Innovation Management in ACCTG 705

Questions and Answers

What is the primary goal of innovation as defined in Innovation Management?

To transform existing ideas into new products or services that create wealth or improve societal well-being.

List the three key steps involved in the innovation process.

Idea, Create, Validate.

Describe the Innovation Cycle in brief.

The Innovation Cycle consists of Think, Make, Try, and Refine.

What is Disruptive Innovation?

Disruptive Innovation creates new markets and categories or serves existing markets with superior offerings. Signup and view all the answers

How does innovation serve as a strategy for businesses?

Innovation helps businesses stay ahead of competition by offering unique products or solutions that meet consumer needs. Signup and view all the answers

What role does technology play in the innovation process?

Technology serves as a source for developing innovative solutions and enhancing existing products or services. Signup and view all the answers

Why is validating an idea a critical step in the innovation process?

Validating an idea ensures that the product or service meets market needs and has potential for success. Signup and view all the answers

What is the significance of refinement in the Innovation Cycle?

Refinement allows for improvements based on feedback and testing, enhancing the final product or service. Signup and view all the answers

What is sustaining innovation and how does it benefit a company?

Sustaining innovation involves improvements to existing products by anticipating consumer needs, which helps retain loyal customers and expands the product line. Signup and view all the answers

Describe an example of sustaining innovation and its impact on a market.

The reconfiguration of copiers from large, expensive machines to small desktop models created a new market for personal use, significantly increasing sales. Signup and view all the answers

What are Peter Drucker’s Seven Sources of Innovation?

The sources include unexpected occurrences, incongruities, process needs, industry structure, demographics, mood or meaning, and new knowledge. Signup and view all the answers

List the steps involved in the New Product Development (NPD) process.

The NPD process includes: new product strategy, idea generation, screening, concept testing, business analysis, product development, market testing, and product launch. Signup and view all the answers

What characterizes the introduction stage of the Product Life Cycle?

The introduction stage is characterized by low sales, high costs per customer, financial losses, and few competitors. Signup and view all the answers

How does sustaining innovation influence consumer choices?

Sustaining innovation expands the company’s product line, offering consumers more choices and enhancing customer satisfaction. Signup and view all the answers

What role does idea generation play in the New Product Development process?

Idea generation is crucial as it initiates the creation of new concepts and potential products for the market. Signup and view all the answers

Why is it important for companies to understand the Product Life Cycle?

Understanding the Product Life Cycle helps companies to strategize marketing and manage resources effectively throughout different stages. Signup and view all the answers

How has the emergence of excellent cameras on cell phones disrupted the digital camera industry?

Cell phones with high-quality cameras have replaced the need for standalone digital cameras, as they offer convenience and comparable image quality. Signup and view all the answers

Define breakthrough innovation and provide an example.

Breakthrough innovation is a revolutionary solution that shifts paradigms globally, like the introduction of smartphones that changed communication and computing. Signup and view all the answers

What is radical innovation and how does it benefit consumers?

Radical innovation reshapes industry conventions to create new products that offer unique benefits, like the Apple AirPods which introduced wireless listening. Signup and view all the answers

Explain incremental innovation and its significance in product development.

Incremental innovation involves making small, steady improvements to existing products that enhance features and design over time. Signup and view all the answers

How do breakthrough and radical innovations differ in terms of market impact?

Breakthrough innovations change paradigms unexpectedly, while radical innovations reshape existing markets by introducing significantly improved products. Signup and view all the answers

Discuss the role of consumer desire in incremental innovation.

Consumer desire drives incremental innovation as companies tweak and refine products to meet evolving preferences over time. Signup and view all the answers

In what way can new technologies open up new markets according to radical innovation?

Radical innovation uses new technologies to develop products that create entirely new markets, appealing to previously unmet consumer demands. Signup and view all the answers

Give an example of how old technology can be harnessed in new ways.

Using smartphones to facilitate mobile banking illustrates how existing technology is repurposed to create new business models. Signup and view all the answers

Study Notes

Innovation Management Overview

Innovation involves transforming existing concepts into new products or services that create wealth or enhance societal well-being.
It is a vital strategy for competitive advantage, requiring the translation of ideas into tangible solutions addressing consumer needs.
The innovation process can be broken down into three essential steps: Idea, Create, and Validate.
The Innovation Cycle includes: Think, Make, Try, and Refine.

Types of Innovation

Disruptive Innovation:
- Creates new markets and customer segments, often rendering traditional approaches obsolete.
- Utilizes modern technology in innovative ways to develop new business models.
- Example: Advanced smartphone cameras disrupting the digital camera industry.
Breakthrough Innovation:
- Introduces solutions that radically shift paradigms globally, often employing new technology.
- Consumers may not recognize their need for these innovations until experiencing them.
Radical Innovation:
- Completely reshapes industry norms to provide new consumer benefits using cutting-edge technology.
- Example: Apple AirPods revolutionizing wireless technology in personal audio devices.
Incremental Innovation:
- Focuses on gradual improvements over time through minor adjustments and feature enhancements.
- Primarily driven by consumer desires for product refinement.
- Example: Newer iPhone models featuring better cameras and processors.
Sustaining Innovation:
- Involves enhancing existing products based on predicted consumer needs to retain loyalty without altering company goals.
- Expands product lines to provide a broader array of consumer choices.
- Example: Smaller, affordable copiers designed for personal use by reconfiguring existing large models.

Sources of Innovation

Peter Drucker’s Seven Sources:
- Unexpected occurrences
- Incongruities in processes or perception
- Specific process needs
- Structure of industries or markets
- Demographic shifts
- Cultural mood or meaning
- New knowledge advancements

New Product Development (NPD) Process

Encompasses the full cycle of bringing a new product to market, recognizing market opportunities and product availability.
Key stages include:
- New product strategy formulation
- Idea generation
- Screening for feasibility
- Concept testing
- Business analysis for market viability
- Actual product development
- Market testing before full launch
- Final product launch

Product Life Cycle Stages

Introduction Stage:
- Characterized by low sales, high per-customer costs, and potential financial losses.
- Few competitors present, targeting early adopters or innovative customers.

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Description

This quiz covers the fundamentals of Innovation Management as part of the ACCTG 705 course on Innovation and Strategy Formulation. Explore how innovation plays a critical role in business strategy and its implications for growth and development.