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Managing Innovation & New Industrial Product Development. Chapter 10. Managing Innovation. Two approaches: Induced strategic behavior Traditional Administrative mechanisms Autonomous strategic behavior Entrepreneurial Product champion
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Managing Innovation & New Industrial Product Development Chapter 10
Managing Innovation • Two approaches: • Induced strategic behavior • Traditional • Administrative mechanisms • Autonomous strategic behavior • Entrepreneurial • Product champion • “An organization member who creates, defines, or adopts an idea for an innovation and is willing to assume risk.” • 3M
Managing Innovation • Why is the Silicon Valley widely recognized for innovation? • Market for ideas • Allocation • Attraction • Market for capital • Investors v. corporations • Market for talent • Employee movement
Managing Technology • Classifying Development projects • Derivative projects • Platform projects • Breakthrough projects • Research and development
Managing Technology • Product-Family Focus • “Products that share a common platform but have different specific features and enhancements required for different sets of consumers.”
Disruptive Innovation • Overshooting Customer Demands • Sustaining v. Disruptive • Sustaining • Disruptive • Low-end strategy test • For whom? • Customers at low-end wanting ______________ _______________________________________ • Create model that can be profitable at discount price to attract customers. • New-market strategy test • For whom? • People who lack __________________________ _________________________________________ • Present customers who need to go to an inconvenient location
What makes some companies better innovators? • Limited structure • Strict priorities for new products • Tied to resource allocation • Real-Time Communication and Improvisation • Better communication • Improvisation • “Design and execution of actions that approach convergence with each other in time.”
What makes some companies better innovators? • Experimentation • Creating options for the future • Time Pacing • “A strategy for competing in fast-changing markets by creating new products at predictable time intervals.”
What Drives a Firm’s New Product Performance? • Quality of a Firm’s New Product Development Process • Process • Emphasize market and technical assessment • Complete description of product • Go/kill set-up points • Flexible • Resource commitments • Resources committed to meet firm’s objectives • R&D budgets were adequate and aligned with objectives • Necessary personnel are available • New product strategy • 3M
What Drives a Firm’s New Product Performance? • Anticipating Competitive Reactions • Developing scenarios • When will a competitor react? • If _____________________________ and ______________________
What Drives a Firm’s New Product Performance? • Sources of New Product Ideas • Internal/External • Lead users • “A small number of highly influential buying organizations that are consistent early adopters of new technologies.” • Lead user method • Staying ahead of customers
Quality Function Deployment • “Identifies critical customer attributes and establishes a specific link between customer attributes and product design attributes.”
Quality Function Deployment • QFD • Voice of Customer • Identify customers needs and wants • Interviews • Assign weights • Voice of Engineers • Translate customer needs into product design attributes • Examine relationship between design parameters and customer needs • Benefits of QFD
Determinants of New Product Performance and Timeliness • Determinants of Success • Strategic Factors • Product Advantage • Marketing knowledge • “Fit between _____________________ and ____________________________.” • Technical synergy • “Fit between _____________________ and ____________________________.” • International orientation
Determinants of New Product Performance and Timeliness • Determinants of Success • Development Process Factors • Predevelopment proficiency • Market knowledge and marketing proficiency • Technical knowledge and technical proficiency
Determinants of New Product Performance and Timeliness • Determinants of Success • Fast-paced Product Development • Matching process to development task • Compressed strategy for predictable projects • Compressed strategy • Experiential strategy for unpredictable projects