1. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 The Cagan / Vogel Innovation Process, Social, Economic, and Technology (SET) Factors and Product Opportunity Gaps Robert Monroe Innovative Product Development January 18, 2011

2. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 By The End Of Class Today, You Should: Understand the five basic steps in the Cagan/Vogel process for bringing an innovative new product to market Be able to use the SET factor model to identify, evaluate, and understand how broad Social, Economic, and Technology changes can create Product Opportunity Gaps (POGs)

3. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Launch * The Cagan and Vogel Innovation Process Realize Conceptualize UnderstandIdentify * The launch stage is not part of the Cagan / Vogel process but it is something we will learn about

4. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Phase 1: Identify The Opportunity Goals: –Identify and evaluate a set of promising Product Opportunity Gap (POG’s) –Choose the most appropriate POG to move forward with Primary results: –Product opportunity statement (hypothesis) –Initial scenario that illustrates the opportunity Methods –Brainstorming, observing, researching Social, Economic, and Technology (SET) factors –Generating POGs based on SET factors –Evaluating and filtering POG ideas generated –Scenario generation, feedback, and refinement Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5. Launch * Realize Conceptualize UnderstandIdentify

5. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Phase 2: Understand The Opportunity Goals: –Much deeper understanding of customer and customer’s Value Opportunities (VO’s), translated into product criteria Results: –In-depth understanding of the customer/user, captured through refined customer scenarios and VOA’s –List of product characteristics and constraints Methods –Primary research: observe, interview, listen, task analysis, stakeholder analysis –Secondary research: human factors, lifestyle reference, dive deeper on SET factor changes Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5. Launch * Realize Conceptualize UnderstandIdentify

6. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Phase 3: Conceptualize The Opportunity Goals: –Turn Value Opportunities into product concepts that are perceived as useful, usable, and desirable –Generate many concepts, evaluate, refine, iterate, reduce to a single concept to move to stage 4 Results: –Clearly articulated product concept –Clear market definition –Visual, and/or physical prototypes that can be shown to and evaluated by potential customers –Demonstration or belief that product is technically feasible Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5. Launch * Realize Conceptualize UnderstandIdentify

7. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Phase 4: Realize The Opportunity Goals: –Develop product or service – move from prototype to product –Complete marketing plan, financing, initial production, etc. –Product or service is ready to be sold to customers Results: –Production processes defined –Go to market plan completed (marketing, positioning, etc.) –Sales channels lined up –Placement and contracts with distributors, retailers, etc. negotiated Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5. Launch * Realize Conceptualize UnderstandIdentify

8. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Phase 5: Launch the Product Goals: –Deliver the product or service to customers –Start generating revenue –Ramp up production –Support organization is up and running Results: –Product or service offering is available to customers –Distribution channels functioning –Sales lead to inbound cash flow Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5. Launch * Realize Conceptualize UnderstandIdentify

9. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 SET Factors and Product Opportunity Gaps

10. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Social, Economic, and Technology (SET) Factors Identifying and observing broad Social and Economic changes in a society can help you discover gaps that current products and services are not meeting. Likewise, Technological advances can create opportunities to create products and services that would have been previously technically impossible –Technological advances often also create new (and different) problems for people or societies, which can also be fertile ground for product opportunities In general, you are looking for broad, enduring changes to use as a basis for new product opportunities

11. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 SET Factors Social Social and cultural trends Reviving historic trends Technical Introduction of new technologies Re-evaluating existing technologies Economic State of the economy Change in focus on where to spend money Levels of disposable income Product Opportunity Gap Source: [CV02] page 9

12. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 SET Factor Exercise Divide into three groups (one S, one E, one T) Work as a group to come up with a list of at least 20 broad forces / changes / trends in the GCC and/or the full Arab League nations for your assigned topic (S, E, or T) Write them down and be prepared to present them for discussion using the whiteboards around the room.

13. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 SET Factor Discussion Do you see some common themes emerging? Which of these SET factors are mostly the same throughout the GCC nations? Throughout the Arab League nations? Which of these SET factors vary considerably throughout the GCC nations? Throughout the Arab League nations?

14. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Product Opportunity Gaps (POG’s) The next step is to identify Product Opportunity Gaps, or POGs based on your SET factor analysis. A Product Opportunity Gap is the gap between what is currently on the market and the possibility for new, or significantly improved, products that result from emerging trends. –Source: [CV02] page xxxi (glossary)

15. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 POG Exercise Let’s pick a specific industry – _____________ Based on the SET factors identified, where should the leading companies in that industry be looking for gaps to fill with innovative new products or services? –Are they doing so currently? –If not, why not? Meet again as S, E, and T groups. Come up with a list of at least 10 POGs for this industry that your group thinks that companies in this industry should be exploring

16. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 Wrap Up

17. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 By The End Of Class Today, You Should: Understand the five basic steps in the Cagan/Vogel process for bringing an innovative new product to market Be able to use the SET factor model to identify, evaluate, and understand how broad Social, Economic, and Technology changes can create Product Opportunity Gaps (POGs)

18. Carnegie Mellon Qatar ©2006 - 2011 Robert T. Monroe Course 70-446 References [CV02] Jonathan Cagan and Craig M. Vogel, Creating Breakthrough Products, Prentice Hall, 2002, ISBN: 0-13-969694-6.