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What is it?
…concerned with the new or the novel.
Is innovation technology based? Many of the more
significant innovations of the 20th century are
organizational rather than technology based.
Time
Pro
fita
bili
ty
Disruptive
Innovation
Application
Innovation
Product
Innovation
Process
Innovation
Marketing
Innovation Business
Model
Innovation Structural
Innovation
Different types of Innovation give greater
profitability at different points in the life cycle of
a product family
New product
invention, tailoring,
and development
1.Product Line Based:
A)New-to-the –world Products
B)Line Extensions
C)Me-too products
D)Products Modifications
Genuine uncertainty
› It’s not going to happen – certainly not now
Cannibalization
› It will compete with our current products
Shifts in the customer base
› Our current customers don’t want it
Margin erosion
› It will make less money
Performance
Time
Who buys a technology
when it is first
introduced?
New technologies sell to:
- New customers
- With new needs
- Often at lower margins
Dynamically continuous innovation:A pronounced modification to an existing product› Requires a *moderate* amount of learning or
behavior change
› Convergence:The coming together of two or more technologies to create a new system with greater benefits than its parts
“ Disruptive innovation theory points to situations
in which new organizations can use relatively
simple, convenient, low-cost innovations to
create growth and triumph over powerful
incumbents.”
Sustaining versus Disruptive Innovation
Markets that don’t exist can’t be analyzed
The experts, including you, will be wrong
Don’t invest all your resources on the first effort — beta release
Discovery, not implementation, based planning
Markets that don’t exist can’t be analyzed
The experts, including you, will be wrong
Don’t invest all your resources on the first effort — beta release
Discovery, not implementation, based planning
Bring a difference value proposition to the
market
Initially under perform established products in
mainstream market
But, the products improve at a rapid rate
Superior in ways that are not valued by the
established market — more reliable, easier to
use, or cheaper
Paper LibraryCollections Paper
Bib Control Paper
Automated
LibraryCollections Paper
Bib Control Electronic
Electronic
LibraryCollections Digital
Bib Control Digital
1965-1995 1995-date
Paper LibraryCollections Paper
Bib Control Paper
Automated
LibraryCollections Paper
Bib Control Electronic
Electronic
LibraryCollections Digital
Bib Control Digital
1965-1995 1995-date
Sustaining
Innovations
Many
Disruptive
Innovations
Browsing — requires prior arrangement, you
are putting things (usually books) in order on a
shelf
Problems
› Mind reading — guess what the user is thinking
› Fortune telling — make predictions about the future
Searching —
› “the only group that can categorize everything is
everybody”
› “One reason Google was adopted so quickly when it
came along is that Google understood there is no
shelf… Google can decide what goes with what after
hearing form the user.”
“The Web has an editor, it’s everybody. In a
world where publishing is expensive, the act of
publishing is also a statement of quality — the
filter comes before publication. In a world
where publishing is cheap, putting something
out there says nothing about quality. It’s what
happens after it gets published that matters. If
people don’t point to it, other people won’t read
it.”
Google versus traditional bibliographic control
Open Archives/Repositories versus journals
(and soon monographs?)
Google Book Project, Open Content Alliance
versus library collections
Reference librarians versus Yahoo/Google
Answers
New Product Development Process
Opportunity Identification
Design
Testing
Introduction
Life-cycle Management
Evaluate at each
stage to determine
whether to proceed.
Key is to manage
risk of introducing a
failure or not
introducing a
success.
Proactive vs. Reactive
Go/No Go
Go/No Go
Go/No Go
Go/No Go
Success Rate Entirely New Products
3000 raw
ideas
.03%
300 submitted
ideas
.3%
125 beginning
projects
.8%
9 large
developments
11%
4 major
developments
25%
1.7 launches
60%
1 commercial
success
Decreasing knowledge of the technology
Decre
asin
g k
no
wle
dg
e o
f th
e m
ark
et
Familiar New , familiar New , unfamiliarFam
ilia
r
N
ew
, fa
milia
r N
ew
, u
nfa
milia
r
Decreasing knowledge of the technologyDe
cre
as
ing
kn
ow
led
ge
of
the
ma
rke
t
Market
Penetration
Market
Extension
Market
Expansion
Product
Extension
Business
Extension
Business
ExpansionNew Business
Model
Business
Expansion
Product
Expansion
Market
Penetration
Market
Extension
Market
Expansion
Product
Extension
Business
Extension
Business
Expansion
New Business
Model
Business
Expansion
Product
Expansion
Probability of
Success
New Product with
unrelated technology in
existing market: 50%
Market
Penetration
Market
Extension
Market
Expansion
Product
Extension
Business
Extension
Business
Expansion
New Business
Model
Business
Expansion
Product
Expansion
Probability of
Success
Existing product in a new
market: 15%
Market
Penetration
Market
Extension
Market
Expansion
Product
Extension
Business
Extension
Business
Expansion
New Business
Model
Business
Expansion
Product
Expansion
Improved product in
existing market: 75%
Market
Penetration
Market
Extension
Market
Expansion
Product
Extension
Business
Extension
Business
Expansion
New Business
Model
Business
Expansion
Product
Expansion
Probability of
Success
New Product in a New
Market: 5%
A company cannot rest on its laurels; many
product class winners have fallen victim to
their success
US Steel (steel)
ICI (chemicals)
Kodak (photography)
Goodyear (tires)
Polaroid (instant photography)
Zenith (TVs)
IBM (PCs)
Smith-Corona (typewriters)
The right product is one that becomes available at
the right time (i.e., when the market needs it), and
is better and/or less expensive that its competition.
To have the right product, therefore, one must:
Predict a market need
Envisage a product whose performance and
capability will meet that need
Develop the product to the appropriate time
scale and produce it.
Sell the product at the right price
There are, unfortunately, many examples of potentially innovative space products being developed at the wrong time, at the wrong price point, or due to poor market predictions: TV-SAT and TDF-SAT: Performance wrong (few high power
transponders when many medium/low power were needed)
OLYMPUS: Too soon (large busses only started to become needed some years later)
IRIDIUM and GLOBALSTAR: Wrong market and/or too late (development of GSM took away most of the market)
AIRPHONE: Too expensive
CONCLUSION? Introduce only Productive Innovation
OTHER POSSIBILITIES???
Battery Powered Battery Charger?
Braille TV Guide?
Fireproof Matches?
Solar Powered Flashlight?
Sugar coated Insulin btablet?
.....