1. Managing Quality, Innovation and Knowledge
Product Innovation

2. Why? Requirements Types
Product Innovation
Why?
Requirements
Types

3. Importance of Innovation
Innovations may confer market dominance
Demand for better & new products always exist
Innovations mean you can charge premium prices
Profit = Price – Cost
Higher P = Higher Price – Same or lower Cost

4. Importance of Innovation
Product innovation is exploited by first mover advantage e.g. Apple
Source:
Source:

5. Importance of Innovation
Continuous innovation leads to business sustainability

6. Importance of Innovation
Innovation reflects globalisation and rapid change in markets
Innovation reflects growth of knowledge and technology transfer

7. Requirements of Innovation
Innovation is knowledge intensive
requires new knowledge & skill
requires different combinations of knowledge and skill
Innovation is difficult to ‘manage’
early closure of product configurations may limit innovation

8. Types of Innovation Revolution Innovations Evolutionary Innovation
Create new, never before seen products
Often based on new technologies
Revolutionary innovations may not find a market becoz:
Fit of products with existing networks
Education of customers
Evolutionary Innovation
A product-based approach
Evolutionary innovation adds new features to existing products
High Design or High Performance features
Evolutionary innovation extends product lifecycles

9. Types of Innovation Continuous and Discontinuous Innovation
A market-based approach
Continuous innovation deepens, expands and extends the market for an existing product
Discontinuous innovation changes the market
Often enters the market in emergent market segments
Often based upon known technologies that are used to meet latent needs

10. Types of Innovation Open and Closed Innovation A firm-based approach
Outside-in
inside-out
Open innovation is outside-in
Work with suppliers, customers, specialised firms
Engage high-end user groups
Use open technological systems
Closed innovation is inside-out
In-house R&D
Give the customer what is designed for them
Exclusive use of technologies

11. Search Strategies Planned or Ad hoc Internal External Hiring-in
Internal mobilisation of R&D, CI
External
Monitoring competitors
Monitoring suppliers
Monitoring industry developments eg. Industry publications, fairs, etc.

12. Creating Product Innovation
Search
Develop
Engage with Users

13. Finding Innovation Talents

14. Search Strategies Stand alone or In association
Local clusters
Open networks eg. Technical societies
Engaging Communities of Practice
global and local linkages are important

15. Product Development Strategies
In-house development
Joint development with business partners
Outsourced development
Licensing
Reverse engineering

16. Product Development Strategies
In-house development leading to enforceable patent works best with simple products e.g. R&D leads to new drug, new device (new flat screen TV)
In-house development leading to a patent works best where imitation is easy

17. Product Development Strategies
Share Resources, Rewards & Risks
Joint development works best where the product is a complex system e.g. aircraft design and development
Complex systems are hard to copy as they contain a lot of tacit knowledge about system properties or how things work together
Competitive Edge

18. Engagement of Users
Educate K
Harness K
Innovations are often unfamiliar and users have to be educated about their functions and features
Users often have tacit knowledge about products that can be mobilised to drive innovation

19. Harnessing Innovation for Competitive Advantage & Community Development
Microsoft Vision 2020 – 5.45 m