Chapter 2:

n o i t a v o n In t n e m e g a Ma n 2 0 2 0 1 B B W

INNOVATION TYPES AND PRODUCT CLASSES

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Innovation nt Manageme WBB10202

2.1 Form of Innovation

Product Product

The 4Ps of innovation

Process Process

Paradig Paradig m m

Position Position

Innovation nt Manageme WBB10202

2.1 Form of Innovation

Product innovation changes in the things (products/services) which an organization offers Example: a new design of car, a new insurance package

Innovation nt Manageme WBB10202

2.1 Form of Innovation

Process innovation changes in the ways in which things (products/ services) are created and delivered; Example: change in manufacturing methods and equipment used to produce the car

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2.1 Form of Innovation

Position innovation changes in the context in which the products/services are introduced Example: Johnson & Johnson change the product positioning not just for babies but also to adult.

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2.1 Form of Innovation

Paradigm innovation changes in the underlying mental models which frame what the organisation does Example: shift to low-cost airlines the provision of online insurance and other financial services

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Types of Innovation Incremental Radical Modular Architectural

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a) Incremental Innovation

modification, refinement,
simplification, consolidation, and enhancement of existing products, processes, services, and production and distribution activities.

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a) Incremental Innovation

Examples The many versions of Sony's Walkmannot the original but all the models that followed and were built on a common platform. Most automobiles, with annual minor improvements that over years provided significant benefits in safety, efficiency, and user comforts.

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b) Radical Innovation

introducing new products or

services that develop into major new businesses or spawn new industries, or that cause significant change in a whole industry and tend to create new values.

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b) Radical Innovation

Examples Computer industry

from kilobytes to gigabits and more.

Banking
ATM machines, funds available just
about anyplace in the world with the appropriate plastic card electronic banking-some

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c) Modular Innovation

does not involve a whole new

design. involve new or at least significantly different component.

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d) Architectural Innovation

reconfigures a system of components

that constitute a product, process, or service. Design components are linked together in a new way using many core design concepts in a new architecture. requires knowledge about the components and how they are linked.

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d) Architectural Innovation

Examples: The transistor as a replacement for the vacuum tube.

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d) Architectural Innovation

Examples: Material substitutions, such as plastics replacing steel and aluminium.

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Innovation nt Manageme WBB10202

2.2 Product Classification

Improvement to a current product

or class of products Novel replacement product New-to-the-market product Breakthrough product Me-too product

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Improvement to a current product or class of products

These improvements sustain the

organization even though all have a limited life cycle. must be more than cosmetic. provide a defined benefit to the user but not necessarily be classified as innovative.

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Improvement to a current product or class of products

Examples Copiers. Consider the enhancements to copiers, from the slow single-page copier to collators, staplers, size reduction and expansion, and color copiers.

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Novel replacement product

A novel replacement product serves

the same purpose as a current product and may include some enhanced features.

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Novel replacement product

Example:

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New-to-the-market product

difficult to find new-to-the-market

products in most established organizations. An invention

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New-to-the-market product

Examples Optical disks 3M's Post-it Notes Computer-aided tomography (CAT scanners) Nuclear magnetic resonance imaging (MRI scanners) Industrial robots

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Breakthrough product

"Breakthrough" means coming up

with something new - something that has not been achieved up until now. involves both technology and markets.

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Breakthrough product

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Me-too product

a product introduced into the market

in direct competition with one already in the marketplace. It may not provide new features or advantages but it is introduced in direct competition with an existing product.

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Me-too product

this is not a very good strategy

unless significant benefits can be clearly identified. Pursuing the me-too approach does not provide for long-term organizational growth.