1. Global Innovation Management
Toolbox Workout #4

2. Design a video game console using morphological boxes
GOAL
Design a video game console using morphological boxes
METHOD
Write its business model and estimate the value from commercializing your innovation

3. Quick revision session: Mismatch between capabilities and markets
In the Mad Catz case (chapter 4) we saw that consumer value (what consumers are willing to pay us) and production cost are often only loosely correlated
Therefore intelligent design requires that we give more weight to expenditures in some of the product components than others

4. Your product: feature choices
The table below shows the features (in rows) and components (in columns) of your potential video games console
Each feature adds some market value and some production cost
Components
Package
Console Casing
Electronics
Screen
Connectivity
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
Features

5. Your task: the first two factors
Choose the combination of features that will yield the greatest profit
You should base your choice on three key factors:
Your marketing department’s assessment of your customers’ valuation of the product features (their willingness to pay or W-to-P)
Your production department’s assessment of the cost of these features
Data on each of these features is represented in the morphological boxes beginning at slide 7. But first, the third factor …

6. Your task: the third factor
3. Your accounting department has determined how overall price influences (reduces) sales volume:
Volume (units) = ($700 – Sales Price)*10,000
Therefore, the most profitable solution depends not just on unit profit, but volume of sales
The more expensive the entire product, the lower the sales volume

7. Morphological box 1: Packaging
For each feature, the morphological boxes on the next five slides show the cost of feature, and customers’ willingness-to-pay (i.e., maximum price)
Mix and match features for the most profitable console – not forgetting to take factor three (overall price vs. sales volume) into account
Package
Type
W-to-P
Cost 1
Recycled paper 3 2
Coloured plastic 12
1.5
Cloth case 24 4
Hard shell 45 15 5
Metal with velvet cushion 50 34

8. Morphological box 2: Console casing
Material
W-to-P
Cost 1
Cheap plastic 3 2
Hard plastic 7
Lexan 12 6 4
Brushed metal 35 5
Two-tone clamshell
120 24

9. Morphological box 3: Electronics
Features
W-to-P
Cost 1
Basic 15 2
+ vibration 3 25
+ motion sensor 16 40 4
+ television 35
160 5
+ body suit
120
600

10. Morphological box 4: Packaging
Screen
Resolution
W-to-P
Cost 1
NTSC TV 30 10 2
PAL/multi 40 3
1024x768 4
1280x1024 60 5
1080i (ie 1920x1080 / 2 interlaced) 45
100

11. Morphological box 5: Connectivity
TV and internet
W-to-P
Cost 1
Wired 10 2
Infrared 25 5 3
Wi-Fi 30 4
+ internet 45
+ other consoles 60

12. Presentation Prepare a presentation detailing the following:
The feature set of your most profitable product
The name of the product
Whether the product is high end, low end, or intermediate
Who your competitors are
Your product’s substitute products.