Summary
Lecture summary for 1ZV50
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This document is a summary of all lectures of course 1ZV50(fundamentals of product innovation).
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New-to-the world products: most innovativeCost reduction: provide similar performance to
existing products
Repositioning: existing products targeted to a new
market
Line extensions: also known as
flanker brands
Need for product
Ongoing profit requires new product
Long-term survival of firms
25-49% of profit from new products
Product innovation objective: Add value by leveraging internal value & knowledge
generation in order to have a positive reception by customers. This leads to marketing
success(brand visibility and brand success) and economic success.
Stage-Gate processes: a way to manage the risk. Activities are not sequential. Guidline the
process. Multifunctional.
Globalization:
Makes product innovation more challenging
Advantages worldwide
Efficient and effective
Accelerated Product Development(APD): speeding in to the market
Disadvantages:
o Quality sacrifice
o High costs
o Inadequate attention to key market tools
Discovery-driven planning: planning that acknowledge unknowns and uncertainties
Product Innovation Strategies:
Product Portfolio Planning: how resources are spent to ensure a steady stream of
big new product opportunities
o Goals: value maximization, balanced portfolio, strategic decisions, right
number of products
,Product Platform Planning:
Platform: common basis in terms of design, development or production process,
shared among individual products in a product family.
o Technological platforms(shared components)
o Category platforms(shared design or technology)
o Brand platforms(shared brand value)
Risk-Reward Bubble Diagram: this diagram provides a lot of information to senior
management on how to allocate resources to deal with various projects in innovation funnel.
Product Innovation Charter(PIC): document prepared by senior management designed to
provide guidance to the business units, but applies for a more micro level within the firm and
adapted to the new product activities
Sections of PIC:
o Background
o Area of focus
o Goals
o Guidelines
Opportunities come from:
Emerging trends
New technologies or markets
Possibilities for product or process improvement
Threat by competitor or technical shift
New, changing customer needs
New solutions to needs
Portfolio Review Dominant approach: every innovation project must be compete against
each other.
When a product is creative? Valuable to customer(user value) and firm(feasible in terms of
technology, cost, and time).
Components of creativity:
Expertise
Creative thinking skills
Motivation
Bazooka effect: idea of one person can be shut down because of others.
, Managing Group Creativity:
Constant switching between individual and teamwork
o Individual: gathering knowledge, idea generation, and elaboration.
o Team: sharing knowledge & first ideas, brainstorming, discussing …
Electronic brainstorming:
o Simultaneous contribution
o No social loafing, anonymously
o Stimulating follow up discussions
o Possible at different locations
Identifying and Solving Problems:
1- Determine product category for study
2- Identify heavy/light users
3- Gather set of problems associated with product category
4- Sort and rank the problems according to their importance
5- Undertake the problem solving efforts
Idea Generation Process:
Evolutionary process(in loops)
Continuous need for new information
Switch between ‘generation’ and ‘evaluation’ activities
Reasons of failure:
Escalation of commitment:
o Project management characteristics
o Career problem
o Skunk costs
o Everything is tentative
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