1. Innovation Workout Redesign a successful product or service Redifferentiate in the market

2. The Tool: Attribute Segmentation State your challenge. State your challenge. Analyze the challenge and list as many attributes as you can. 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?" and "Why does this have to be this way?" Take each attribute, one at a time, and try thinking of ways to change or improve it. Ask "How else can this be accom­plished?" and "Why does this have to be this way?" Strive to make your thinking both fluent and flexible. Strive to make your thinking both fluent and flexible.

3. Ways of Describing Attributes Common descriptive attributes are: substance, structure, color, shape, texture, sound, taste, odor, space, and density. Common descriptive attributes are: substance, structure, color, shape, texture, sound, taste, odor, space, and density. Common process attributes are: marketing, manufacturing, selling, function, and time. Common process attributes are: marketing, manufacturing, selling, function, and time. Common social attributes are: responsibilities, politics, and taboos. Common social attributes are: responsibilities, politics, and taboos. Common price attributes are: cost to manufacturer, wholesaler, retailer, and consumer. Common price attributes are: cost to manufacturer, wholesaler, retailer, and consumer. Common ecological attributes are: positive or negative impact on the environment. Common ecological attributes are: positive or negative impact on the environment. For example: For example: The attributes of a pencil might be listed as: used for writing, yellow, lead, eraser, sharp, hexagonal, has printing on it, and is cylindricalThe attributes of a pencil might be listed as: used for writing, yellow, lead, eraser, sharp, hexagonal, has printing on it, and is cylindrical

4. The Workout Pick a specific consumer product of your choosing Pick a specific consumer product of your choosing Think through: It’s function The process of using it The objective it is supposed to achieve The Complementary products that are needed for the marketability of this product Make a list of its main attributes Segment each of these into two or more attributes, and think about potential uses and objectives of the segmented attributes

5. The Workout ‘Invent’ two new consumer products ‘Invent’ two new consumer products By reassembling your new attributes into a new productBy reassembling your new attributes into a new product Detail on your presentation Detail on your presentation How they lookHow they look What customer market would buy each invention, and whyWhat customer market would buy each invention, and why How you would expect to commercialize the productHow you would expect to commercialize the product How each innovation will become profitableHow each innovation will become profitable

6. Factors to Consider 1. Commercialization as well as innovation 1. Complementarity and Imitability (especially regarding profitability) 1. What kind of Competences your firm must have or acquire to succeed

7. Definition: ‘Innovation’ An ‘Innovation’ is: An ‘Innovation’ is: Invention + CommercializationInvention + Commercialization Freeman, The Economics of Industrial Innovation Freeman, The Economics of Industrial Innovation A new way of doing things that is commercializedA new way of doing things that is commercialized Porter Porter The new knowledge in an innovation can be either The new knowledge in an innovation can be either Technological, orTechnological, or Market relatedMarket related

8. Complementarity & Imitability Most economically significant modern products have little value by themselves Most economically significant modern products have little value by themselves They require complementary products from many firms to be of valueThey require complementary products from many firms to be of value Petroleum has little use without internal combustion engines Petroleum has little use without internal combustion engines Or Cars without Roads (US Road costs are around $5-10 per gallon of gasoline) Or Cars without Roads (US Road costs are around $5-10 per gallon of gasoline) Or Electricity without Electric Motors Or Electricity without Electric Motors Or iPods without MP3s Or iPods without MP3s … you get the idea … you get the idea What are your ‘Killer Apps’? What are your ‘Killer Apps’? The complements that sell your productThe complements that sell your product

9. Competences Types of Knowledge Four kinds of knowledge underpin an innovation; two are Four kinds of knowledge underpin an innovation; two are TechnologicalTechnological MarketMarket ArchitecturalArchitectural ComponentComponent Incumbents Fail when they Fail to “Get” one or the other type of Knowledge Incumbents Fail when they Fail to “Get” one or the other type of Knowledge

10. Markets and Competences Competences are knowledge assets Innovations, to be successful, must align with the competences and assets of the firm Innovations, to be successful, must align with the competences and assets of the firm The consequences of misalignment are poor production and channel efficiency; and the prospect of rivals outcompeting you. The consequences of misalignment are poor production and channel efficiency; and the prospect of rivals outcompeting you.