1. Innovation management: an introduction
Chapter 1
Innovation management: an introduction

2. Theories and models of innovation management
Introduction
Product and process innovations
Typology of innovations
Different schools of thought
Models of understanding of innovation management
Implications for developing products and services
Summary and review

3. Introduction
Innovation management is not exclusively associated with products
New ways of doing business in service sector
Innovation management involves change, particularly technological change
Sometimes this involves product, service and process changes
The level of change is an important dimension

4. Product technology advantages
Pfizer’s Sildenfil – aka Viagra:
The fastest selling human drug
Gore Associates’ Gore-Tex:
the versatile polymer polytetrafluoroethylene (PTFE)
Dyson’s vacuum cleaner:
Revolutionised a very stable mature industry

5. Process technologies
Enterprise Resource Planning (ERP) business software; virtually all large firms have installed it.
SAP, Oracle, Baan and PeopleSoft.
SAP has over 20,000 products installed worldwide and Oracle has installed databases in nearly every one of the world’s top 500 companies.
Moreover, it has changed the way they work (Gartner, 2002).

6. Typology of innovations
Type of innovation Example
Product innovation The development of a new or improved product
Process innovation The development of a new manufacturing process such as Pilkington’s float glass process
Organisational innovation A new venture division, a new internal
communication system;
Management innovation TQM (total quality management) systems, BPR
(business process re-engineering); introduction of SAPR3
Production innovations Quality circles, JIT manufacturing system, new
production planning software, e.g. MRP II, new
inspection system
Commercial/marketing innovations New financing arrangements, new sales
approach, e.g. direct marketing
Service innovations ebay; Internet banking, etc.

7. Popular view of innovation:
The lone inventor/mad professor.
But, such views lead to misunderstanding. Science does not equal innovation. Innovation is much more than science, e.g. scientific discoveries pre-date commercial products by many years.

8. Three key schools of thought:
Market-based view of innovation; market conditions provide the context which facilitate or constrain the extent of firm innovation activity (Slater & Narver, 1994; Porter, 1980, 1985).
Resource-based view of the firm; a firm’s own resources provide a much more stable context in which to develop its innovation activity, and to shape its markets in accordance to its own view (Tidd et al., 2001; Shavinina, L.V. (ed.) (2003); Patel, P. and Pavitt, K. 2000).
Serendipity Innovation is all due to luck and good fortune

9. Table showing the chronological development of models of innovation
195
0/60s
Technology push
Simple linear sequential process. Emphasis on
R&D. The market is a receptacle for the fruits
of R&D.
1970s
Market-pull
marketing. The market is the source for
directing R&D. R&D has a
reactive role.
1980s
Coupling model
Sequential, but with feedback loops.
Combinations of push and pull.
1980/90s
Interactive model
Emphasis on integrating R&D and marketing.
1990
s/00
Network models
Emphasis on external linkages

10. Linear models of innovation management
Research and
development
Manufacturing
Marketing
User
Technology push
Market pull

11. Coupling model of innovation management
Manufacturing
Marketing
Research and
development

12. Conceptual framework Science and technology base Needs of the market
developments
Technological
Creation of new knowledge
dominated by universities and
large science-based organisations
Technology development-
dominated by organisations
the consumption of products
Consumers express their
needs and wants through

13. Organisation’s knowledge base accumulates knowledge
Innovation management framework
EXTERNAL INPUTS:
macro factors
ROI
costs;
competition.
Organisation and business strategy
Organisation’s knowledge base accumulates knowledge
over
time
Marketing
EXTERNAL INPUTS:
societal needs;
competitors;
supplier partnerships;
distributors;
customers;
strategic alliances.
EXTERNAL INPUTS:
scientific and technological
development;
competitors;
suppliers;
customers;
university departments.
Research and technology
New products
Source: Trott, 2005

14. Explanations for innovative capability
Innovative firm
Explanation for innovative capability
Apple
Innovative chief executive
Google
Scientific freedom for employees
Samsung
Speed of product development
Procter & Gamble
Utilisation of external sources of technology
IBM
Share patents with collaborators
BMW
Design
Starbucks
In-depth understanding of customers and their cultures
Toyota
Close co-operation with suppliers
Explanations for innovative capability

15. Implications for developing products and services
Role of the market is important
Role of technology is important
It’s a cross functional process
Role of external linkages and networks are important
Skills and knowledge are acquired over time and firms develop competencies
Useful references:
Patel, P. and Pavitt, K. (2000) ‘How technological competencies help define the core (not the boundaries) of the firm’, in
Dosi, G., Nelson, R. and Winter, S. G. (eds) The Nature and Dynamics of Organisational Capabilities, Oxford University Press, Oxford.
Shavinina, L.V. ( ed.) (2003) The international handbook on Innovation, Pergamon, Oxford.
Tidd, J., Bessant, J. and Pavitt, K. (2001) Managing Innovation, 2nd edn, John Wiley & Sons, Chichester.

16. Any questions?
Thanks for listening
I hope you enjoy the unit.