INNOVATION AXES

Market Manufacturing Technology (Process) Product Technology Product

MEDINOL

Market Driven Innovation Market Manufacturing Technology Product Technology Product

Generations of Products Picture 8.1: First Generation Picture 8.2: Second Generation Picture 8.3: Third Generation

PHASE I Market Driven Innovation Manufacturing Technology Drip Technology Drippers

PHASE II Manufacturing Technology Drip Technology Drippers Product Driven Innovation

PHASE III Market Driven Innovation Growth Control Manufacturing Technology Technologies Drip, Liquid Fertilizers Polymer, Control Feeding System

Market Manufacturing Technology Product Technology Technology Driven Innovation Product Product Driven Innovation

DISC O TECH

Fixion ™ IM (Intramedullary) Nail Fixion ™ IL (Interlocking) Nail

DISC O TECH

THE B-TWIN EXPANDABLE SPINAL SYSTEM

B-Twin Reduced Configuration (5 mm diameter) B-Twin Expanded Configuration (up to 15 mm diameter) Post-Operative (after expansion) Anterior-Posterior View

Market Driven Innovation Product Driven Innovation Technology Driven Innovation

Corning Glass Fiber optics Apple IBM PC 3 M Post it Seagate-Conner 3.5 HDD Sony-Philips Compact Disk Nike : Tc: nylon, Tn: Max Air, Max chock Raytheon Microwave Laser, Bell Labs

Manufacturing Driven Innovation

IKEA – LACK table and Honeycomb, Ogla and

WHY CONTINUOUS/DISCONTINUOUS INNOVATION?

Continuous Innovation

• Existing infrastructures • Existing knowledge • Existing markets • Incremental • Convergent thinking progressive refinements • Increasing specialization

Discontinuous Innovation

• Discovery of new knowledge related to market need or technological capabilities • From horse to car • Business reshaping: kerosene for lighting; ice for cooling; IT+telecom and airline, banking, entertainment

PRINCIPLES OF DISRUPTIVE TECHNOLOGY

Good Management is the reason that companies fail because they listened to customers wants and needs , invested in technology to support customers and subsequently lost market leadership (Christensen,1997) • Companies depend on customers and investors.

• Small market don’t solve problems of large firms. • Market that don\t exist cannot be analyzed • Technology supply may not equal market demand • Disruptive technologies are lower performing • Companies overshoot their market with technology • IBM survived the move to PC’s • More experienced firms made better decisions

SOURCES OF DISCONTINUITY

New market New technology New political rules Running out of road Change in market-behavior Deregulation Rules of the game change Architectural innovation PC, Mobile phone Photo and digital images Free trade, Communism Kodak Apple, McDonalds Telecom, airlines Amazon, cell phone Photo-lithography in chip

CELL PHONES FORECASTING FOR AT&T

Cell phone quantity 17 Millions 900,000 1984 1994 2000 Time

R&D GENERATIONS

1 st Generation

: • Unbounded search for scientific breakthrough • Leap from current to new knowledge • Breakthrough inventions

2nd Generation

• Applicability • Project management • Fusion innovations

R&D GENERATIONS

3th R&D Generation

• Marketing role: determine customer needs • R&D role: supplies technology • Continuous innovation: experience, expectations walls Fig. 1.7

4th R&D Generation

• Mutually dependent learning • Market evolution: Competitive architecture • Broader mission for R&D • Organizational capability • Fusion & Discontinuous Innovation: beyond the walls. Fig. 1.8, 1.9, 1.10

3

rd

GENERATION & CONTINUOUS INNOVATION

Market Knowledge Wall of Experience Continuous Innovation

Pc, Mc, Tc

Wall of Expectations Scientific & Technical Knowledge

DISCONTINUOUS INNOVATION

Market Knowledge

Mn, Tc Mn Tn

Wall of Experience

McTn

Wall of Expectations

Pc Tc Mc

Scientific & Technical Knowledge

FUSION INNOVATION

Market Knowledge Market Fusion Market & Technology Fusion Wall of Experience Technology Fusion Wall of Expectations Scientific & Technical Knowledge

MARKET & TECHNOLOGY FUSION

Market Fusion

• Milk + Juice Drinks • Cheese + others for breakfast • Printer+ Scanner+Fax for new applications • Telephone + TV • Cell phone + Portable Computer

Technology Fusion

• Optics-Electronics Microscope • Fiber optic + laser • Laser + Audio • Composite Materials

Market Knowledge Target zone: new technology, latent need

Wall of Experience Wall of Expectations

Scientific & Technical Knowledge

PERFORMANCE IMPROVEMENT INDUSTRY VERSUS CUSTOMER

Product performance B High-end markets

Trajectories – customer needs performance

Disruptive technology A Low-end markets Time

DISCONTINUOUS INNOVATION AND BUSINESS STRATEGY

Nokia forest eqpt-paper Vodaphone steel tubes Tui mining Kodak Palm Cell phone,to morrow?

Cell phone services Travel group (Thomson)

PC- DISRUPTIVE TECHNOLOGY

EVOLUTIONARY THEORY

Nelson and Winter: The core concern of evolutionary theory is with the dynamic process by which firm behavior patterns and market outcomes are jointly determined over time

Theory of dominant design

Single basic architecture that becomes the accepted market standard (Anderson-Tushman)

Punctuated Equilibrium

Periods of of incremental change, punctuated by breakthrough • New comers initiate competence • Major tech innovations • Competitive turmoil • Boeing 247, 707, 747

Jolty theory of change

Abrupt alterations in environments

Disruptive Technology

Source: Ettlie J.E.(2006)

Managing Innovation

Elsevier p 70-84

Source: Tidd J. Bessant J. Pavitt K.(2006)

Managing Innovation, John Wiley and Sons

p 173

THE CORE COMPETENCE OF THE CORPORATION

CK Perahalad G/ Hamel

END PRODUCTS BUSINESS UNITS CORE PRODUCTS COMPETENCIES

INNOVATION STRATEGIES

• Miles & Snow(78) Defenders, Prospectors, Analyzers • Freeman(82) Offensive, Defensive, Imitative, Dependent, Traditional Opportunistic • Ettlie and Bridges(87) Aggressive technology policy Long term investment in technological solution Planning human resources for it Openness the environment Structural adaptation • Kerin et al (92) First movers Ettlie J.E.(2006)

Managing Innovation

Elsevier p 111-114

THE AGGREGATE PROJECT PLANNING FRAMEWORK

Technology change

Radical

Breakthrough

Next generation

Platform

Improvement Base

Derivative Product support Impact on Market

New market New Customer More sales Replace current product

LINEAR MODELS OF INNOVATION Technology Push

Starting Point

Science and Technological Needs of the Technology Developments Market Marketing

R&D

Market Manufacturing

Starting Point

Market(ing) ? Pull

Market Scientific Knowledge Technology Concept Product Development Production

MARKETING PULL-TECHNOLOGY PUSH MP: New market services and goods that seek new technology TP: New ideas in technology that seek applications System Technology Map: Robot

Technology Push Marketing Pull

Manipulation & Control Automobile Sensing: Vision, Tactile Aerospace Internal Communication Electronics Environment Communication

TECHNOLOGY PUSH NEED PULL COMPARED

Technology push

• Start with what easily can be researched • Address the need of the atypical user • Get locked into one technical solution

Need Pull

• Looks at needs that are easily identified • Continue to change the definition of the opportunity • Lack a champion a true believer

SIMULTANEOUS COUPLING MODEL

Manufacturing Marketing R&D

An Overview of Innovation in Landau and Rosenberg (Eds )The Positive Sum Strategy Washington DC National Academy of Sciences

Idea

INTERACTIVE MODEL OF INNOVATION

Scientific & Technological Knowledge Technology Push Product R&D Manufacturing Marketing Innovation Market Marketing Pull Market Knowledge

NETWORK MODEL

Freeman C. (1992) Network of Innovators, a synthesis of research issues in Freeman C,

The Economics of Hope

London Pinter 93-120

R&D Marketing Finance

Internal Environment External Environment

Production

Tidd J. Bessant J

Managing innovation

John Wiley 2006 p 287

Tidd J. Bessant J

Managing innovation

John Wiley 2006 p 304

Tidd J. Bessant J

Managing innovation

John Wiley 2006 p 338

TECHNOLOGY POLICY AND COMPETITIVE STRATEGIES

Cost leadership Differentiation Focus segment Cost –diff

Product technology change Reduce cost, efficiency Quality, features Design performance Process technology change Economies of scale Quality, faster Tune production delivery Porter M.E. “The Technological Dimension of Competitive Strategy”

Research on Technological Innovation Management and Policy 1 (1983) pp 1-33

THE INNOVATION MAP

M Mn Mc Mfn Mfc Mf The Firm/ Product P T Tc Tn

INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT

Pc Pn

KNOWLEDGE AXES AND GATE KEEPERS

`

Mn Mfn M Mc Mfc Mf T P Pc Tc

INTERNAL ENVIRONMENT

Tn

EXTERNAL ENVIRONMENT

Gate Keeper Knowledge axis Pn

PHASES IN MARKET LIFE CYCLE AND INNOVATION BASIS OF COMPETITION

Sales Functionality Reliability Convenience Price Early Growth Mature Time

3000 MB

DISK DRIVE PERFORMANCE MET MARKET NEEDS

14 inch 200 Mainframe Capacity Provided 30 8 inch 5.25inch

3.5inch

Capacity Demanded 10 6 A HDD invade to minicomputer B HDD invade to PC C HDD invade to Portable Computer 74 78 80 85 90 Source: Christiansen p16

TIME OF ADOPTION OF INNOVATION (

Roberts)

TECHNOLOGY ADOPTION LIFE CYCLE Innovators Early Early Majority Late Majority Laggards Adopters

2.5% 13.5% 34% 34% 16% Visionary Pragmatist Conservative