BA310-3-5 Innovation Final - 1 BA 310 Innovation McCarter...

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Unformatted text preview: 1 BA 310: Innovation McCarter – More Experiments 2 Innovation Why is innovation important? “ The first company to capitalize on an innovation reaps the greatest rewards and most improved operating margins. When competitors start to use the same technologies, your competitive advantage or differentiation gets commoditized. Then its time to move on to the next new thing .” – John Chambers, CEO, Cisco Systems The importance of innovation is at historic highs For “the usual reasons” – broad trends that we’ve seen before: rapid technological change, shifting customer preferences, deregulation, globalization, and so on. Companies specifically target (increasingly) large parts of their sales to be of recently introduced products. Is Chambers right? Is being first best? A – I Definitely Agree B – I Agree C – I Somewhat Agree D – I Somewhat Disagree E – Can’t Say 3 Today’s Roadmap: Innovation Innovation Pros & Cons: Technology Cycle, Leadership and Followership How do you generate innovation? Structural, Cultural, Human Resource Factors How do you develop new products? Goals and Principles 4 What is Innovation? and related background Innovation – Change in technology, a departure from previous ways of doing things Product innovation – change in actual output Process innovation – change in methods of producing outputs (e.g., TQM) Innovation process – how creative ideas are transformed into a useful product, service, or method of production Technology – methods, processes, systems and skills used to transform resources into products Creativity - ability to combine ideas in a unique way or to make unusual associations between ideas Dominant Design - a widely-accepted standard—de facto if not de jure—for a particular product or process . Classic Technology “Life Cycle” Technical performance Time Theoretical maximum First to mkt. Late to mkt. Dominant design emerges Process innovation increases High product innovation Lots of experimentation Development slows as limit approached 6 Pros and cons of leading the pack Technology leadership strategies (“first to market”): Advantages: “First-mover advantage” – little competition, high profit margins Can occupy best niches & build entry barriers (loyalty, patents) Can learn ahead of the competition (Japanese auto firms) Disadvantages: Greater risk and uncertainty: Is there a market? (voice recognition software) Can we deliver a reliable product? (Dr. Love’s “windows”) Costs of developing (learning about) technology, market Apples “Lisa” failed (though it led to the Macintosh) 7 Technology followership Technology followership (“late to market”): Advantages: Less Risk and uncertainty About market characteristics About technology and manufacturing Can learn from leader’s market experience Imitate their strengths (e.g., Microsoft Windows)Imitate their strengths (e....
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BA310-3-5 Innovation Final - 1 BA 310 Innovation McCarter...

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