1. Global Innovation Management
Toolbox Workout #2

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

3. 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.

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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.