LECTURE 2 THE INNOVATION ENVIRONMENT (MACRO LEVEL)
Nokia overleefde het niet omdat ze niet van een normale telefoon naar een smartphone
konden
Evalutionary lense: capacity to addapt to the environment makes a company survive – ability
to move (generating something new= innovate).
Difference between innovation and change:
Change is broader concept, doing things differently but not a new way, it’s not new to
the organization
Innovation = something that you do is new, the context it could be innovative/new
for the company or industry or to the world
o Bijv system die nieuw is in organisatie maar andere gebruiken het al
Types of innovations:
Product innovations: something you can sell, bv cars, telephone. New products
o In goods: cars, computers, etc.
o In services: uber, Airbnb, salesforce
Process innovations: different ways doing things, change the workfkow
o Technological: different technologies to change the way work was done. =
verandering van technologie waardoor werk anders wordt gedaan.
Bv excel, AI,
o Organizational: the way you structure the manufacturing bv automobils;
verschillende productielijnen tot eindproduct.
, Improvement/incremental Renewal/radical
Evolutionary (step by step) Revolutionary; jumps, a new horizon.
We can always improve We have to change (crisis) to survive
1e order solutions Change improve (2nd order solution)
Focus management of operations Focus: management of different
(efficiency, less costs, more client value) opportunities
Dominant role of planning & control omdat Focus on creativity & entrepreneurship to
dit geleidelijk gaat met een gestructureerde think of a change how you can survive
aanpak
BV Six Sigma, iphones met elk jaar BV Internet, cars, airplanes
verbeterde versie camera
Consequences of types of innovation
Organization needs to be engaging In both. Relation: incremental that’s generating money
dan heb je geen geld om te investeren in lange termijn iversteringen (incremental is geld
voor lange termijn opsparen dus je hebt beide nodig).
Incremental: verbeteringen
o short term financial revenue.
o No guarantee for long term survival
Radical: grote nieuwe veranderingen
o Long term financial costs
o Necessary for long term survival
Organisations need both of the innovations types to survive.
Product life cycle: is it something new (AI) or more mature (smartphones).
Time
Performance: how well is the product performing.
,Relationship beginning of the image: At the beginning every one unit of time investing in the
product (als je 1 dollar investeert dan genereer je meer geld terug). Alles boven de lijn; hoe
meer je inevsteert in tijd hoe minder je terug krijgt.
Time investing in new product/services
Als het product klaar is en je meer investeert krijg je het niet zo hard terug als aan het begin.
Start with a lot of testing and investing in the new product. After that you invest in marketing
to introduce the product to the market and after that you gain more revenue. However, the
time will be less because the product is already there.
Technology push: something is completely new and there is experimentation about the best
technology which fits with the client preferences
Market pull: the market is shaping or changing (consumers are shaping the way how the
product is developing)
The revenue increases, but later it will flatten out. The revenue slows down.
Why? the market changes, not many opportunities to grow, you have competitors, more
competition
A new product there is a lot of competition with new entrances.
At the beginning there is a lot of uncertainty, you don’t know what the customers exactly
want.
Daarna gaat het iets naar beneden de innovation, omdat er een dominant design is
ontworpen. Dus komen er minder spelers op de markt omdat er een dominante is.
Relation to innovation:
, Product innovation: at the beginning of product life cycle high, most of product innovation is
at the beginning because then you design and test the new product.
Bv Emergence of a smartphone (blackberry vs apple), there was a dominant design
smartphone with the keyboard inside.
Piekt in het midden, past nog kleine dingen aan op het design. Bijv reduce deffects,
increasing quality of product. (process innovation) efficienct. As the indsurty matures is
flatten out because there is less room to improve later on.
RECAP!!!
Motivate innovation; only way to survive
capacity to adapt and innovate.
Firms are more vulnerable than humans. so innovation is crucial.
General definition innovations; instance of change that’s new to the context (firms,
industry, world). New change in a certain time and place/context
Difference between product and process innovation
Difference between incremental and radical
Different phases in product life cycle: