Types of Innovation

1. Types of Innovation Rev: Aug, 2012 Euiho (David) Suh, Ph.D. POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management EngineeringPOSTECH

2. Contents

3. Product vs. Process Hybrid cars Smart Phones HD TV, 3D TV • Product Innovation • Embodied in the outputs of an organization • In the outputs: Goods or Services • Examples • Process Innovation • Innovations in the way an organization conducts its business • In Producing or Marketing goods or services • Examples • Redesign of Industry Value Chain: • Customer Self Service (e.g. self-oiling service) • Customer-to-customer (e.g. eBay) • Redesign of Processes: • Use of real-time and geographical information (e.g. Asiana Airlines Baggage handling system) • Workflow management and document management (e.g. ERP)

4. Radical vs. Incremental Film Camera  Digital Camera Slimmer or Smaller • Radical Innovation • New and different from previously existing products and processes • Example • Incremental Innovation • Minor change from (or adjustment to) existing practices • Example

5. Competence Enhancing vs. Competence Destroying Intel’s Pentium 4 built on the technology for Pentium III Electronic calculators rendered Keuffel & Esser’s slide rule expertise obsolete • Competence-enhancing Innovation • Builds on existing knowledge and skills • Example • Competence Destroying Innovation • Renders existing competencies Obsolete • Example

6. Architectural vs. Component High-wheel bicycle to Safety bicycle ABS of automobile • Architectural Innovation • Changes in the overall design of a system • Example • Component Innovation • Changes to one or more components • Example