Business Strategies and Innovations Quiz

Product Innovation & New Product Development Strategies

• Innovation is producing, assimilating, and successfully exploiting novelties in economic and/or social contexts. This provides unprecedented solutions to problems and responds to societal needs.
• Innovation is both a process and a result.
• Innovation can be developed in product, process & logistics, marketing, and organizational/institutional contexts.

Types of Product Innovation

• Incremental: Adding new features to an existing product, through small changes, continuous improvements, and low risk. Examples include new versions of smartphones or cars.
• Disruptive: Addresses target market needs by developing entirely new concepts or significantly improving existing ones. It often involves exploring new technologies and is characterized by a high risk and uncertainty. Examples include streaming services, online distribution, and 3D printing.
• Radical: Significant transformative advances in technology, business, models, or processes. This results in substantial change within the industry or society. Examples include electric cars and photovoltaic panels.

Process

• Improving existing production methods or developing new ones. This often involves significant changes in product design and delivery methods.
• Traditional examples contrasted with innovations in specific industries as depicted in the text.

Marketing

• Applying new marketing methods: changing product design/packaging, positioning, communication, or pricing. Innovation can involve alterations to the 4Ps (product, price, place, promotion).

Organization/ Institutions

• Developing new management forms, structures, and systems to improve business efficiency.
• Creating and improving technical knowledge to enhance the sector's competitiveness. Innovations in this area are commonly driven by cluster companies, universities, and governments.

Core Initiatives

• Innovation is crucial for creating new products, with multiple possibilities for product improvement including modulation, price, packaging, design, and complements.

Modulations

• Adjustments or variations in fundamental product/service characteristics. This allows better adaptation to market segments and expands market size.

Price, Packaging, Design, Complements

• These are potential areas for product innovation, focusing on customer experience improvements and other functional characteristics.

Other Creative Techniques for Innovative Products

• Replacement: Replacing existing product components with new ideas, drawing inspiration, and minimizing residue/waste whenever possible. Examples include new coffee capsule designs and natural yogurt advancements.
• Combination: Adding new components to existing products or services without significantly modifying the original. Examples are time-tracking devices combined with a healthcare app.
• Exaggeration: Exaggerating product features or characteristics to make them more appealing and distinctive.
• Elimination: Removing components or features to simplify products, potentially reducing costs or improving focus. Examples include "stripped-down" versions of vehicles for reduced cost or improved fuel economy.
• Reordering: Changing the order or sequence of components in a product or service.

New Product Development: International Expansion Strategies

• Drivers for internalization include market saturation, falling markets, economic crises, Globalization, and increased demand abroad.
• International expansion decisions require careful consideration of standardization versus adaptation.
• Potential diversification risks include management, profit, and losses.
• Companies can grow by enhancing productivity, improving experiences, and increasing R&D+I.

Standardization vs. Adaptation

• Whether to standardize or adapt products to local markets depends on the product type.
• Standardization can lower costs and boost speed of international rollout.
• Adaptation to local needs is key to success in certain markets.
• Important factors to consider are cultural preferences and local regulations.

PESTEL Analysis for Internationalization

• PESTEL analysis is crucial for evaluating potential markets, taking into account political, economic, social, technological, environmental, and legal factors related to international markets. Analysis also factors in population growth rates.
• There are other factors to consider when entering new markets, including weather, climate policy, discrimination laws, and consumer pressures from pressure groups like non-governmental organizations (NGOs).

Ways to Enter International Markets

• Four main stages of entering international markets are indirect export, direct export, trade subsidiaries, and production subsidiaries, along with other possibilities such as joint ventures and licensing agreements.
• Each entry method has varying levels of control and risk.

Marketing Plan

• Four main stages of marketing plans include indirect export, direct export, trade subsidiaries, and others such as joint ventures and licensing agreements.
• Export strategies (indirect and direct) are explored.

Direct Export

• The advanced stage of internationalization where companies handle their own export management: licensing, customs, currency, and insurance.

Ways to Enter, Additional Options

• Export consortia, license agreements, franchising, and joint ventures are additional methods of international product launch.
• Licensing allows companies to utilize existing processes or goods, while franchising provides greater control over processes and operations.
• Joint ventures combine resources and expertise for shared ownership/profits.

Trade Subsidiary

• Establishing a local subsidiary provides complete control over processes and resources, but also involves significant investment.
• Reasons include handling local market expectations, transportation cost concerns, and adapting products.

Product and Business Termination Strategies

• Termination strategies for products or businesses include elimination, harvest, maintenance, and niche strategies.
• These strategies are employed based on market trends, and are selected in correspondence with company goals.

Imitation Strategies

• Studying how rivals react to your business's strategies is crucial.
• Copying, adaptation, and innovation are key considerations.
• Analyzing the advantages of imitation enables the creation of similar but improved versions of products.
• Techniques such as low-cost pricing, product improvements, superior marketing strategies are important considerations.

Superior Product

• Product improvement/innovation in response to market needs is a key factor.
• Product quality and suitability need to be superior to the original product.

Superior Marketing

• Creating marketing strategies that are better than competitors' marketing is crucial. Strategies for building an iconic brand, targeting niche segments, and using effective media channels are all important.

Divestment Strategy

• When maintaining a product isn't viable, companies may need to consider divesting.
• Revamping products is an option to revitalize or revitalize specific areas or products.
• Divestment can involve total removal from the market, partial removal, or selling the product/business to another company.