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Dr. Nivisha Singh IMT Ghaziabad

 Innovation described as a successful introduction of a new product, process, or
business model- is a powerful driver in the competitive process.

 The initial innovations such as the car, airplane, telephone, and the use of
electricity explain increasingly rapid technological diffusion and adoption.

 The speed of technology diffusion has accelerated further with the emergence of
the internet, social networking sites, and viral messaging.

Dr. Nivisha Singh IMT Ghaziabad 2

 Innovation Process

Imitation
Innovation

Invention

Idea

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 Idea- abstract concepts or as finding derived from basic research.

 Invention- transformation of an idea into a new product or process, or the

modification and recombination of existing ones.
 Patent
 Trade secret

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 Innovation- commercialization of any new product or process, or the modification
and recombination of existing ones.
 First-mover advantage

 Imitation- if an innovation is successful in the marketplace, competitors will

attempt to imitate it.

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 Entrepreneurship- describes the process through which change agents
(entrepreneurs) undertake economic risk to innovate- to create new products,
processes, and sometimes new organizations.

 Entrepreneurs innovate by commercializing ideas and inventions

 Are agents who introduce change into the competitive system.

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 Figure out how to use inventions, introduce new products or services, production
processes, and new forms of organization.

 Entrepreneurs can introduce change by starting new ventures or they can be found
within existing firms (intrapreneurs).

 This requires skill, commitment, and risk taking intensity.

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 Strategic entrepreneurship involve the exhibition of organizationally consequential
innovations that are adopted in the pursuit of competitive advantage.
 It can take one of five forms-
1. Strategic renewal
2. Sustained regeneration
3. Domain redefinition
4. Organizational rejuvenation, and
5. Business Model reconstruction

 Social entrepreneurship describes the pursuit of social goals while creating profitable
business. They evaluate the performance of their ventures not only by financial metrics
but also by ecological and social contribution (profits, planet, and people).

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Dr. Nivisha Singh IMT Ghaziabad

 How they are innovative?

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 How Innovation create value for potential
customers?

 How company will capture value from its

innovation?

 What type of innovation will allow company

to create and capture value and, how
resource allocation can be understood?

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 Radical Innovation
• Provide significant technological breakthrough and create new knowledge
• Are revolutionary and nonlinear in nature, typically use new technologies to serve newly
created markets.

• Radical innovations have strong potential to lead significant growth in revenue and profits.
These are rare because of the difficulty and risks involved in developing them.

• Examples: Personal computers

Airplanes

TV

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 Incremental Innovation

• Refers to simple changes or adjustments in existing products, services or processes.

• There is growing evidence that companies seeking to increase the payoff from innovation
investments best do so by focusing on incremental innovations.

• A major drive of incremental innovation in many companies has come from programs
aimed at continuous improvement, cost reduction, and quality management.

• Example: Gillette
Diet Coke

Toyota- Process innovation

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 Architectural Innovation

 A new product in which known components, based on existing technologies, are

reconfigured in a novel way to attack new market.

 The core components of the product remain the same, but the relationship

between these components and how they link to one another, changes

 Examples: Canon and Xerox

Smart Watch- existing cell phone technology repackaged into a watch

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 Disruptive Innovation

•A disruptive innovation creates substantial growth by offering a new performance

trajectory that, even if initially inferior to the performance of existing technologies, has
the potential to become markedly superior.

• This superior performance can produce spectacular growth, either by creating new sets
of customers or by undercutting the cost base of rival business models.

• Example: Cassettes to CDs

LED bulbs

Amazon’s online book store

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1. Continue to innovate in order to stay ahead of the competition

2. Guard against disruptive innovation by protecting the low end of the market

3. Disrupt yourself, rather than wait for other to disrupt you

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 LIFE CYCLE STAGES
Introduction Growth Shakeout Maturity Decline
Core • R&D, • R&D, • Manufacturing • Manufacturing • Manufacturing
Competency • some • some • process • process • process
Marketing manufacturing engineering engineering, engineering,
marketing • marketing • marketing,
service

Type and • Product • Product After emergence • Product Product & process
level of innovation of a innovation of standard: innovation at a innovation ceased
Innovation maximum; decreasing; • product minimum;
• process • process innovation • process
innovation at a innovation decreasing innovation at a
minimum increasing rapidly; maximum
• process
innovation
increasing
rapidly
Market Slow High Moderate and None to moderate Negative
Growth slowing down
Market Size Small Moderate Large Largest Small to moderate
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Price High Falling Moderate Low Low to high
 LIFE CYCLE STAGES
Introduction Growth Shakeout Maturity Decline
Number of Few, if any Many Fewer Moderate, but Few, if any
Competitors large
Mode of Non-price Non-price Shifting from Price Price or non-
Competition competition competition non-price to price
price competition
competition

Type of Buyers Technology Early adopters Early majority Late majority Laggards
enthusiasts
Business-level Differentiation Differentiation Differentiation, or Cost-leadership Cost-leadership,
Strategy integration or integration differentiation, or
strategy strategy integration
strategy

Strategic Achieving Staking out a Surviving by Maintaining Exit, harvest,

Objective market strong strategic drawing on strong strategic maintain, or
acceptance position: “deep pockets” position consolidate
generating
“deep pockets” 21
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