INNOVATION AXES Market Product Technology Manufacturing Technology Process

INNOVATION AXES Market Product Technology Manufacturing Technology (Process) Product

MEDINOL

Market Driven Innovation Market Product Technology Manufacturing Technology Product

Generations of Products Picture 8. 1: First Generation Picture 8. 2: Second Generation Picture 8. 3: Third Generation

PHASE I Market Driven Innovation Water Saving Drip Technology Manufacturing Technology Drippers

PHASE II Water Saving Drip Technology Manufacturing Technology Drippers Product Driven Innovation

PHASE III Market Driven Innovation Growth Control Technologies Drip, Liquid Fertilizers Polymer, Control Manufacturing Technology Feeding System

Market Product Technology Driven Innovation Manufacturing Technology Product Driven Innovation

DISC O TECH Fixion™ IM (Intramedullary) Nail Fixion™ IL (Interlocking) Nail

DISC O TECH THE B-TWIN EXPANDABLE SPINAL SYSTEM B-Twin Reduced Configuration (5 mm diameter) Post-Operative (after B-Twin Expanded expansion) Configuration (up to 15 mm diameter) Anterior-Posterior View

Market Driven Innovation Technology Driven Innovation Corning Glass Fiber optics Apple IBM PC 3 M Post it Seagate-Conner 3. 5 HDD Sony-Philips Compact Disk Nike : Tc: nylon, Tn: Max Air, Max chock Raytheon Microwave Laser, Bell Labs Manufacturing Driven Innovation IKEA – LACK table and Honeycomb, Ogla and Product Driven Innovation

WHY CONTINUOUS/DISCONTINUOUS INNOVATION? Continuous Innovation • Existing infrastructures • Existing knowledge • Existing markets • Incremental • Convergent thinkingprogressive refinements • Increasing specialization Discontinuous Innovation • Discovery of new knowledge related to market need or technological capabilities • From horse to car • Business reshaping: kerosene for lighting; ice for cooling; IT+telecom and airline, banking, entertainment

PRINCIPLES OF DISRUPTIVE TECHNOLOGY Good Management is the reason that companies fail because they listened to customers wants and needs , invested in technology to support customers and subsequently lost market leadership (Christensen, 1997) • Companies depend on customers and investors. • Small market don’t solve problems of large firms. • Market that dont exist cannot be analyzed • Technology supply may not equal market demand • Disruptive technologies are lower performing • Companies overshoot their market with technology • IBM survived the move to PC’s • More experienced firms made better decisions

SOURCES OF DISCONTINUITY New market PC, Mobile phone New technology Photo and digital images New political rules Free trade, Communism Running out of road Kodak Change in market-behavior Apple, Mc. Donalds Deregulation Telecom, airlines Rules of the game change Amazon, cell phone Architectural innovation Photo-lithography in chip

CELL PHONES FORECASTING FOR AT&T Cell phone quantity 17 Millions 900, 000 1984 1994 2000 Time

R&D GENERATIONS 1 st Generation : • Unbounded search for scientific breakthrough • Leap from current to new knowledge • Breakthrough inventions 2 nd Generation • Applicability • Project management • Fusion innovations

R&D GENERATIONS 3 th R&D Generation • Marketing role: determine customer needs • R&D role: supplies technology • Continuous innovation: experience, expectations walls Fig. 1. 7 4 th R&D Generation • Mutually dependent learning • Market evolution: Competitive architecture • Broader mission for R&D • Organizational capability • Fusion & Discontinuous Innovation: beyond the walls. Fig. 1. 8, 1. 9, 1. 10

3 rd GENERATION & CONTINUOUS INNOVATION Market Knowledge Wall of Experience Continuous Innovation Pc, Mc, Tc Wall of Expectations Scientific & Technical Knowledge

DISCONTINUOUS INNOVATION Market Knowledge Mn, Tc Mn Tn Wall of Experience Mc. Tn Pc Tc Mc Wall of Expectations Scientific & Technical Knowledge

FUSION INNOVATION Market Knowledge Market Fusion Market & Technology Fusion Wall of Experience Technology Fusion Wall of Expectations Scientific & Technical Knowledge

MARKET & TECHNOLOGY FUSION Market Fusion • Milk + Juice Drinks • Cheese + others for breakfast • Printer+ Scanner+Fax for new applications • Telephone + TV • Cell phone + Portable Computer Technology Fusion • Optics-Electronics. Microscope • Fiber optic + laser • Laser + Audio • Composite Materials

Market Knowledge Target zone: new technology, latent need Wall of Experience Wall of Expectations Scientific & Technical Knowledge

PERFORMANCE IMPROVEMENT INDUSTRY VERSUS CUSTOMER Product performance High-end markets B Trajectories – customer needs performance Disruptive technology A Low-end markets Time

DISCONTINUOUS INNOVATION AND BUSINESS STRATEGY Nokia forest eqpt-paper Cell phone, to morrow? Vodaphone steel tubes Cell phone services Tui mining Travel group (Thomson) Kodak Palm

PC- DISRUPTIVE TECHNOLOGY

EVOLUTIONARY THEORY Nelson and Winter: The core concern of evolutionary theory is with the dynamic process by which firm behavior patterns and market outcomes are jointly determined over time Theory of dominant design Single basic architecture that becomes the accepted market standard (Anderson-Tushman) Punctuated Equilibrium Periods of of incremental change, punctuated by breakthrough • New comers initiate competence • Major tech innovations • Competitive turmoil • Boeing 247, 707, 747 Jolty theory of change Abrupt alterations in environments Disruptive Technology Source: Ettlie J. E. (2006) Managing Innovation Elsevier p 70 -84

Source: Tidd J. Bessant J. Pavitt K. (2006) Managing Innovation, John Wiley and Sons 173 p

THE CORE COMPETENCE OF THE CORPORATION CK Perahalad G/ Hamel END PRODUCTS BUSINESS UNITS CORE PRODUCTS COMPETENCIES

INNOVATION STRATEGIES • Miles & Snow(78) • Freeman(82) Defenders, Prospectors, Analyzers Offensive, Defensive, Imitative, Dependent, Traditional Opportunistic • Ettlie and Bridges(87) Aggressive technology policy Long term investment in technological solution Planning human resources for it Openness the environment Structural adaptation • Kerin et al (92) First movers Ettlie J. E. (2006) Managing Innovation Elsevier p 111 -114

THE AGGREGATE PROJECT PLANNING FRAMEWORK Technology change Radical Breakthrough Next generation Platform Derivative Improvement Product support Base New market New Customer More sales Impact on Market Replace current product

LINEAR MODELS OF INNOVATION Technology Push Starting Point Science and Technological Technology Developments R&D Needs of the Marketing Market Manufacturing

Market(ing) ? Pull Starting Point Scientific Knowledge Market Technology Concept Product Development Production

MARKETING PULL-TECHNOLOGY PUSH MP: New market services and goods that seek new technology TP: New ideas in technology that seek applications System Technology Map: Robot Technology Push Marketing Pull Manipulation & Control Automobile Sensing: Vision, Tactile Aerospace Internal Communication Electronics Environment Communication

TECHNOLOGY PUSH NEED PULL COMPARED Technology push • Start with what easily can be researched • Address the need of the atypical user • Get locked into one technical solution Need Pull • Looks at needs that are easily identified • Continue to change the definition of the opportunity • Lack a champion a true believer

SIMULTANEOUS COUPLING MODEL Manufacturing R&D Marketing

An Overview of Innovation in Landau and Rosenberg (Eds )The Positive Sum Strategy Washington DC National Academy of Sciences

INTERACTIVE MODEL OF INNOVATION Scientific & Technological Knowledge Idea R&D Manufacturing Technology Push Product Marketing Innovation Marketing Pull Market Knowledge

NETWORK MODEL Freeman C. (1992) Network of Innovators, a synthesis of research issues in Freeman C, The Economics of Hope London Pinter 93 -120

R&D Production Marketing Finance Internal Environment External Environment

Tidd J. Bessant J Managing innovation John Wiley 2006 p 287

Tidd J. Bessant J Managing innovation John Wiley 2006 p 304

Tidd J. Bessant J Managing innovation John Wiley 2006 p 338

TECHNOLOGY POLICY AND COMPETITIVE STRATEGIES Cost leadership Differentiation Focus segment Cost –diff Product Reduce cost, technology efficiency change Quality, features Designperformance Process Economies of technology scale change Quality, faster Tune productiondelivery Porter M. E. “The Technological Dimension of Competitive Strategy” Research on Technological Innovation Management and Policy 1 (1983) pp 1 -33

THE INNOVATION MAP Mn Mfn Mc Mfc M Mf The Firm/ Product T Tc P INTERNAL ENVIRONMENT Tn Pc Pn EXTERNAL ENVIRONMENT

KNOWLEDGE AXES AND GATE KEEPERS ` Mn Mfn M Mc Mf T P Pc Tc INTERNAL ENVIRONMENT Tn Pn EXTERNAL ENVIRONMENT Knowledge axis Gate Keeper

PHASES IN MARKET LIFE CYCLE AND INNOVATION BASIS OF COMPETITION Sales Functionality Reliability Early Growth Convenience Price Mature Time

DISK DRIVE PERFORMANCE MET MARKET NEEDS 3000 MB 14 inch 200 Mainframe 8 inch 30 5. 25 inch A 10 6 Capacity Provided HDD invade to B minicomputer HDD invade to Capacity Demanded 3. 5 inch C Source: Christiansen p 16 HDD invade to Portable Computer PC 74 78 80 85 90

TIME OF ADOPTION OF INNOVATION (Roberts) TECHNOLOGY ADOPTION LIFE CYCLE Innovators Early Majority Late Majority Laggards Adopters 2. 5% 13. 5% 34% Visionary Pragmatist 34% Conservative 16%