Innovation Management: Strategy and Business Policy

Innovation Management
Strategy and Business Policy

By Dilbar Gimranova, MBA, MPhil
Learning Objectives
• Innovation
• The context of innovation and the role of
the state
• Managing innovation within firms
• Riding the life cycle
Breakthrough ideas (HBR, 2005)
• The Velcro Organization (Joseph L.
Bower)
• Demand-Side innovation (Jeffrey F.
Rayport)
• Seek Validity, not Reliability (Roger L.
Martin)
• Biometrics Meets Services (Jochen Wirtz
and Loizos Heracleous)
• The Coming Crisis over Intellectual
Property Rights (Kenneth Lieberthal)
“not to innovate is to die” Christopher
Freeman
Not all firms innovate new products, but they

still seem to survive. Do they thrive?
Schumpeter (1934, 1939, 1942).

Competition posed by new products was
far more important than marginal changes
in the prices of existing products
• “Innovations could be associated with
waves of economic growth”. Marx
• Schumpeter, Kondratieff, Abernathy and
Utterback have argued the long-wave
theory of innovation
• “At the birth of any industrial sector there
is radical product innovation which is
followed by radical innovation in
production processes, followed, in turn, by
wide-spread incremental innovation”.
Abernathy and Utterback
• “listening to your customer may stifle
technological innovation and be
detrimental to long-term business success.
Hamel and Prahalad and Christensen
• “disruptive innovations” and “sustaining
innovations” Christensen
Overview of the innovation process
Firms operating Firms develop

Scientific and Creative knowledge,
technological functions
individuals processes and
developments and
products
inevitably lead to activities
knowledge inputs
Firms architecture
and external
linkages
Societal changes and market needs

lead to demands and opportunities
Definition
• Innovation is concerned with the commercial or
practical application of ideas or inventions
• Innovation = theoretical conception + technical

invention + commercial exploitation
• Innovation is the management of all the activities

involved in the process of idea generation,
technology development, manufacturing and
marketing of a new (or improved) product or
manufacturing process or equipment
Trajectories of Industry Change
Core activities
Threatened Not Threatened
Creative Change
Threatened
Radical Change
The industry is constantly
Everything's is up in the air
redeveloping assets and resources
Examples: overnight letter
Examples: the motion picture
Core assets
delivery carrier and

Industry, sports team ownership,
travel agencies
and investments banking
Progressive Change
Not Threatened
Intermediating Change Companies implement incremental

Relationships are fragile. testing and adapt to feedback.
Examples: automobile dealerships, Examples: online auctions,
investment brokerages, and commercial airlines,
auction houses and long-haul trucking
Innovation types
• Disruptive innovation
• Application Innovation
• Product Innovation
• Process Innovation
• Experiential Innovation
• Marketing Innovation
• Business Model Innovation
• Structural Innovation
Innovation as a management
process
External inputs: macro
factors; competition; profit;
growth; diversification;
costs and input prices;
political influences
Finance and business leadership

Re
Organisation’s knowledge
se
base accumulates
arc
knowledge
ha
over time
g
ti n
nd
External inputs: scientific
rke
tec
and technological
Ma
hn
External inputs: societal

development;
olo
needs; competitors;
competitors; suppliers;
gy
supplier partnerships;
customers; university
distributors; customers;
departments
strategic alliances
The role of the state in innovation
Financing Education and
Financing
R&D other
other societal
societal
R&D
effects
effects
Factor conditions
Competition
Purchaser regulation
Institutional
Innovative firm Customers
setting
Information and Environment

Suppliers and and
decision
decision centre
centre and safety
safety
Supporting regulation
political
political stability
stability industries
Macro-economic
Macro-economic Infrastructure
Infrastructure
conditions
conditions building
building
The Market Development Life
Cycle
Indefinitely Elastic Middle Period

Main Street
Main Street (Declining)
(Early)
Tornado Main Street
(Mature)
Bowling
Alley Fault Line!
The
Chasm End
Early Of Life
Revenue Growth
Market
Technology Adoption Life cycle

Time
Aligning Innovation with the Life
Cycle
Experiential Marketing
Innovation Innovation
Business
Model
Process Innovation
Innovation
Product
innovation Structural
Innovation
Application
Innovation
Disruptive
Revenue Growth
Innovation
Time
Choosing the Right Leader
Innovation Type Team’s Executive Best Team
Sponsor Leader
Disruptive General manager Entrepreneur
Application General manager Marketing manager
Product General manager Engineering
manager
Process VP for operations Operations manager
Experiential VP for marketing Customer service
manager
Marketing VP for marketing Marketing manager
Business model CEO General manager
Structural CEO General manager
Kondratieff waves of growth and
their main features
K1 K2 K3 K4 K5
Early Steam power Electrical and Fordism Information
mechanisation and railway heavy engineering and
communication
Economic activity
Prosperity
Recession
Recovery
Depression
1770s-80s 1830s-40s 1880s-90s 1930s-40s 1980s-90s

Innovation Management: Strategy and Business Policy

Uploaded by

Copyright:

Available Formats

Innovation Management: Strategy and Business Policy

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

Innovation Management: Strategy and Business Policy

Uploaded by

Copyright:

Available Formats

Innovation Management

Strategy and Business Policy

Not all firms innovate new products, but they

Schumpeter (1934, 1939, 1942).

Firms operating Firms develop

Societal changes and market needs

• Innovation = theoretical conception + technical

• Innovation is the management of all the activities

Threatened Not Threatened

delivery carrier and

Intermediating Change Companies implement incremental

Finance and business leadership

External inputs: scientific

External inputs: societal

Information and Environment

Indefinitely Elastic Middle Period

Technology Adoption Life cycle

1770s-80s 1830s-40s 1880s-90s 1930s-40s 1980s-90s

You might also like