Inno MGT Intro UNIT 1

Innovation Management
an introduction
Slide 1.2
Contents
1. Introduction
2. Product and process innovations
3. Typology of innovations
4. Different schools of thought
5. Models of understanding of innovation management
6. Implications for developing products and services
7. Push & Pull strategy
8. Summary and review
Paul Trott, Innovation Management and New Product Development, 4th Edition, © Pearson Education Limited 2008
Slide 1.3
Introduction
• Innovation management is not exclusively

associated with products
• New ways of doing business in service sector
• Innovation management involves change,
particularly technological change
• Sometimes this involves product, service and
process changes
• The level of change is an important dimension
Slide 1.4
Slide 1.5
Slide 1.6
Slide 1.7
VRIO - Framework of Analysis

1. Value: Does it provide customer value and
competitive advantage?
2. Rareness: Do no other competitors possess
it?
3. Imitability: Is it costly for others to imitate?
4. Organization: Is the firm organized to
exploit the resource?
Copyright © 2015 Pearson Education,

Inc. 4th Edition, © Pearson Education Limited 20085-7
Paul Trott, Innovation Management and New Product Development,
Slide 1.8
Slide 1.9
Typology of innovations
Type of innovation Example

Product innovation The development of a new or improved product
Process innovation The development of a new manufacturing
process such as Pilkington’s float glass process
Organisational innovation A new venture division, a new internal
communication system;
Management innovation TQM (total quality management) systems, BPR
(business process re-engineering); introduction of
SAPR3
Production innovations Quality circles, JIT manufacturing system, new
production planning software, e.g. MRP II, new
inspection system
Commercial/marketing innovations New financing arrangements, new sales
approach, e.g. direct marketing
Service innovations ebay; Internet banking, etc.
Slide 1.10
Slide 1.11
Product technology advantages
• Pfizer’s Sildenfil – aka Viagra:

The fastest selling human drug
• Gore Associates’ Gore-Tex:
the versatile polymer polytetrafluoroethylene
(PTFE)
• Dyson’s vacuum cleaner:
Revolutionised a very stable mature industry
Slide 1.12
Process technologies
• Enterprise Resource Planning (ERP) business
software; virtually all large firms have installed it.
• SAP, Oracle, Baan and PeopleSoft.
• SAP has over 20,000 products installed worldwide
and Oracle has installed databases
in nearly every one of the world’s top 500
companies.
• Moreover, it has changed the way they work
(Gartner, 2002).
Slide 1.13
Three key schools of thought:
1. Market-based view of innovation;

market conditions provide the context which facilitate
or constrain the extent of firm innovation activity
(Slater & Narver, 1994; Porter, 1980, 1985).
2. Resource-based view of the firm; a firm’s own resources

provide a much more stable context in which to develop
its innovation activity, and to shape its markets in
accordance to its own view (Tidd et al., 2001; Shavinina,
L.V. (ed.) (2003); Patel, P. and Pavitt, K. 2000).
3. Serendipity
Innovation is all due to luck and good fortune
Slide 1.14
Characteristics of Innovation
 Product Axis
 Process Axis
 Management Axis
Slide 1.15
 Product and Service Innovation. The firm can

develop innovative products and services to
differentiate itself from the competition.
 This is the most common type of innovation

and the most obvious to the consumer.
 Product innovation ranges from the newest

consumer product to the new banking
product.
Slide 1.16
Product Axis
 Market demand
 Level of resonance
 Optimal use of existing condition
 Price / Value
 Compliance with regulations
 Originality
 Offer to improvements
 Coverage of operational needs
 Aesthetic
Slide 1.17
 Examples;
 Apple product lines of first to market products such as music
players, tablets and phones revolutionized and created the
market.
 JP Morgan Chase, offers “Chase Private Client” where banking

clients are offered access to the investment bank research
and capabilities.
Slide 1.18
Process Axis
 Market research
 Connection to target customers
 Access to new technology
 Costing methodology
 Compliance to regulations
 Techniques of idea development
 Improvement techniques
 Emphasis on fulfilling operational needs
 Focus on aesthetics in design
 Formal procedures to copyright
Slide 1.19
Process Innovation
The firm can develop innovation around manufacturing processes and its
supply chain to create value for its shareholders.
In commodity and in heavy investment industries business process innovation

is a requirement to be competitive.
Examples: Toyota and its production system is one of the most innovative
approaches to manufacturing. This process innovation has allowed Toyota to
have the most efficiency facilities.
Boeing is the top innovator in supply chain and complexity management.

Components such as wings, fuselage components, are manufactured globally
with final assembly in the US.

Slide 1.20
Management Axis
 Feasibility study
 Formal procedures to ensure communication
with customers
 Formal procedures to apply best technology
 Cost control
 Quality control
 Organizational culture
 Quantitative controls on input / process
 Marketing & quality control processes
 Formal control to copyright
Slide 1.21
Table showing the chronological

development of models of innovation
1950/60s Technology push Simple linear sequential process. Emphasis on

R&D.
1970s Market-pull Simple linear sequential process. Emphasis on

marketing. The market is the source for
directing R&D. R&D has a reactive role.
1980s Coupling model Sequential, but with feedback loops.

Combinations of push and pull.
1980/90s Interactive model Emphasis on integrating R&D and marketing.

1990s/00 Network models Emphasis on external linkages
Slide 1.22
Linear models of innovation

management
Technology push
Research and Marketing

Manufacturing User
development
Market pull
Research and
Marketing Manufacturing User
development
Slide 1.23
Coupling model of innovation

management
Manufacturing
Research and
Marketing
development
Slide 1.24
Coupling Model
The model suggests that it is the result of the simultaneous

coupling of the knowledge within all three functions that
will foster innovation.
Interactive Model
The model develops the above idea and links together the
technology-push and market-pull models. It emphasizes that
innovations occur as the result of the interaction of the
market place, the science base and the organization’s
capabilities.
Slide 1.25
Conceptual framework
Creation of new knowledge Consumers express their

Technology development-
dominated by universities and needs and wants through
dominated by organisations
large science-based organisations the consumption of products
Science and Technological Needs of

technology base developments the market
Slide 1.26
Innovation management EXTERNAL INPUTS:

macro factors
framework ROI
costs;
competition.
Organisation and
business strategy
Organisation’s
Re
knowledge base
accumulates
sea
ting
knowledge
r ch
over EXTERNAL INPUTS:
rk e
EXTERNAL INPUTS:
an
time societal needs;
Ma
scientific and technological
dt
competitors;
development;
competitors; ec supplier partnerships;
hn distributors;
suppliers; olo
gy customers;
customers; strategic alliances.
university departments.
Source: Trott, 2005

New products
Slide 1.27
Management Framework
a) A response to either a need or an opportunity
b) A creative effort that if successful results in the

introduction of novelty
c) The need for further changes
Slide 1.28
Innovative firm Explanation for innovative capability

Apple Innovative chief executive
Google Scientific freedom for employees
Samsung Speed of product development
Procter & Gamble Utilisation of external sources of technology
IBM Share patents with collaborators
BMW Design
Starbucks In-depth understanding of customers and their cultures
Toyota Close co-operation with suppliers
Explanations for innovative capability

Slide 1.29
Implications for developing

products and services
• Role of the market is important
• Role of technology is important
• It’s a cross functional process
• Role of external linkages and networks are important
• Skills and knowledge are acquired over time and firms
develop competencies
Slide 1.30
Any questions?
Slide 1.31
References
 Scott Shane, CWR university press release.
 Patel, P. and Pavitt, K. (2000) ‘How technological
competencies help define the core (not the boundaries)
of the firm’, in
 Dosi, G., Nelson, R. and Winter, S. G. (eds) The Nature
and Dynamics of Organisational Capabilities, Oxford
University Press, Oxford.
 Shavinina, L.V. ( ed.) (2003) The international handbook
on Innovation, Pergamon, Oxford.
 Tidd, J., Bessant, J. and Pavitt, K. (2001) Managing
Innovation, 2nd edn, John Wiley & Sons, Chichester.

Inno MGT Intro UNIT 1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Inno MGT Intro UNIT 1

Uploaded by

Copyright:

Available Formats

Innovation Management

• Innovation management is not exclusively

VRIO - Framework of Analysis

Copyright © 2015 Pearson Education,

Type of innovation Example

Product technology advantages

• Pfizer’s Sildenfil – aka Viagra:

Three key schools of thought:

1. Market-based view of innovation;

2. Resource-based view of the firm; a firm’s own resources

 Product and Service Innovation. The firm can

 This is the most common type of innovation

 Product innovation ranges from the newest

 JP Morgan Chase, offers “Chase Private Client” where banking

In commodity and in heavy investment industries business process innovation

Boeing is the top innovator in supply chain and complexity management.

Table showing the chronological

1950/60s Technology push Simple linear sequential process. Emphasis on

1970s Market-pull Simple linear sequential process. Emphasis on

1980s Coupling model Sequential, but with feedback loops.

1980/90s Interactive model Emphasis on integrating R&D and marketing.

Linear models of innovation

Research and Marketing

Coupling model of innovation

The model suggests that it is the result of the simultaneous

Creation of new knowledge Consumers express their

Science and Technological Needs of

Innovation management EXTERNAL INPUTS:

Source: Trott, 2005

a) A response to either a need or an opportunity

b) A creative effort that if successful results in the

c) The need for further changes

Innovative firm Explanation for innovative capability

Explanations for innovative capability

Implications for developing

You might also like