Ch#8 Innovation & New Product Strategy 2022
Ch#8 Innovation & New Product Strategy 2022
Ch#8 Innovation & New Product Strategy 2022
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2019 LiveWire Electric Motorcycle | Harley-Davidson USA
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https://www.bcg.com/publications/collections/most-innovative-
companies-2018.aspx
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* Personally How Innovative I am?
* Self assessment
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Original model of three phases of the process of
Technological Change
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April 8, 2018
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INNOVATION AND NEW PRODUCT STRATEGY
Source: “Managing Google’s Idea Factory,” BusinessWeek, October 3, 2005, 88-90. 8-21
FINDING CUSTOMER VALUE OPPORTUNITIES
1. New products
2. Improvements to existing
products
3. Improvements in production
processes
4. Improvements in supporting
services
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Customer
Expectations
Customer
Satisfaction Gap
OPPORTUNITIES
Actual
(1) New Products
Product (2) Improvements
Performance (3) New and Improved
Processes
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TRANSFORMATIONAL
Break-through innovation
Digital photography
NEW PRODUCT CATEGORY
Dell Printers
Nike Apparel
Golf clubs
LINE EXTENSION
New color/package/style
INCREMENTAL IMPROVEMENTS
Software updates
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The Evolution of the Creative Company
STEP 1
Technology and information become commoditized and globalized.
Suddenly, the advantage of making things “faster, cheaper, better” diminishes, and
profit margins decline.
STEP 2
With commoditization, core advantages can be shipped abroad.
Outsourcing to India, China, and Eastern Europe sends a growing share of
manufacturing and even the Knowledge Economy overseas.
STEP 3
Design Strategy begins to replace Six Sigma as a key organizing
principle. Design plays a key role in product differentiation, decision-making,
and understanding the consumer experience.
Source: Bruce Nussbaum, “How to Build Innovation Companies,” BusinessWeek, August 1, 2005, 62-63.
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STEP 4
Creative innovation becomes the key driver of growth.
Companies master new design thinking and metrics and create
products that address consumers’ unmet, and often unarticulated,
desires.
STEP 5
The successful Creative Corporation emerges, with new
Innovation DNA. Winners build a fast-moving culture that
routinely beats competitors because of a high success rate for
innovation.
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Characteristics of Successful Innovators
Creating an
Innovative Culture
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Creating an Innovation Culture
Source: Thomas D. Kuczmarski et al., “The Breakthrough Mindset,” Marketing Management, March/April 2003, 43.
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The Innovation Strategy Spells Out Management’s Priorities for
New Product Opportunities
Source: Robert Cooper, “Benchmarking New Product Performance,” European Management Journal, Feb. 1998, 1-7.
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NEW PRODUCT PLANNING PROCESS
Customer
Needs
Analysis
Screening
Business
Idea and
Analysis
Generation Evaluation
Marketing Product
Strategy Development
Development
Testing
Commercialization
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Achieving Cross-Functional
Interaction and Coordination
R&D
Operations Marketing
Finance
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Responsibility for New Product
Planning
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IDEA GENERATION
Creative Facilitating
Methods Lead User
Linking
Analysis
Marketing
and Technology
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An Innovation Champion
in Action at GE
Beth Comstock calls herself “a little bit of the crazy, wacky one” at corporate
headquarters. And it’s an apt description when you realize she works at General Electric
Co. Comstock, 44, is charged with transforming GE’s culture, famously devoted to
process, engineering, and financial controls, to one that’s more agile and creative.
Chairman and CEO Jeffrey R. Immelt tapped the former communications chief to become
GE’s first-ever chief marketing officer almost three years ago. The job came with a
critical twist: the goal of driving innovation through the company’s 300,000 plus ranks.
“Creativity is still a word we’re wrestling with,” Comstock concedes. “It seems a bit
undisciplined, a bit chaotic for a place like GE.” More comfortable territory is the term
“imaginative problem-solving” – encouraging people to think “what if” – yet always with
the aim of driving growth. One of Comstock’s first moves was to bring in anthropologists
to audit GE’s culture. They came back with praise for GE’s famous work ethic but noted
that employees wanted more “wow” – more discoveries from the company founded by
Thomas Edison.
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Comstock has a role whose importance is spreading throughout Big Business – that of
innovation champion. She began by studying the best practices at companies such as
Procter & Gamble, FedEx, and 3M. She brought in a raft of creativity consultants,
futurists, and design gurus to lead sessions with different operations. Their names were
jolting for GE types: Play, a Richmond (VA.) group that helps execs think differently, and
Jump, based in San Mateo, CA., which researches how people use things. GE is
expanding its army of designers to bring businesses closer to customers. And Comstock
is staging “dreaming sessions” where Immelt, senior execs, and customers debate future
market trends. Comstock concedes some managers view the workshops as a waste of
time. “We have a long way to go,” she says. But for GE, there’s no turning back.
Source: Bruce Hussbaum, “How to Build Creative Companies,” BusinessWeek, August, 2005, 77.
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SCREENING, EVALUATING, AND
BUSINESS ANALYSIS
IDEA GENERATION
SCREENING
(fit/feasibility)
CONCEPT EVALUATION
BUSINESS ANALYSIS
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Business Analysis
* Revenue Forecasts
* Cost Estimation
* Profit Projections
* Other Considerations
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PRODUCT AND PROCESS
DEVELOPMENT
NEW
PRODUCT
CONCEPT
PRODUCT MARKETING
DEVELOPMENT STRATEGY
AND USE DEVELOPMENT
TESTING
MARKET
TESTING
LAUNCH
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Product and Process Development
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Does it have the
required attributes?
Identify use
situations
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MARKETING STRATEGY AND MARKET TESTING
Market Target(s)
Marketing
Objectives
Program(s)
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