1. Global Innovation Management Electronic Marketing Components of an Entrepreneurial Venture

2. Global Innovation Management Blue-Ocean Strategy create uncontested market space by reconstructing market boundaries

3. Global Innovation Management Blue-Ocean Strategy –Value Innovation »simultaneous pursuit of differentiation and low cost –Strategy canvas, –Four actions framework »reconstructing market boundaries, »focusing on the big picture, »reaching beyond existing demand »getting the strategic sequence right –Eliminate-reduce-raise-create grid »visualizing strategy, noncustomers »launch idea »target costing »overcoming adoption hurdles.

4. Global Innovation Management Innovating to Differentiate and Create a Market Niche An ‘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 either –Technological, or –Market related

5. Global Innovation Management Fundamental Equations Innovation = Invention + Commercialization Capabilities = Assets + Competences In the present economy –Demand is driven by innovation –Supply is constrained by capabilities

6. Global Innovation Management Understanding Innovation Innovation occurs on; –Technology –Market channels and packaging of technology –Architectural rearrangement of existing components –Integration of new component technologies Theories and frameworks precede and motivate commercialization of technology Business models and figures of merit precede innovation

7. Global Innovation Management Innovation = Change Change management is an essential part of innovation management –Change destroys old competitive advantages, And introduces new ones Success requires: –Ability to collect and use information about the competitive environment –The nature of information that can be scanned from the environment

8. Global Innovation Management What the Consumer Sees Overall desirability of features is measured by a figure of merit –A quantity used to characterize the performance of an item relative to other products –often used as a marketing tool to convince consumers to choose a particular brand Unfortunately, each feature carries with it both desirable and undesirable characteristics

9. Global Innovation Management Toolsets Quiz & Organize with a Mind Map Ask Questions: Customer Experience is dynamic Who? … is with customers while hey use the product –How much influence do they have If we could arrange it, who would we want the customer to be with … What? –… Do our customers experience when the use the product –… needs provoked our offering What else? … might customers have on their minds When? … do our customers use this.. Where? … are our customers when they use this How? … do customers learn to use the product.

10. Global Innovation Management Toolsets Overview of Feature Set Prioritize and choose the major features of Beats’ innovation Review the main innovation features with a feature- attribute map for the entire innovation BasicDiscriminatorEnergizer PositiveNonnegotiableDifferentiatorExciter NegativeTolerableDissatisfierEnrager Neutral So What? Parallel

11. Global Innovation Management Toolsets Consumption Chain Analysis Determine the main steps in consumption You should only list the 3 or 4 most important steps These will determine whether the potential customer proceeds to the next step (good) –Or leaves the consumption process (not good)

12. Global Innovation Management Toolsets Feature-Attribute Map the 3-4 Key Steps in the Consumption and Manage those 3-4 Steps Identify Discriminators and Energizers Describe how you will manage each of these features of the consumption process BasicDiscriminatorEnergizer PositiveNonnegotiableDifferentiatorExciter NegativeTolerableDissatisfierEnrager Neutral So What? Parallel

13. Global Innovation Management Recipes, Not more Cooking Big advances in our standard of living have always come from ‘better recipes, not just more cooking’ Economist Paul Romer Innovation is not necessarily about ‘new’ technology, design or marketing. It is about new combinations and configurations of features, limited only by the constraints imposed by existing technology.

14. Global Innovation Management Three Challenges Framing Venture Capital Communication

15. Global Innovation Management The Framing Challenge What Is the Real Business Problem? –Accurately define your customers and what motives them Properly framing a problem in terms of the reality of the situation and the objectives of the organization –is an important step in the decision-making process. –Mental frames act to channel our thinking and are important tools to help navigate complex decisions

16. Global Innovation Management The Venture Capital Challenge What is your business worth, and why? Your new venture competes in two markets: Product Financial How will you tie this to your business model –tying narrative to numbers What are the activities, operations and products? What are the significant environmental influences? –major competitive forces outside management control How does value flow through your business model? What is the Net Present Value of future activities

17. Global Innovation Management The Communication Challenge Provide a ‘lead in’ which will ‘hook’ your listener (the elevator pitch) Provide a brief ‘sales pitch’ presenting the major components of your innovation and business Consider what parts you most want to emphasize about the business model Describe your business in one paragraph (equivalent to the 25 second pitch) –Numbers –Behavioral model and capabilities required –Strategy model –Investment Risk –A summary financial analysis to show risk and ROI for the project Answer your investors question: –Why should I give you My money?"

18. Global Innovation Management Innovation The Key to Successful New Business

19. Global Innovation Management Fundamental Equations Innovation = Invention + Commercialization Capabilities = Assets + Competences In the present economy –Demand is driven by innovation –Supply is constrained by capabilities

20. Global Innovation Management 20 Most Innovative Companies Innovation Premium = NPV (income from existing businesses + plus anticipated growth)- Market Capitalization From Innovators DNA (Harvard Business Press, 2011) Apple for the past several years has topped the list –It delivers great consumer experience with outstanding design But not necessarily that much new technology It has become very profitable in the process How?

21. Global Innovation Management The most innovative companies (Forbes 2015)

22. Global Innovation Management The most innovative companies

23. Global Innovation Management Fast Company’s most innovative companies

24. Global Innovation Management The most innovative companies 10 years ago (Business Week)

25. Global Innovation Management Most Innovative Countries World Bank Statistics

26. Global Innovation Management Why Innovate? Globalization, commoditization and automation make it difficult to be the low-cost high volume provider Innovation is the key to market success for most firms

27. Global Innovation Management Outsourcing The US, Europe, Korea and Japan are increasingly design centers –That rely on production in China and other countries with low labor cost and good infrastructure –But keep most of the profit for themselves This is the predominant business model in the early 21 st century for consumer goods

28. Global Innovation Management Intelligent Commercialization Inventors often get the idea right –But the commercialization wrong –And someone else profits from their invention The dot-com boom of 1995-2001 –Which cost the U.S. economy between $5-10 billion –is an example of the flawed investment that can take place when invention is not matched with intelligent commercialization

29. Global Innovation Management What is Innovation? Innovation = Invention + Commercialization Invention and Commercialization, in turn –Occur where companies and individuals have particular Knowledge or competences, and Assets, including intellectual property Capabilities = Competences + Assets –Capabilities determine where a company can innovate –Assets can be purchased –Competences are more complex

30. Global Innovation Management Commercialization Commercialization depends on managing the customer experience Management starts by defining what the customer thinks is important –The ‘figures of merit’ of the innovation This can be difficult, because many inventions have no obvious use at the time of their invention –Consider the laser, which wasn’t even patented by its inventors –But is now one of the most valuable commercial technologies in history

31. Global Innovation Management Thinking like an Innovator Action oriented Continually learning Make innovation a habit Search for the Applications Profit Risks (technological, market, business) –In every invention

32. Global Innovation Management Innovation is about Making Money

33. Global Innovation Management Return and Fixed Asset Intensity show that Ideas, not Things, have Value

34. Global Innovation Management Waves of Innovation Joseph Schumpeter observed that a healthy economy was not one in equilibrium, but one that was constantly being "disrupted" by technological innovation. Russian economist, Nikolai Kondratieff, drew attention to waves of innovation in 1925, Schumpeter's long business cycles – each unique, driven by entirely different clusters of industries. –water power, textiles and iron in the late 18th century; –steam, rail and steel in the mid-19th century; and –electricity, chemicals and the internal-combustion engine at the turn of the 20th century. –oil, electronics, aviation and mass production, is now in decline –knowledge-intensive industries of semiconductors, fiber optics, genomics and software, powered the expansion of the global economy at the end of the 20th century.

35. Global Innovation Management Changing Jobs

36. Global Innovation Management Innovation Shifts the Economy Shifted Away –from the economics of scarce resources (material, labor) Shifted Towards –Increasing returns economics (information, attention and coordination)

37. Global Innovation Management About the Text Theme: Building the profitable innovation company –Describe tasks –Provide tools –Survey activities –Identify people –Define management

38. Global Innovation Management The Innovation Cycle

39. Global Innovation Management The Innovation Workout Reversing Assumptions Forcing yourself to “think outside the box” This exercise is about reexamining what you think are the –underlying requirements, –objectives and –constraints –of a problem Example: the 9-dot problem –What do you assume are the underlying requirements, objectives and constraints?

40. Global Innovation Management The Innovation Workout Reversing Assumptions

41. Global Innovation Management Workout: Identify the Components of the Apple Watch

42. Global Innovation Management Apple Watch Smartwatch announced on 9/9/ 2014 – fitness tracking –health-oriented capabilities, integration with iOS and existing Apple products and services Available in three models, with a wide variety of case and band options Compatible with the iPhone 5 and later iPhone models running iOS 8.2. Scheduled for release in early 2015

43. Global Innovation Management

44. Tech

45. Global Innovation Management

48. Other Desirable (Expensive) Watches (competitors?)

49. Global Innovation Management Other Desirable (Expensive) Watches (competitors?)

50. Global Innovation Management What makes the Apple Watch a Potential Success? Don’t say ‘The Apple Brand’ … that’s just lame As if Apple just bundles soap Their prior game changing performance is the reason they have the brand … Or will this be a failure (will you buy it?) To answer this question, you need to define (in some commo n language) what exactly the Apple Watch is!

51. Global Innovation Management Hardware? Or What? The Apple Watch can be viewed as a platform. The Apple Watch can be viewed as hardware (a consumer appliance) The Apple Watch can be viewed as software –with the hardware confining the access channels to the software –Like Xbox, or PS4 The Apple Watch could be purely a conduit to access data (time, social, health data)

52. Global Innovation Management Do the Following and Share Make a case for the Apple Watch being either a –Platform –Hardware –Software, or –Conduit to access data (time, social, health data) Describe customers in terms of Quizzing A-Watch product in terms of 3 features Marketing or distribution channels The revenues (money flow) from the A-Watch