Industry Trends and Innovation (Module 1)

• Industry Trends and Innovation (Module 1)

Fad

• A product, service, or idea with brief popularity that quickly fades.
• Unlike trends, fads actively seek publicity.
• Fads are unpredictable and typically involve high risks.

Trends

• Phenomenon or pattern influencing a company, industry, or market’s future.
• Trends stem from consumer needs and lifestyle changes.
• Factors include shifts in the global economy, spending habits, technology adoption, and social behavior.

Innovation

• Actions that create new ideas, processes, or products with positive changes.
• Creates new value.
• Transforms ideas into practical reality.
• Not a quick fix for company success.

Importance of Innovation

• Allows businesses to adapt to changing conditions.
• Fosters growth, avoiding the negative impacts of stagnation.
• Distinguishes businesses from competitors.

Elements of Innovation

• Challenge ("Pull")
• Customer Focus ("Push")
• Creativity ("Brain")
• Communication ("Life blood")
• Collaboration ("Heart")
• Completion ("Muscle")
• Contemplation ("Ladder")
• Culture (Playing field of innovation)
• Context: Interaction shaped

Forms of Innovation

• Process

• Products or Services

• Management and Work Organization

• Framework and Industry Innovation (Module 2)

Trend analysis

• Statistical approach to identifying patterns or changes in data over time.
• Helps predict future business dynamics and inform decision-making.

PESTLE Analysis

• Analytical tool analyzing external factors impacting an organization.
• Originally ETPS (Economic, Technological, Political, Social) from Francis Aguilar
• Developed in the 1980s to PESTLE
• A component of strategic planning repeated regularly, with a minimum of every 6 months.

PESTLE Breakdown

• P - Political: Government intervention in the economy (e.g., regulation of competition, industry regulation).
• E - Economic: Factors impacting business operations and profitability (e.g., interest rates, consumer confidence, exchange rates).
• S - Social: Shared beliefs and attitudes of the population (e.g., changing demographics, impact of pressure groups, consumer trends).
• T - Technological: Ways of conducting business, including new methods of production, distribution, and communication.
• L - Legal: What businesses need to know to trade successfully.
• E - Environmental: Importance of raw materials, pollution targets, ethical and sustainable practices, and carbon emissions.

Advantages of PESTLE Analysis

• Helps identify trading opportunities and potential threats.
• Supports well-informed decision-making.

PESTLE Analysis Steps

• Prepare your analysis
• Collect data
• Complete a PESTLE diagram
• Interpret and evaluate results
• Put together an action plan
• Review and monitor external signals

SWOT Analysis

• A framework for identifying and analyzing an organization's strengths, weaknesses, opportunities, and threats.
• Increases awareness for business decisions or strategies.
• Credited to Albert Humphrey
• Strengthens decision-making

Elements of a SWOT Analysis

• Strengths: What an organization does well and what separates it from competitors.
• Weaknesses: Factors preventing optimal performance.
• Opportunities: Favorable external factors for a competitive advantage.
• Threats: Factors that could harm an organization.

SWOT Matrix

• Organizes items identified in each element in a four-quadrant square.

How to Conduct a SWOT Analysis

• Determine objective
• Gather resources
• Compile ideas
• Refine findings
• Develop a strategy

Porter's Five Forces

• Strategic framework for identifying and analyzing the five competitive forces that affect a company's profitability:
  • Threat of New Entrants
  • Bargaining Power of Suppliers
  • Bargaining Power of Buyers
  • Threat of Substitutes
  • Competitive Rivalry
• Developed by Michael Porter in 1979

Using Porter's Five Forces

• Industry Analysis: Identify key forces shaping the industry
• Strategic Planning: Craft strategies to mitigate threats and capitalize on opportunities
• Innovation and Differentiation: Companies focus on innovation and differentiation to reduce the impact of competitive forces
• Partnerships and Alliances:Forming strategic alliances with suppliers or buyers
• Monitoring and Adaptation: Regularly updating allow businesses to adapt

Clayton Christensen's Theory of Disruptive Innovations

• Explains how small innovations overturn established industries.
• Disruptive innovation: A new entrant challenges established companies by targeting underserved markets.

Disruptive Innovation - Series of Steps

• Incumbents prioritize high-end customers, neglecting lower-end needs.
• New entrants offer simpler, cheaper products.
• Established companies fail to recognize the threat.
• Innovators improve, gradually moving upmarket.
• A significant portion of the market, displacing incumbent and transforming the industry.

Artificial Intelligence (AI)

• A field focused creating machines with learning, reasoning, and acting abilities.
• A set of technologies enabling advanced functions.

Types of AI

• Machine Learning: Algorithms to study data and make better decisions.
• Deep Learning: Neural networks to process information.
• Generative AI: Creates new content based on user input.

Examples of AI

• Chatbots
• Virtual Assistants
• Recommendation Systems

AI Roles in Reshaping Industry (AQIP)

• Automation: Handles routine tasks allowing humans to focus on strategic and creative work.
• Quality Control: Detects product defects improving quality control in manufacturing.
• Innovation and Design: Contributes to product design generating new ideas.
• Personalized Customer Experience:Delivers tailored recommendations leading to marketing campaigns and customer support.

Applications of AI

• Manufacturing
• Retail
• Transportation
• Healthcare
• Finance

Blockchain

• A system maintaining a record of transactions across computers in a peer-to-peer network.
• A secure, decentralized digital ledger.

Types of Blockchain

• Public Blockchain: Open to anyone and are decentralized and transparent
• Private Blockchain: Restricted to specific members by network administrators.
• Consortium Blockchain: Controlled by a group of organizations
• Hybrid Blockchain: Combines elements of public and private blockchains.

Blockchain's Purpose

• To enable secure, transparent, and tamper-proof transactions

Blockchain's Role in Innovation

• Smart Contracts: Self-executing contracts written into code.

• Tokenization: Digital representation of assets.

• Decentralized Applications (DApps): Services without centralized control, enhancing security.

• Sustainability And Ethical Innovation (Module 3)

Sustainable Innovation

• Products, services, or processes beneficial to both the organization and society in the long term.

Three types of Sustainable Innovation

• Operational Optimization: Improving operational processes without changing the business model
• Organizational Transformation: Creating new products that benefit the environment.
• Systems Building: Collaborating to create positive impacts on people.

Ethical Innovation

• Organization Leaders seek ethical decisions on the company's R&D.

Green Business Model

• Significant improvement in overall performance that includes both economic value and environmental benefit
• Supports the diffusion of environmentally beneficial services or products.

Main Green Business Models

• Green Product Design: Using sustainable materials.
• Green Efficient and Localized Production: Emphasizing green business locally.
• Product Service Systems: Satisfying customers increasing loyalty avoiding risk
• Prosumers and Co-creation: Collaboration where all innovative business ideas value each other.
• Consumer Choice Influencing: Analyzing consumer behavior and the product they use so green companies can create a variety of green products.
• Collaborative Consumption: Achieve common goals with sustainable development avoiding greenhouse gasses.
• Waste as a Resource: Extract raw materials to produce products
• Green Supply Chain Management - Integrating sustainable production.
• Closed-Loop - Reducing waste more and more by reusing products again.
• Organic and Biodegradable Production - Growing demand for organic products because of the positive consumer changes and effects.

Circular Economy

• Consumption with sharing, reusing, repairing and recycling
• Extends life cycle of products.

Circular Resource Loop Strategies

• Narrow the Loop - Fewer resources enter production loop
• Close the Loop - Recycle waste
• Slow the Loop - Reducing consumption enabling reuse.
• Regenerate the Loop - Restore the resources.

Balancing Profit and Social Responsibility

• The relationship between both are important
• Ethical implications across boarders that must have action
• The moral that are needed alongside the financial gains

Balancing Profit and Social Responsibility - 5 key aspects

• The Profit-First Perspective - Shaping the how's, whens and whats on operating.
  • The Maximizing Shareholder Value - Business models valuing shareholder
  • With profits mainly emphasizing on short term gains (earnings reports, stock market and performance).
• The stakeholder Approach
  • Holistic View - That all stakeholders must listen to the business and environments.
  • Triple bottom line -
    • People - Wage, employee well being and the value/inclusion for all.
    • Planet - Environmental, resource and the decreasing of carbon foot print.
    • Profit - Performance and growth for the financial side.
• Corporate Social Responsibility (CSR) Involves companies taking on their voluntary/chosen actions towards social issues.
  • Philanthropies - supporting developing causes
  • Ethical sources - Reducing sources against child abuse.
  • Employee engagement - providing better wages, safe conditions as well as opportunities.
• Ethical Dilemmas and Trade-offs In the difficult decisions needing balanced success.
  • Making tough choices from profit view vs social.
  • Transparency in profit vs socials

Incorporation Strategies of Innovation - Startup's Module 4

• Open about there process of the progress.
• How to balance profit with social in relations to responsibility.
• Leaders should think about ethical considerations and their incorporation
  • Also to think about the long term implications
  • Understanding all the needs from everybody from the environment.
  • Support adopting the sustainable practices
  • Also invest in the community

Strategies for Incorporating Innovation Into Startups - Strategies Module 4

• Incorporate more of an innovative way
  • Encourage employee empowerment as well as the management.
  • Also give employees psychological safety.
• Implementing the best version of open innovation
• Investing in R\&D
• Technology improvements like AI ect
• Empower the employees with more innovation
• Enable all challenges with a cross-functional way

Constant Learning and Development

• Enhances one's knowledges to keep up with every aspect of the change.

Customer-Centric Innovation

• Using customer information in order to fully understand there every need/evolutions.

Lean Startup Methodology

• Developing every product with a small step allows the most amount of time.

Traditional Startup

• Requires 2-5 year plans in order to succeed

Eric Ries

• The person behind lean startup