COMM320-05-InnovationWK5

COMM320-05-InnovationWK5 - Innovation and the Entrepreneur...

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    Innovation and the Entrepreneur Competitive advantage through  INNOVATION
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    What is Innovation? Innovation -- putting into practice a new idea or invention  to answer an unmet customer need The more radical the idea, the more profound the impact Innovation is inherently incremental; yet it can be  managed However, discovery and invention are essential non- rational processes - ‘Eureka!’ -- favoring an  entrepreneurial environment ability to sustain competitiveness resulting from increased  value added -- 7 out of 10 major innovations are driven by  recognizable market need --  know your customers !!
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    Types of Innovation Breakthrough Innovation  ( Disruptive ) Radical change leading to a new product or service E.g. Bell, Edison, Apple, Tucker ‘48 Incremental Innovation  ( Sustaining ) –  more common Improvement or enhancement of existing products,  services or processes The market is proven   market growth and  profitability are more certain E.g. Advances in computers, cell phones, cameras,  music…
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    Innovation: The Entrepreneurial  Process The innovative idea Based on the entrepreneur’s ability to sense an opportunity (market gap)  based on his/her traits and skills The window of opportunity Characterized by a short time horizon Exploiting the opportunity requires a match between the  innovative idea and the market gap (timing is the critical element) Evaluating the opportunity The market test: based on customer needs, sufficient demand,  and expected volume  The test of fit: matches entrepreneur’s skill-set, objectives, and  resources  The economic test: assessing level of risk and ROI
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    Successful  Commercialization Commercialization  is the critical component;  There are many inventions, an innovation has economic impact Economic impact is measured by the ability for the innovation to fill  unmet needs or to increase demand for a product or service (market 
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COMM320-05-InnovationWK5 - Innovation and the Entrepreneur...

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