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 being commercialized, 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)
• 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 (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
• 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
• 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, can take many forms, can come from many sources, customers define value, and there is only one test of a job well done -- a customer who is willing to pay for a product
• Different value definitions through the years

  • Manufacturing perspective: value is efficiency
  • Sales perspective: value is convincing the customer
  • Customer perspective: value is defined by the customer
• 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
• 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: Beating the competition<|>Customer Acquisition: Exploiting existing demand to steal customer (which may result to low customer loyalty)<|>Make the value-cost trade-off
• Blue Ocean Strategy

  Market Creation: Create uncontested and unexplored market spaces<|>Make the competition irrelevant<|>Customer-centric: Create and capture new demand<|>Break the value-cost trade off
• 1. Action Framework to pursue Blue Ocean Strategy

  1. Raise

  2. Create

  3. Reduce

  4. Eliminate
• If you are in a blue ocean, you probably have value innovation
• 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
• Business Model Canvas


  Strategic management tool used to describe, design, challenge, invent, and pivot your business model
• Customer Segments

  • Mass Market
  • Niche Market
  • Segmented
  • Diversified
  • Multi-sided
• Elements of Business Model Canvas

  • Customer Segments
  • Customer Relationships
  • Channels
  • Value Propositions
  • Key Activities
  • Key Resources
  • Key Partners
  • Cost Structure
  • Revenue Streams
• Uber has a mass market customer base