Innovation Management Overview

Innovation Management

• Innovation is the practical implementation of an idea to create a new device or process
• Product innovation develops new or improved products, embodied in goods or services. Process innovation relates to how an organization manages its business.
• Radical innovations are significantly new and different from established solutions, while incremental innovations make minor adjustments to existing practices.
• Competence-enhancing innovations build on existing knowledge and skills, while competence-destroying innovations render existing knowledge/skills obsolete. Innovation impact varies depending on the perspective.
• The innovation process involves firms managing resources over time to develop capabilities that influence their performance. This requires unique organizational architectures.
• Invention creates a new tangible product or process, while innovation is the application and translation of invention to the economy. Examples include electric boards as inventions and mobile phones as innovations.
• Conceptual frameworks of innovation depict the creation of new knowledge by organizations and universities, along with technology development, and market needs. Linear models show the research and development, manufacturing, and marketing process. An interactive model shows technology push from science and technology advancement, market pull from consumer needs, and the commercialization of products.

Models of Innovation

• Different models categorize the innovation process, offering varied perspectives. Conceptual frameworks show knowledge creation, technology development, and market needs. Linear models follow a sequence of events from research and development to marketing, while interactive models show the interplay between technology push and market pull.

Innovative Capabilities

• Examples of innovative firms and their capabilities are given in a table. This shows how they use technology, platforms, ecosystems, and various methods to develop new products and services.

Innovation in India: Chotukool Project

•  Chotukool is a 43-liter, solid-state cooler running on 12V DC (battery/inverter/solar). It weighs ~7.8 kg and maintains a temperature range of 5°C to 15°C. Priced between Rs 3,250-3,500.

Apple Case Study

• Apple's ROI (return on investment) decline is due to factors, such as the iPod's decline (replaced by smartphones), increasing competition from brands like Samsung and Google causing rising costs, and significant investments in data centers impacting short-term returns.

Radical vs. Incremental Innovations

•  Radical innovations are entirely new and distinct from previous solutions, while incremental innovations make minor changes to existing practices, like improving a phone's crack resistance.

Competence-Enhancing vs. Competence-Destroying Innovations

• Competence-enhancing innovations leverage existing competencies, making them more valuable. One example is successive generations of iPhones. Competence-destroying innovations render existing competencies obsolete. An example is the decline of Blockbuster.

Component vs. Architectural Innovations

• Component innovation alters individual parts without system changes. For example, an iPhone 12 vs 13 would fall under this. Architectural innovation changes a system's structure or component interaction.

Technology S-Curves

• Technology S-curves show the relationship between technological development and adoption. Initial development is slow but accelerates, leading to pricing reductions and accelerating adoption rates.

Diffusion of Innovation and Adopter Categories

•  Adopter categories in the diffusion of innovation model, from innovators (first 2.5%) to laggards (last 16%). Each group responds differently to new innovations based on risk tolerance and resources. Early adopters are influential.

Organizational Culture and Climate for Innovation

• Culture represents shared values and beliefs, typically tied to existing success factors. Climate reflects daily operations and reward systems, reflecting the values and priorities of the organization. Both are shaped by interactions/expectations within the organization itself.
• Models, like those by Martins 1987, describe organizational culture and its connection to leadership, vision, mission, and customer focus. Organizations need measurable individual and team goals.

Managing Intellectual Property

• Patents grant temporary monopolies to encourage innovation, requiring disclosure of invention details. Copyright protects certain creative works (literary, dramatic, musical etc.) automatically, lasting varying lengths after author death or publication. Trademarks safeguard a company's image and reputation, identifying goods or services. Trade secrets protect unique business practices.

Limitations of the Patent System

• Patents can be expensive to secure and enforce, with significant costs, particularly for small firms. Limited access for small businesses and weaker protection in some industries. The system may not be sufficient to fully protect newer ideas, especially given short/limited terms of patent protection

Managing Intellectual Property

• Patents protect inventions; Copyright protects works (music, writing, etc.). Trademarks distinguish goods/services.

Competitive Advantage (Strategic Direction)

• Competitive advantage arises when a firm's offerings are valued more than competitors'. This can be achieved through lower prices, better service, or superior features. First-mover advantages accrue when a company becomes a market leader.
• Competitive intelligence is essential to gather information about competitors and the market environment.

Porter's Five Forces

• Rivalry among existing competitors, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, and threat of substitute products or services.

Stakeholder Analysis

• Stakeholder analysis examines the impact of various parties on a firm's performance. This includes shareholders, employees, customers, suppliers, lenders, the local community, and competitors.

Porter's Value Chain Model

• This model examines internal activities from raw materials to the finished product. The processes are described as primary activities (inbound/outbound logistics, operations, marketing/sales, service) and support activities (procurement, human resource management, technology development, infrastructure).

Big Data

• Big data analysis from sources like social media and mobile devices allows firms to identify patterns, improve products, and gain market insights. It is crucial for businesses to manage and leverage big data effectively, in consideration of the challenges relating to cost, security, misuse, and biases.

Core Competencies

• Core competencies are a company's unique skills and resources that provide a competitive edge. Examples include buying power, company culture, customer service, and strategic partnerships.

Open Innovation

•  Open innovation involves collaboration with external stakeholders to drive innovation and create value. It contrasts with closed innovation which keeps innovation internal.

Technology Transfer

•  Technology transfer involves applying existing technology to new uses or expanding its use in different areas and is important for gaining various competitive advantages. This can be done by leveraging different channels such as partnerships, intermediaries or using models like directories. Barriers to technology transfer can include issues of receptivity, accessibility and mobility within the organization (or project groups).

New Product Development

• New product development (NPD) is a sequential process of decisions, categorized as concept design, supply chain design, product design, and production ramp-up/launch. NPD models vary by industry.