1. Opportunity identification and selection
Product and Innovation Management
Topic 3

2. Inputs to product innovation strategy
1. From top level
- Mission statement
- Product platform
2. From functional level
- Product innovation team
3. From lower level
- Employees, etc

3. Product platform
Share similarities in design, development or production process
Common in many industries, such as aircraft, consumer electronics, microprocessors, computers, power tools, ATM
Involve trade-off between distinctiveness and cost efficiency
Its adoption is widely different between companies
Examples: Sony, Boeing, P&G, Intel, Black and Decker, IBM

4. Some guidelines on how to identify and select opportunities
1. What are the emerging trends, if any?
2. What are the fringe markets, if any, that can become mainstream in near future?
3. What are the bottlenecks, if any, in the industry, product, or manufacturing process?
4. What are/should be the core competencies of our company?

5. Characteristics of core competencies
1. Embedded deeply in the company’s routines, procedures and people, and difficult to be imitated
2. Focused on the benefits brought to the customers
3. Can be deployed to access a wide variety of very disparate market opportunities

6. Apple – Example 1 of core competencies
Consider
1. Difficulty in being imitated
2. Benefits to customers
3. Access to other businesses

7. Honda – Example 2 of core competencies
Snow-blowers
Motor-cycles
Small cars
Lawn mowers
Small engine technology
Superior R&D
Superior manufacturing
Superior marketing & knowledge of customers
Corporate culture

8. What are/should be the core competencies of our company?
Defy conventional logic in making business decisions
Conventional logic: ROI, payback period
Example: Wal-Mart

9. Beware of core rigidities!
Ingrained routines, procedures, preferences for information sources, existing views of the market, …
Strangle a company’s ability to examine the viability of an unfamiliar technology

10. Techniques to avoid core rigidities – 1. Creative destruction
‘No one is more blind that he who does not wish to see’
Proactively develop the next-generation technology
Willingness to cannibalize!!!
Example: Microsoft

11. Techniques to avoid core rigidities – 2. Corporate imagination
To continuously replenish the company’s stock of ideas
Ability to create a vision of the future consisting of currently non-existing markets
A horizon not confined by the boundaries of the current business

12. Nurturing corporate imagination – 1
Nurturing corporate imagination – 1. Overturn price-performance assumptions
Don’t devote all the efforts to improving performance on existing paradigm
Look for potentially lucrative new paradigm
Example: Moore’s Law on semiconductor
Apply Technology Life Cycle and Law of Diminishing Performance Returns to Increasing Investments in Current-Generation Technology

13. Technology life cycle
Performance
Limit of particular technology
time

14. Nurturing corporate imagination – 2
Nurturing corporate imagination – 2. Escape the tyranny of the served market
Tendency to develop more incremental innovations for existing customers
But customer needs may change over time and may need to be solved in radically different ways

15. Nurturing corporate imagination – 3
Nurturing corporate imagination – 3. Use ‘future market’ research techniques
Conventional market research techniques such as focus group and questionnaire survey are not good at researching future market
Use lead user technique and emphatic design technique

16. Nurturing corporate imagination – 4. Get out in front of customers
Don’t rely wholly on customers’ feedback information
Lead the mainstream customers