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Innovation Through

Social Media
Innovation Basic Notions

Thomas LECLERCQ, PhD.


Assistant Professor of Marketing
t.leclercq@ieseg.fr

Academic year 2019-2020


What will you learn during this
session?

1. What does innovation mean?


2. What are the dynamics of innovation?
3. What are the strategies of innovation?
4. What are the objectives of innovation?
5. What are characteristics of innovation quality?

Omni-Channel Distribution 10-02-20 2


Introduction
OUTLINE

Innovation at the strategic level

Innovation at the industrial level

Innovation at the operational level

Quizz
Case study

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Innovation Basic Notions
OUTLINE

Innovation at the strategic level

Innovation at the industrial level

Innovation at the operational level

Quizz
Case study

Innovation Through Social Media 10-02-20 4


Innovation Basic Notions
INNOVATION AT THE STRATEGIC LEVEL
Active Strategy Pro-active Strategy
• Defending existing technologies and markets • Having strong research orientation
• Being prepared to respond quickly once markets and • Getting the first mover advantage
technologies are proven. • Being a technology market leader.
• Tend to hedge their bets. • Taking big bets/high risks.
• Examples: Microsoft, Dell and British Airways. • Examples include: Dupont, Apple and Singapore

Reactive Passive Strategy


• Copying proven innovations • Waiting until their customers demand a change in
• Creating step-by-step innovations. their products or services.
• Example: Ryanair, a budget airline which has • Examples: automotive supply companies as they wait
successfully copied the no-frills service model of for their customers to demand changes to
Southwest Airlines. specification before implementing these.

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Innovation Basic Notions (Dodgson et al. 2008)
INNOVATION AT THE STRATEGIC LEVEL

Blue vs. Red Ocean

https://www.youtube.com/watch?time_continue=145&v=2N3XqyuOwIM
https://www.youtube.com/watch?v=5Xd5lvyWMe8
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Innovation Basic Notions
INNOVATION AT THE STRATEGIC LEVEL
Blue Ocean Red Ocean
(First mover advantage) (Second mover advantage)

Less/no Competitive
competition market

Lower costs/
Brand image
lower prices

Higher risk of Controlled


failing environment

Opportunity to Opportunity to
become a benefit from
standard prior efforts

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Innovation Basic Notions
INNOVATION AT THE STRATEGIC LEVEL
Become a standard: Smartspeakers

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Innovation Basic Notions
OUTLINE

Innovation at the strategic level

Innovation at the industrial level

Innovation at the operational level

Quizz
Case study

Innovation Through Social Media 10-02-20 9


Innovation Basic Notions
INNOVATION AT THE INDUSTRIAL LEVEL

Technological Market
Serendipity
Research Research

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Innovation Basic Notions
INNOVATION AT THE INDUSTRIAL LEVEL
Market Dynamics (Market Pull)

A robust opportunity
Integrated technical
Market assessment implies to
take into account the
choices and market proposed/ competition
assumption leads to the technologies and the
opportunity Technology proposed and
competition market

Technology Dynamics (Tech. Push)

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Innovation Basic Notions
TECHNOLOGY DYNAMICS

Physical Limit

Breakthrough
Major technical
obstacles are
overcome

Saturation
Reach the
physical limit
Pionneer
First exploration

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Innovation Basic Notions
TECHNOLOGY DYNAMICS Under-served customer
needs

New technology

Mainstream customer
needs

Existing technology Over-served customer


needs

New technology

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TECHNOLOGY DYNAMICS Under-served customer
needs

New technology

Mainstream customer
needs

Continuity vs. discontinuity Over-served customer


Existing technology
needs

New technology

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CASE: NINTENDO

• Created as a playing card company


in 1889
• Created the first video game in 1978

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Innovation Basic Notions
WII: https://www.youtube.com/watch?v=qAka9mi9kzQ
PS2: https://www.youtube.com/watch?v=se21W6fJdIM

CASE: NINTENDO

• Playstation 2 (Sony) was more popular that


the Xbox (Microsoft) and the Nintendo
GameCube in 2000
• In 2005, Playstation and Microsoft
improved their consoles

… Nintendo launched the Wii

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Innovation Basic Notions
CASE: NINTENDO
Ex: Game Consoles

Screen Graphics capacity

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Innovation Basic Notions
CASE: NINTENDO
The Wii was less performant but it became the most
popular Nintendo home console of all time with more
than 100 million devices sold.

 switch to a a new curve (innovation discontinuity)

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Innovation Basic Notions
TECHNOLOGY DYNAMICS
• Tool for locating the company and its technological trajectory
• Implies to identify the appropriate performance measure
• Not magic:
• Effort ≠ time
• The curve may significantly differ from one to another technology (ex: Moore Law)

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Innovation Basic Notions
TECHNOLOGY DYNAMICS

Moore Law

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Innovation Basic Notions
INNOVATION AT THE INDUSTRIAL LEVEL
Market Dynamics (Market Pull)

A robust opportunity
Integrated technical
Market assessment implies to
take into account the
choices and market proposed/ competition
assumption leads to the technologies and the
opportunity Technology proposed and
competition market

Technology Dynamics (Tech. Push)

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Innovation Basic Notions
MARKET DYNAMICS
INNOVATION DYNAMICS

Need to see the Sensitive to social


Select the benefits pressure
technologies, they
Make decisions
use and advocate
based on past
experience and
Want discover
they are sensitive
new things even if
to the price
they fail

We do not adopt technologies at the same moment and for the same reason!
What are the motives to adopt a new technology?

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Innovation Basic Notions Rogers, 1991; Venkatesh et al. 2003
MARKET DYNAMICS
Adopter group Characterics of consumers Characteristics of technology
Innovators Techies: • Slow performance
• Like technologies for its sake • Bugs
• Tolerant to bugs • Little functionality
• High willingness to pay • No documentation
Early adopter Visionaries: • Bugs are fixed
• Seeking advantage through • Risky project
new technologies • Pilot project
• Demand customization and • Customization
close contact
• High willingness to pay
Early majority Pragmatists: • Measurable and reliable
• Evolution rather than technology
revolution • Standardized quality
• Require documentation • Infrastructure and support
• More cost-sensitive
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Innovation Basic Notions
MARKET DYNAMICS
Adopter group Characterics of consumers Characteristics of technology
Late majority Conservatives: • Simple plug and play solution
• Seeking demonstration of ROI
• Look for similar references
• More cost-sensitive
• Evolution
Laggards Luddites: • Simple plug and play solution
• Low willingness to pay
• Commodity technology

Value is created when technology meets customer needs


Needs change over time and new technologies are developped
 We need to understand customers' needs
 Need to manage the transition from a technology to another
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Innovation Basic Notions
MARKET DYNAMICS

EXAMPLE
• At which stage do you classify the Hoverboard
technology?
Early adopters

• What would you recommend to a company selling


Hoverboards?
Training to use the technology
Testimonials of users to demonstrate the quality

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Innovation Basic Notions
MARKET DYNAMICS
Unified Theory of Acceptance and Use of Technologies

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Innovation Basic Notions
MARKET DYNAMICS
… and after the adoption? Churn rate

The fastest game to hit the $ 500 millions in revenue (60 days)

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Innovation Basic Notions
MARKET DYNAMICS

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Innovation Basic Notions
MARKET DYNAMICS

Why?
• Lack of social interaction
• Community belongingness
• Network dynamism

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Innovation Basic Notions
OUTLINE

Innovation at the strategic level

Innovation at the industrial level

Innovation at the operational level

Quizz
Case study

Innovation Through Social Media 10-02-20 30


Innovation Basic Notions
INNOVATION AT THE OPERATIONAL LEVEL

CONCEPT
Existing New

New Architectural Innovation Radical Innovation

Existing Incremental Innovation Disruptive Innovation

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Innovation Basic Notions
INNOVATION AT THE OPERATIONAL LEVEL
CONCEPT
Existing New
Architectural Innovation Radical Innovation

New A new product in which known components, An innovation that draws on novel methods or
based on existing technologies, are materials, is derived either from an entirely
reconfigured in a novel way to attack new different knowledge base or from a
markets. recombination of the existing knowledge bases
with a new stream of knowledge.
Existing Incremental Innovation Disruptive Innovation

An innovation that squarely builds on an An innovation that leverages new technologies


established knowledge base and steadily to attack existing markets from the bottom up.
improves an existing product or service.

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Innovation Basic Notions
INNOVATION AT THE OPERATIONAL LEVEL
 Evolution
CONCEPT  Opportunities and risks
Existing New
Architectural Innovation Radical Innovation

New A new product in which known components, An innovation that draws on novel methods or
based on existing technologies, are materials, is derived either from an entirely
reconfigured in a novel way to attack new different knowledge base or from a
markets. recombination of the existing knowledge bases
with a new stream of knowledge.
Existing Incremental Innovation Disruptive Innovation

An innovation that squarely builds on an An innovation that leverages new technologies


established knowledge base and steadily to attack existing markets from the bottom up.
improves an existing product or service.

Innovation Through Social Media 10-02-20 33


Innovation Basic Notions
INNOVATION AT THE OPERATIONAL LEVEL
CONCEPT
Existing New
Architectural Innovation Radical Innovation

New A new product in which known components, An innovation that draws on novel methods or
based on existing technologies, are materials, is derived either from an entirely
reconfigured in a novel way to attack new different knowledge base or from a
markets. recombination of the existing knowledge bases
with a new stream of knowledge.
Existing Incremental Innovation Disruptive Innovation

An innovation that squarely builds on an An innovation that leverages new technologies


established knowledge base and steadily to attack existing markets from the bottom up.
improves an existing product or service.

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Innovation Basic Notions
Create an incremental, disruptive, radical and architectural innovation based on a pencil!

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Consumers Contributions to the Innovation Process
INNOVATION AT THE OPERATIONAL LEVEL

Feasibility
Refers to the firm’s ability to develop a
product based on the idea
Innovativeness
Refers to the novelty of the idea in
comparaison to existing offers

Relevance
Refers to opportunity for the firm to
generate profit from the development of
the idea

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Innovation Basic Notions
WRAP-UP

Innovation at the strategic level


• Active/reactive/proactive/passive strategy
• First mover vs. Second mover advantage

Innovation at the industrial level


• Technology dynamics: physical boundaries and (dis)-continuity
• Market dynamics: innovation adoption, diffusion and continued usage

Innovation at the operational level


• Technology dynamics
• Market dynamics

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Innovation Basic Notions
OUTLINE

Innovation at the strategic level

Innovation at the industrial level

Innovation at the operational level

Quizz
Case study

Innovation Through Social Media 10-02-20 38


Innovation Basic Notions
Omni-Channel Distribution 10-02-20 39
Introduction
QUIZZ 1

Link:
https://b.socrative.com/login/student/
Is it an assignment? NO
LECLERCQ8652
10-02-20 40
OUTLINE

Innovation at the strategic level

Innovation at the industrial level

Innovation at the operational level

Quizz
Case study

Innovation Through Social Media 10-02-20 41


Innovation Basic Notions
The mobile phone industry is an incredibly innovative segment within the ICT sector and the smartphone has
become the ultimate gadget that combines the capabilities of a TV, a camera, a music player, a gaming
system, an instant messaging service, a PDA and much more.

The first smartphone technology has been launched in 1995 by IBM. However, it was introduced to the
market about a decade ago. This device was a revolutionary transformation from the simple mobile handsets
used by people. The conventional handsets had limited functionalities apart from calling and sending
messages. The smartphones were a big leap in technology that allowed people to use high speed internet to
perform a variety of activities such as booking cabs, flight & movie tickets, scheduling doctor’s appointments
to even reading books online amongst others. People started switching over from conventional handsets to
smartphones over time.

Nowadays, lots of brands have launched their smartphones on the market: Nokia, Samsung, Windows, HTC,
etc.

A quick Google search for “volume of smartphone market” found a study from Statista, which estimates that
over 1,5 billion smartphones are sold to end consumers every year.

Technical change and new product proliferation have made this industry extremely dynamic, even if market
shares are highly concentrated in the hands of very few companies. Indeed, the first brand name that comes
to mind when we think of smartphones is, of course the iPhone. Apple, the maker of iPhones, can rightly be
said to be one of the pioneers of the smartphone. Apple earned a strong brand recognition for the iPhone
and had strong hegemony over the smartphones market for several years after the first iPhone was
introduced in 2007. The iPhone has always recorded more than 15% market share for most of its tenure with
occasional peaks crossing 20%.

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Innovation Basic Notions
You want to launch the
next generation of
Smartphone. Therefore,
you manage a team of
developpers but they
need a strategy and
ideas.

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Innovation Basic Notions
PROJECT-QUESTIONS

1. Discuss the smartphone in terms of innovation at the strategic level


for IBM (in 1995) and then for Apple  Innovation strategy
2. Discuss the smartphone today in terms of innovation at the
industry level (for market and technology dynamics) Diffusion
and innovation curve
3. Discuss the smartphone in terms of innovation at the operational
level.
4. Suggest ideas for the next generation technology

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Innovation Basic Notions

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