CH 1 - Introduction

Slide 1.
Chapter 1
Innovation management:
an introduction
Paul Trott, Innovation Management and New Product Development, 4th Edition, © Pearson Education Limited 2008
Slide 1.2
Theories and models

of innovation management
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. Summary and review
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
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 1.5
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 1.6
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 1.7
Popular view of innovation:
The lone inventor/mad professor.
But, such views lead to misunderstanding. Science does

not equal innovation. Innovation is much more than
science, e.g. scientific discoveries pre-date commercial
products by many years.
Slide 1.8
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 1.9
Table showing the chronological

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

R&D. The market is a receptacle for the fruits
of 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 1.10
Linear models of innovation

management
Technology push
Research and Marketing

Manufacturing User
development
Market pull
Research and
Marketing Manufacturing User
development
Slide 1.11
Coupling model of innovation

management
Manufacturing
Research and
Marketing
development
Slide 1.12
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 1.13
Innovation management EXTERNAL INPUTS:

macro factors
framework ROI
costs;
competition.
Organisation and
business strategy
Organisation’s
knowledge base
Re
accumulates
se
ing
arc
knowledge
EXTERNAL INPUTS:
t
over
ha
rke
EXTERNAL INPUTS: societal needs;
time
nd
Ma
scientific and technological competitors;
tec
development; supplier partnerships;
competitors; hn distributors;
suppliers; olo
customers;
customers;
gy
strategic alliances.
university departments.
Source: Trott, 2005

New products
Slide 1.14
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 1.15
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
Useful references:
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.
Slide 1.16
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CH 1 - Introduction

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Slide 1.

Theories and models

• Innovation management is not exclusively

Product technology advantages

• Pfizer’s Sildenfil – aka Viagra:

• Gore Associates’ Gore-Tex:

• Dyson’s vacuum cleaner:

• Enterprise Resource Planning (ERP) business

Type of innovation Example

Popular view of innovation:

The lone inventor/mad professor.

But, such views lead to misunderstanding. Science does

Three key schools of thought:

1. Market-based view of innovation;

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

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

Creation of new knowledge Consumers express their

Science and Technological Needs of

Innovation management EXTERNAL INPUTS:

Source: Trott, 2005

Innovative firm Explanation for innovative capability

Explanations for innovative capability

Implications for developing

Thanks for listening

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