XIME / PGDM-B2B –RS–2525-February-2010 Management of Innovation … (1) Innovation is either –Planned or strategicDeliberate –A lucky break, chaoticEmergent (Euphemism!) Botox, Viagra, Equal (aspartame), Vulcanization, Penicillin, Dynamite
XIME / PGDM-B2B –RS–2525-February-2010 Management of Innovation … (2) Strategic innovation falls into 2 categories –Induced Deliberately brought about (manipulated) through inducement etc Innovation occurs along a projected path –Autonomous Driven by the individual himself / herself Often the outcome of a questioning mind
XIME / PGDM-B2B –RS–2525-February-2010 Management of Innovation … (3) InducedAutonomous Initiative By the individual, but In line with organizations. By the individual, and could differ from orgn.s Screening Formal, as per the organizations ways Informal network Type Usually incrementalCould be radical Communication In line with organizations Is different, especially in the early stages Major Players Prescribed by the organization Informal network Decisions Authority clearly definedPoorly defined Strategy Formulation Alternatives considered before commitment In the early stages, the proposer s call Characteristics – Strategic Innovation
XIME / PGDM-B2B –RS–2525-February-2010 Management of Innovation … (4) Guidelines for Autonomous Strategic Innovation Nurture, encourage Avoid shackling the initiative through budgets, rationing resources Encourage information exchange
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (1) Technology and innovation are closely interconnected! –HMT –Caustic soda – mercury cells –Cellular telephony Technological innovation can be: –Product oriented –Process oriented –Both R&D - a necessity for all !
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (2) Technology development projects fall into 4 categories –Derivative projects –Platform projects –Breakthrough projects –R & D Projects
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (3) Relating Technology to Products Technology developed for one product could provide the platform for another –Honda: Engines from 2/4 wheelers to generators –Canon: From copiers/fax machines to printers Yields Product Families – share a common platform but are targeted for different markets / uses. Important for an organization to focus on developing product families – it will distribute risk.
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (4) Commercializing Technology Ability to commercialize / take advantage of technological innovations characterizes a winner Has 4 dimensions : –Time to Market –Market Spread –Number of Products –Breadth of Technologies
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (5) Commercializing Technology – Time to Market Impact of shorter product life cycles : –Minimize time from development of product to market exploitation –Market forecasts are more accurate
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (6) Commercializing Technology – Market Spread Make the product available to diverse market segments – in geographic and user terms Use JVs, licensing if necessary
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (7) Commercializing Technology – Number of Products Develop variants of products – to cater to niche markets Higher customer satisfaction – better fit of product with his needs
XIME / PGDM-B2B –RS–2525-February-2010 Technology & Innovation … (8) Commercializing Technology – Breadth of Technologies Integrate technologies – should not have too many. Increases costs and the risk of losing out in any one of them
XIME / PGDM-B2B –RS–2525-February-2010 Innovation & New Products … (1) To sustain a competitive advantage Top management backing necessary Perseverance necessary as product failure rates are high
XIME / PGDM-B2B –RS–2525-February-2010 Innovation & New Products … (2) Sources of New Ideas Internal –Those close to the customer (sales people, distribution channel members) –Those close to technology development (R & D) –Top management (organizations SWOT) External –Customers
XIME / PGDM-B2B –RS–2525-February-2010 Innovation & New Products … (3) Forming Teams Multidisciplinary Concurrent engineering Team structure – 4 types –Functional –Lightweight –Heavyweight –Autonomous
XIME / PGDM-B2B –RS–2525-February-2010 Functional Teams Functional areas work on clear, pre-defined goals that have been agreed to. Could be difficult to compartmentalize work in this fashion Functional areas could work sequentially, and pass on work when completed to next functional area. Could result in delays.
XIME / PGDM-B2B –RS–2525-February-2010 Lightweight Teams Similar to Functional Teams Formation of a project coordination committee Each functional area is represented by a liaison manager on this committee. Committee headed by a project manager who coordinates the work Drawbacks –Project manager does not control the resources
XIME / PGDM-B2B –RS–2525-February-2010 Heavyweight Teams Similar to Lightweight Teams Project manager takes control and responsibility. Functional area members are under his control. However, functional members revert back to functional area when project is over. Work is formalized – plans, time schedules etc.
XIME / PGDM-B2B –RS–2525-February-2010 Autonomous Teams Works better for Breakthrough projects. Project manager is in control of all the resources. Can draw his team members from the functional areas Latitude for: –Team structure –Reward structure Accountable for result.
XIME / PGDM-B2B –RS–2525-February-2010 Choice of Team Structure Incremental changes, stable competitive & tech. environment StructureSituation Functional Lightweight Rapid changes in customer requirements, tech., competition Heavyweight Autonomous When speed is required Significant competitive challenges
XIME / PGDM-B2B –RS–2525-February-2010 Quality Function Deployment (QFD) QFD – for identifying: The attributes the customer wants in the product Establish link between these attributes and the product design Process involves understanding, and then marrying: The Voice of the Customer The Voice of the Engineer
XIME / PGDM-B2B –RS–2525-February-2010 Voice of the Customer Identify customer needs –The benefits the product should deliver –Necessary to identify, and focus, on the main ones –Relatively easy to do if the market is homogenous –Weight each attribute: enables QFD to balance it with cost
XIME / PGDM-B2B –RS–2525-February-2010 Voice of the Engineer Translate customer needs into product design Put onto a matrix against what the customer wants, and compared with competition
XIME / PGDM-B2B –RS–2525-February-2010 New Product Success / Failure - Factors Success Product Uniqueness / Superiority Market Knowledge Marketing Proficiency Technical & Production Proficiency Failure Price, with no economic benefit Obsolete in terms of whats available Customers satisfied with existing product
XIME / PGDM-B2B –RS–2525-February-2010 Cant forget the law! Woodss First Law Of Procrastination NOW is the time to do things later! Woodss Second Law Of Procrastination Procrastinate today! (Tomorrow may be too late.) Woodss Third Law Of Procrastination Never put off till tomorrow what you can do the day after tomorrow!
XIME / PGDM-B2B –RS–2525-February-2010 Moving Forward Next Session: PGDM-RS-13 Date:Tuesday, Mar 02, 2010 Subject:Managing Services - Role & Importance - Buying Services - Marketing Mix - New Services