1. Trade-off Workout
Goal: Design a video Game Console using Morphological boxes
Method: Write its Business Model and estimate the value from commercializing your innovation

2. Mismatch of Capabilities and Markets
In the Mad Catz case we saw that Consumer Value (what consumers are willing to pay us) and Production Cost are often only loosely correlated
Intelligent Design, then, requires that we give more weight to expenditures in some of the product Components than others

3. Your Task Design a game console using Morphological Boxes
The next slide gives the features that your capabilities allow you to produce
particular components (chosen from columns)
with a given feature set (chosen from rows)
Each adds some market value, and some production cost

4. Feature Choices Features Components Package Console Casing Electronics
Screen
Connectivity
Features
Recycled Paper
Cheap Plastic
Basic
NTSC TV
Wired
Colored plastic
Hard Plastic
+Vibration
PAL/multi
Infrared
Cloth case
Lexan
+Motion Sensor
1024x768
Wi-Fi
Hard Shell
Brushed Metal
+Television
1280x1024
+Internet
Metal with Velvet cushion
Two-tone Clamshell
+Body Suit
1080i (i.e., 1920 × 1080 / 2 interlaced)
+Other Consoles

5. Unit Profit
Your marketing department has determined your customers’ valuation of features (their Willingness to Pay or W-to-P)
Your production department knows the cost of these features
You need to choose the combination of features that will yield the greatest profit

6. Volume
In addition, your accounting department has determined how overall price influences (reduces) sales volume
Volume (units) = ($700 – Sales Price)*10,000

7. Feature Costs and Potential Revenue
Following slide breaks a game console into its feature costs and potential revenue
Represented as a Morphological Box
Profit depends not just on unit profit, but volume of sales
The more expensive the entire product, the lower the sales volume

8. Morphological Box The 5x5 box below gives For a particular feature
Cost of providing, and
Willingness-to-pay (i.e., maximum price)
For a particular feature
Mix and match features for the most profitable console

9. To Present What is the feature set of your most profitable product?
What would you call this product?
Is it high end, low end, or intermediate?
Who are your competitors?
What are substitute products for this one?
How can you increase the volume of sales? (think of complements)
Draw your Business Model with bubbles, arrows and boxes