TouchPal Innovation

Learning Objectives Understand the processes for generating innovative business ideas and the role of innovation Identify and critically analyze systems for developing and managing innovation Understand the key roles of innovation including visionary leaders, innovators, champions, entrepreneurs, intrapreneurs and teams

What is Innovation? The successful exploitation of new ideas to realize opportunities Schumpeter’s (1934) Five Types of Innovation: New products or services New methods of production Developing new markets Identifying new sources of supply New forms of organisation Go over what innovation is (and perhaps what it ‘isn’t just’ – It isn’t just creativity, it’s creativity that is applied to new ideas w/in an organization or to start a new business. It is not just a new invention, a one-off, etc. It is often a constant part of a firm’s strategy and is increasingly necessary in an interconnected world where barriers to knowledge and access to other ideas/businesses are decreasing for consumers.

Discussion Questions Why do you think innovation is important to a business? Are there businesses that do not need to innovate? In the past, many organizations have been able to survive even with very limited amounts of innovation. They focus on providing quality products and simply update them to a level that maintains their competitiveness in the market. This method still applies to some products with long lifecycles and few opportunities for innovation.

Who Innovates? Entrepreneurs Intrapreneurs Top-down Bottom-up Entrepreneurs bring innovation to the start-up, but also need to be aware of the need to keep innovating. Intrepreneurs are w/in an organization and see innovative opportunities from within. Bottom up challenges are for managers who need to balance innovation with viability. Top-down, needs to be implementable and need buy-in from the implementers below.

4Ps Of Innovation Space Product Innovation Process Innovation What a company offers its market; changes in a product or service Process Innovation How a company creates the product/offering; Changes in how a product is brought to the market Position Innovation How the offering/product is positioned; Changes in the story a company tells about a product Paradigm Innovation How the company ‘frames’ its offering/product? Changes in the ‘mental model’ underpinning what the enterprise does Product: This one is likely the easiest to picture. Think of car manufacturers coming out with a new model every year or Apple coming out with a new iPhone. It can also be more disruptive, like the first electric car or the first iPad. Process: Think about how services have changed to the way we do things. A few years ago, speaking with someone far away always involved the telephone. VOIP systems mean we can use our computers. Renting a hotel room used to mean using a travel agent to book or calling the hotel directly. Now we have online booking engines, and non-hotel choices like air bnb. The processes can be more behind the scenes, as businesses can improve their logistics internally or can improve their supply chain operation to operate more efficiently. Position: Think about businesses that suddenly targeting different segments of a market (think of a food company switching its target from parents to children with changes in advertising/branding or airlines w’ additional classes of service (economy premium/plus) target a market that no one had tapped (low-cost airlines targeting lower-income travelers, online degree programs) Paradigm may be the hardest to conceptualize from this description. Think of a brand ‘reinventing’ what a concept means to the market. Book sales used to mean a bookstore, but Amazon reinvented it to mean an online marketplace. Dyson reinvented the home appliance market to be one focused on high-technology items. iTunes reinvented what we think of when we conceptualize our music collection. Brands can reinvent what they mean as well- IBM changed from a hardware supplier to a consultancy/services firm and completely sold off its product manufacturing arm. There can be overlap! Francis & Bessant (2005)

4Ps Of Innovation Space: 4 Direction Model Paradigm Mental Model Innovation Product/ Service Process These should not be all thought of as mutually exclusive, rather they all feed into innovation and all can impact one another. Each innovation dimension is on a continuum Position Francis & Bessant (2005)

Case Study: TouchPal Set up in 2008, one of the earliest internet start-ups in China, now serving more than 700 million global users Offering two products. The first one is the TouchPal Keyboard, which is targeted at overseas markets and was the original product. It has over 400 million users globally. It supports over 90 languages, with English being the focus. It also supports many European languages and Chinese. The other product is the TouchPal Phone, with which people can make free calls through the mobile network.

Case Study: TouchPal In their own words: We were discussing the trend of mobile phones in the future. We agreed that the smart phone was the future trend, yet it suffered from the typing experience. We couldn’t stand it anymore. At that time, we felt there was a demand for a better typing experience, so we developed a piece of typing software by ourselves So in my view, as for technology innovation, many entrepreneurs are themselves regular users, who find that current products fail to meet their own demands, so they want to make a better one... I believe that a business model can be proved, while an early disruptive innovation can’t, and that most of the time it relies on instinct and judgement In my view, innovation is composed of many factors, but as I’ve mentioned, the most important of which is curiosity to many things... Innovation gives us a feeling of accomplishment… to our team, we gain the feeling of accomplishment by creating a highly innovative and highly tech-reliant product for universal use. From the perspective of the founders, the DNA of the founders of a company determines the DNA of the company. So I believe innovation is the DNA that flows in our blood

Pre-Video Discussion Can you predict how innovation helps TouchPal create its business? How does TouchPal promote innovation within the company? Where in the 4Ps would you expect to see innovation at TouchPal? Who would you predict is responsible for identifying and implementing innovation at TouchPal?

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Case Study Discussion Questions Map TouchPal’s innovation strategies onto the 4Ps Framework. What is the major difference in the innovation between the two products, Touchpal Keyboard and TouchPal phone? Which product do you think is more innovative and why? What is the difference in the market approach for the two products, Touchpal Keyboard and TouchPal phone? Why is there a difference in the market approach for the two products, Touchpal Keyboard and TouchPal phone? Looking ahead, where should the company focus to improve innovation in its two products? Who are the main individuals involved in innovation at TouchPal? How does the company encourage internal innovations?

References Francis, D. & Bessant, J. (2005) Targeting Innovation and implications for capability development, Technovation, 25 (3), 171-183.