end process that involves everything to do with bringing your new product or service successfully to the market (from manufacturing to distribution to marketing)
• 4 Advantages of Effective Commercialization

  • Maximizing market potential
  • Better competitive advantage
  • Improved resource allocation
  • Risk mitigation
• 8 Steps of Effective Commercialization

  1. Market Research and Analysis

  2. Business Planning

  3. Product Development

  4. Intellectual Property Protection

  5. Manufacturing and Operations

  6. Marketing and Sales

  7. Product Launch and Distribution

  8. Customer Support and Feedback
• Strategic Innovation


  Ensuring that everything the company does (their processes, products, services, business models) is aligned with its goals of driving business growth, generating value for the company and its customers, and creating long-term competitive advantage
• If an innovation is strategic, commercialization is easier to achieve for the organization, ensuring them long-term success and relevance in the market
• 3 Characteristics of Strategic Innovation

  • The organization has a different and unique way of doing things
  • The organization presents a unique customer value proposition
  • The organization delivers superior performance outcomes
• What enables Strategic Innovation

  • Leadership
  • Resources
  • Collaboration
  • Communication and Change Management
  • Culture
• Customer Value Proposition

  Creating an innovative product that is valuable
• Components of Customer Value Proposition

  • Core Product
  • Actual Product
  • Augmented Product
• Value is understood by all, though hard to define
• Different perspectives on value

  • Manufacturing perspective: value is efficiency
  • Sales perspective: value is convincing the customer
  • Customer perspective: value is defined by the customer
• Augmented


  Stickers
• Comfort


  Actual value of hotels
• Augmented value of hotels

  Any service related
• In summary though hard to define, value is understood by all
• Forms of value

  • Quality vs quantitative
  • Practicality
  • Product image
  • Quality
  • Accompanying service
• Customers define value, and it differs from customer to customer
• The only test of a job well done is a customer who is willing to pay for a product
• Manufacturing perspective of value

  Efficiency - how much can I make?
• Sales perspective of value

  Convincing the customer - how much can I earn?
• Customer perspective of value


  Defined by the customer - how much the customer desires the product
• Customers don't buy products themselves, but the satisfaction of particular needs
• Effectiveness (doing the right things that the customers valued) became more important than performance
• Customer Value Proposition


  Providing what your customers want that competitors can't provide
• Customer Value Proposition examples


  • Ateneo's core curriculum
  • Nintendo's portability and mobile-focused games
  • Apple's iCloud environment
  • Pizza Hut's stuffed crusts vs Shakey's thin crusts
• 3 Facets of CVP

  • The value that the offering delivers to the customer
  • The customer
  • The channels
• Red Ocean Strategy

  Compete in existing industries, competition-centric, customer acquisition, make the value-cost trade-off
• It's difficult to enter a Red Ocean
• Blue Ocean Strategy


  Market creation, make the competition irrelevant, customer-centric, break the value-cost trade off
• The unknown market space, untainted by competition (hence, competition is irrelevant and non-existent so far)
• Demand is created rather than fought over
• 1. Action Framework to pursue Blue Ocean Strategy

  • Raise
  • Create
  • Reduce
  • Eliminate
• If you are in a blue ocean, you probably have value innovation
• Business Model


  How a company plans to earn money, company's strategy for making a profit