Global Innovation Management Toolbox Workout #2

Redesign a successful product or service GOAL Redesign a successful product or service METHOD Re-differentiate in the market using attribute segmentation

Your tool: Attribute segmentation State your challenge. Analyze the challenge and list as many attributes as you can. Take each attribute, one at a time, and try thinking of ways to change or improve it. Ask: How else can this be accomplished? Why does it have to be this way? Strive to make your thinking both fluent and flexible.

Ways of describing attributes Attributes fall into different categories: Descriptive – eg substance, structure, color, shape, texture, sound, taste, odor, space, density Process – eg marketing, manufacturing, selling, function, time Social – eg responsibilities, politics, taboos Price – eg cost to manufacturer, wholesaler, retailer, consumer Ecological – eg positive or negative impact on the environment Example The attributes of a pencil might be listed as: used for writing, yellow, lead, eraser, sharp, hexagonal, has printing on it, cylindrical

Your task: Attribute segmentation (1) Pick a specific consumer product Think through: Its function The process of using it The objective it is supposed to achieve The complementary products that are needed for the marketability of the product Make a list of its main attributes

Your task: Attribute segmentation (2) Segment each of your product’s main attributes into two or more attributes Think about potential uses and objectives of the segmented attributes ‘Invent’ two new consumer products by reassembling your new attributes into a new product

Presentation Prepare a paper which details the new consumer products. Include the following: How they look What customer market would buy each invention, and why How you would expect to commercialize the product How each innovation will become profitable

Factors to Consider Commercialization as well as innovation Complementarity and imitability (especially regarding profitability) What kind of competences your firm must have or acquire to succeed

Quick revision session: Innovation Innovation is: Invention + Commercialization (Freeman, The Economics of Industrial Innovation) A new way of doing things that is commercialized (Porter) The new knowledge in an innovation can be: Technological Market related

Quick revision session: Complementarity Most economically significant modern products have little value by themselves - they require complementary products to be of value. For example: Petroleum has little use without internal combustion engines iPods have little value without MP3s Your killer apps are the complements that sell your product

Quick revision session: Competences Competences are knowledge assets Four kinds of knowledge underpin an innovation: technological, market, architectural and component Incumbents fail when the don’t ‘get’ one or the other type of knowledge For innovations to be successful they must align with the competences and assets of the firm. The consequences of misalignment are: Poor production and channel efficiency The prospect of rivals out-competing you.