BUSINESS OPERATION ANALYSIS

INNOVATION AND IDEA FUNNELING

CGU, October 24th, 2017

 Presentation Outline

INNOVATION- INNOVATION &

The concept BUSINESS LIFE
CYCLE

INNOVATION INNOVATION
PROCESS STRATEGY

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INNOVATION THE
CONCEPT
JENNY CHEN

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Definition of Innovation

A new idea, or more-effective device or process.

Meet new requirements, unarticulated needs, or existing

market needs.

More effective products, processes, services,

technologies, or business models that are readily available
to markets, governments and society.
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 Innovation & Creativity

Creativity
Innovation

EXECUTING THE IDEA

Invention
Discovery

COMING UP WITH THE BIG IDEA

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Types of Innovation

Radical Innovation VS. Incremental

Innovation
Component Innovation VS. Architectural
Innovation
Product Innovation VS. Process Innovation
Other types of innovation
Disruptive Innovation
Business model innovation
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 Types of Innovation

The radicalness of an innovation is the degree

Radical Innovation to which it is new and different from previously
existing products and processes.

Involve only a minor change from (or Incremental Innovation

adjustment to) existing practices.

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 Types of Innovation

Radical Innovation Incremental Innovation

Explores new Technology Exploits existing technology
High uncertainty (Market, Low uncertainty
technical, organizational,
resources)

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 Types of Innovation

Radical Innovation Incremental Innovation

Focuses on products, processes Focuses on cost or feature
or services with improvements in existing
unprecedented performance processes, products or
features. services
Creates a dramatic change Improvement.
that transforms existing
Competitiveness within
markets or industries, or
current markets or
creates new ones.
industries.
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 BUSINESS MODEL INNOVATION

The development of new, unique concepts supporting an

organization's financial viability. (including its mission, and the
processes for bringing those concepts to fruition)
The primary goal is to realize new revenue sources by improving
product value and how products are delivered to customers.

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INNOVATION &
BUSINESS LIFE CYCLE
JASMINE LEE

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 Market
Solution
Phase 1: Ideas
Concept

An unfulfilled customer requirement.

A problem with the customer. Decline

A possible new market.

A new technical solution.

The conclusion of the first phase makes the idea

Idea assessment.

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 Phase 2: Concept Market
Solution

Concept
Market and customer requirements.
Market potential.
Decline
Chances.
Risks and feasibility.
Framework conditions.

In order to release the idea or concept

Idea
for the next phase, a concept evaluation
is necessary.
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 Market
Phase 3: Solution Solution

Concept
Aim: develop a ready-to-
use solution that can be Decline
brought to the market.

- Once the solution has

reached maturity, it will
beIdea released for
implementation and
marketing.
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 Market
Phase 4: Market Solution

Concept
The last phase is about bringing the
product to the potential customers. Decline
physical availability
the customer is aroused and then
fulfilled
At the end of the innovation phases, the new
product
Idea
is transferred to product lifecycle
management in the responsibility of product
management.
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4 PHASES OF INNOVATION IN
CONCLUSION

Innovative processes after phases are indispensable.

If there were no processes and phases, one would orientate
without orientation constantly back and forth rather than
focused on the goal.

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Important of Innovation in
Industry 4.0

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 INDUSTRY 4.0

1st 2nd 3rd 4th

mechanization mass
of production production with digital computerization
using water and the help of revolution of manufacturing
steam power electric power
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 Digitali
-zation

INDUST
RY 4.0 IIoT CPS

Connectiv
-ity &
Big Data
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Cyber-physical systems 20
INFRASTRUCTURE IOT, CONNECTIVITY AND BIG
DATA

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Consumers are the driving force behind
Industry 4.0

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INNOVATION
PROCESS
AMY WANG

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INNOVATION PROCESS

Idea Generating
Idea Screening
Concept Development & Testing
Business Analysis
Product Development
Test Marketing
Commercialization
 INNOVATION PROCESS

1st Idea Generating

Forming the concept of the new product
Many ideas coming from different aspects
Ex. SWOT analysis - Realizing internal and external situation of the company
Market research - Focusing on the customers needs and wants
 INNOVATION PROCESS

2nd Idea Screening

Censoring the ideas which are unsuitable, unaffordable and so on by setting
specific criteria.
Screening area: Setting by different kind of considerations
- ROI
- Affordability
- Market potential
 INNOVATION PROCESS

3 rd. Concept Development & Testing

Testing the concept by using a small group of customers based.
The idea need enough in-depth information that the consumer can visualize it.
Considering their feedback, and start thinking about whats the marketing message
of the product.
 INNOVATION PROCESS

4 th Business Analysis
Considering whether the new product will be profitable.
Analysis including: Whether there is a demand for the product
A full appraisal of the costs
Substitutes
Identification of a break-even point.
 INNOVATION PROCESS

5 th Product Development
Creating a prototype or a limited production model.
Investigating exact design and specifications.
Giving some tangible for consumer testing, and do the
arrangement through the feedback.
 INNOVATION PROCESS

6 th Test Marketing
Requiring to test the whole concept which combine the all elements,
from product to marketing message.

Different with Consumer testing :

Focusing on testing the individual elements rather than proposing the
whole aspects from the product.
 INNOVATION PROCESS

7 th Commercialization

Deciding when the product would launch into the market.

Pricing and marketing plans need to be finalized, the sales teams and
distribution briefed, then the product and company is ready for the
launch.
 BUSINESS MODEL INNOVATION

Transforming the music industry by connecting their hardware

Industry model innovation and software which are iPod and iTunes to do the combination on
product and service.

Revenue model innovation Arranging the revenue model from using rental based
to subscription based annuity model.

Enterprise model innovation Innovating the R&D collaboration model, more than 50 % idea
are collected from external.
INNOVATION
STRATEGY
RICHARD

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INNOVATION STRATEGY

There is no menu of generic strategies.

Innovation Strategy must support business Strategy.
There are two Classes of Innovation Strategy

PLAY-TO-WIN PLAY-NOT-TO-LOSE

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 INNOVATION STRATEGY

PLAY-TO-WIN STRATEGY

- To produce significant competitive advantages that

competitors will not be able to easily or quickly match.
- Is a typical of high-technology start-ups.
- The failure rate is large.

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 INNOVATION STRATEGY

Potential?
Play to win strategy Example New form of
Business and
Use the web as the the starting of
storefront. e-commerce
Customers would select the
products. Risk?
the company will deliver it
into their front door. Relying on
people
shopping habit. 36
INNOVATION STRATEGY

PLAY-NOT-TO-LOSE STRATEGY

External Competitive Environment is extremely

intense or uncertain:
- Too many strong competitors.
- High degree of uncertainty due to a shifting
regulatory environment.

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INNOVATION STRATEGY

PLAY-NOT-TO-LOSE STRATEGY

What should companies do?

- Watch for improvement in external environment,
- Make improvement in its internal capabilities.
- Look for the opportunities to shift to a play to win strategy
at the appropriate time.

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INNOVATION STRATEGY

CASE STUDY
1960s 1980s: market leading innovator in technology and new
products.
1990s: things go moribund.

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INNOVATION STRATEGY

Reason:
1. Had not had breakthrough innovation since 1985.
2. The organization had become conservative and slow moving.

1997, Set the goals to equip P&G to dominate the consumer goods
industry in the 21st century.

PLAY TO WIN STRATEGY

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INNOVATION STRATEGY

1. Create more nimble organization to increase the speed and

quality of innovation.
2. Focus on the speed of commercialization.
3. Focus on higher growth, higher margin businesses like health
care and personal care.

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INNOVATION STRATEGY

Ostacles
1. New product commercialization is slow.
2. Fiefdoms.
3. Relationship between brand manager and
technology development manager.

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 INNOVATION STRATEGY

Senior management was

determined to succeed.
Make such changes in:
1. The organization.
2. Innovation process.
3. Priority of Innovation.

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 INNOVATION STRATEGY

Many Staff at P&G had trouble

performing.
Growth slow, profit warnings in 3
months.
Several new products launch flopped.
Share price slumped.

P&G Share Price 2000 -

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INNOVATION STRATEGY

Went through the innovation garden and

pulled a lot of weeds

- Consolidate global business Unit from seven to four.

- Restore focus on leading brands.

Measurement of success was not innovation

per se, but the consumers

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 CONCLUSIONS

1. Identify the type of innovation strategy that fits your company best
given the business strategy, competitive environment and innovation
competency.
2. Define the balance of the innovation portfolio to support the
strategy.
3. Specify how much of innovation need. Define priority and trade-
offs for innovation investment.
4. Clearly communicate to management team and innovations leaders.
5. Conduct diagnostics to assess how well you are doing.

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 Reference

http://www.lead-innovation.com/english-blog/the-4-phases-of-
innovation
https://disruptionhub.com/innovation-industry-4-0/
https://manucore.com/innovation-shaping-future/
THANK YOU FOR
YOUR LISTENING

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