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IMT Lecture: Innovation S Curve+ Disruptive. M M Biztel 01 Jul09.97 03

IMT Lecture: Innovation S Curve+ Disruptive. M M Biztel 01 Jul09.97 03

  1. 1. Design and Implementation of Technology Strategy: S-Curve & Disruption Lecture by: by: 1-Jul-09 Jul- IMT MM-Biztel MM- 1
  2. 2. Design and Implementation of Technology Strategy: Innovation S-Curve & Disruption Innovation Diffusion 3M58 Definition, Phase and Stage 1-Jul-09 Jul- IMT MM-Biztel MM- 2
  3. 3. What is S-Curve? S- Once innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been proposed that the life cycle of innovations can be described using the ''s-curve'' or s curve diffusion curve. The s-curve maps growth of revenue curve. s- or productivity against time. The s-curve derives from s- an assumption that new products are likely to have "product Life". i.e. a start-up phase, a rapid increase start- in revenue and eventual decline. In fact the great majority of innovations never get off the bottom of the curve, and never produce normal returns... (Wikipedia) 7/1/2009 3
  4. 4. The S-Curve of Innovation S- Physical limit New Technology Mature Technology performance parameter Invention Improvement Technology Period Period Period Embryonic Growth Maturity Aging Time 7/1/2009 4
  5. 5. The S-Curve Phase S- 7/1/2009 5
  6. 6. The S-Curve Stage S- 7/1/2009 6
  7. 7. Technology life cycle and product/process life cycle Technology life cycle Product Rate of innovation innovation Process innovation Technological Dominant Aging technology discontinuity design (substitution and (turbulence) discontinuity) 7/1/2009 7
  8. 8. Innovation Adoption Life Cycle Innovators Laggards Adopters Majority Majority Late Early Early 1-Jul-09 Jul- IMT MM-Biztel MM- 8
  9. 9. Innovation and Marketplace 7/1/2009 9
  10. 10. Science Push and Market Pull Opportunities Opportunities for science for market push pull • Scientific discoveries • Market demand • Applied knowledge • Proliferation of application • Recognised needs areas • Intellectual capital • Recognised needs • Opportunities for increased: profitability, quality, productivity 7/1/2009 10
  11. 11. Invention and Innovation Invention • Creation of a new idea for a product, process or service Innovation • A business process which brings inventions to commercial use • Requires the integration of inventions and existing technologies to bring innovations to the marketplace Idea generation + problem solving Invention Invention + implementation Innovation Innovation + diffusion Economic value 11
  12. 12. Components of an innovation cycle May never be developed into marketable products Invention Has no instantaneous Scientific Adopting commercial Discovery Innovation invention value Effect Market Source: Tarek Khalil Buying or ignoring Market Ignoring Disruptive Innovation the innovation 12
  13. 13. Disruptive Innovation 7/1/2009 13
  14. 14. Disruptive Innovation on Graph 7/1/2009 14
  15. 15. S-Curve & Disruptive Innovation 7/1/2009 15
  16. 16. Disruptive Innovation: Threat to Existing Market The Innovator's Solution, Christensen 7/1/2009 16
  17. 17. Disruptive Innovation: Examples The Innovator's Solution, Christensen 7/1/2009 17
  18. 18. Design and Implementation of Technology Strategy: Innovation S-Curve & Disruption Innovation of MJ 6M38 Innovation Strategic Action 1-Jul-09 Jul- IMT MM-Biztel MM- 18
  19. 19. From Industrial Economy to Innovation Economy Industrial Economy Innovation Economy Reduced Cost Cost saving through vertical Flexibility through outsourcing integration Customer visits location/ Role of content Choice by on-line description on- inspect standardized goods and customized goods Clear distinction between Blurred Boundaries All firms become content firms producers of content Market infrastructure Market infrastructure constrains quick changes Accelerated Competition enables quick changes Limited choices through Many choices through predetermined channels Shift in Power multiple channels Business based on integrated Business based on differentiated value network New Business Model content and added value Physical resources and Intangible resources and decreasing returns increasing returns Increasing Returns 7/1/2009 19
  20. 20. From Industrial Economy to Innovation Economy Sales Customer “Push” Focus Brand “Pull” Focus Capital Production Value Innovation Focus Brand Focus Capital High (WIP, Low (Direct Delivery Finished Goods) Brand to Customer) Capital High (Ownership Low Of Production) Brand (Outsourcing) Capital Source: Davenport (2006). Strategic Management in the Innovation Economy, pg. 63. 7/1/2009 20
  21. 21. Organization Challenge Here Ok Here CEOs 10° Managers 60° Staff 360° 1-Jul-09 Jul- IMT MM-Biztel MM- 21
  22. 22. Innovation Strategy Foundations Strength of Weakness of the the company company Opportunity Possible Starting point offered restrictions of strategy for strategy by the implementation work environment Possible Threat caused Possible restrictions crisis by the elements for strategy environment implementation In simplest strategy is organization’s approach to adjust with the changes in environment – proactively or reactively 1-Jul-09 Jul- IMT MM-Biztel MM- 22
  23. 23. Innovation Strategy Concept Era for Networking era Number of Elements Organizational in Strategic Planning Structure Kotter: Leading Change Porter: Norton, Kaplan: Competitive Strategic Maps Advantage Network Analysis Adjustment era Structure Core Competences Minzberg, System Resource Strategies Quinn: Culture Competence Management Strategy cannot Strategic Maps Business Intelligence be planned Competitor Intelligence formally Venturing Generic Strategies Scenario Planning Portfolio Analysis Competitor Analysis Planning era Industry Analysis H. Igor Ansoff: Formal Strategic Planning 1960 1970 1980 1990 2000 2010 1-Jul-09 Jul- IMT MM-Biztel MM- 23
  24. 24. Strategies at different stages 7/1/2009 24
  25. 25. Internal Disruptive Innovation 7/1/2009 25
  26. 26. S-Curve Habit Cycle 7/1/2009 26
  27. 27. Lesson Learned: Cisco's Merger & Acquisition Innovation Strategy highly Have centralized 7 marketing and customer contact. Plug the acquisition 1 into a powerful market access infrastructure, Decentralize releasing untapped on research potential. and upstream parts of product development. 6 2 Emphasis on 5 speed. 3 Identify leaders in areas where Cisco does not Develop repeatable process of acquisition 4 Assess multiple deals have a strong enough evaluation, due presence diligence, and through the integration Bus-Dev function.
  28. 28. Lesson Learned: Cisco Acquisitions (Samples) SMB 2000 1995 1996 2004 Service Provider 1998 2001 1998 2003 1998 1997 1999 2005 Enterprise 1999 1993 1994 2005
  29. 29. RESULT Aligning Innovation With The Life Cycle Experimental Innovation : Disruptive Innovation : Makes surface particularly in that press, because markets appear Gets attention, modifications the improve customer’s experience of established products or processes. source of wealth. as if from nowhere, creating a massive Marketing Innovation : : Application Innovation Improves customers touchinginto new markets to marketing Takes existing technologies processes, be they communications or consumer transactions serve new purposes. BusinessInnovation : Product Model Innovation : Reframes an established in established markets to the next or a Takes established offers value proposition to the customer level company’s established role in the value chain or both. Process Innovation : Structural Innovation : Makes processes for established offers in established markets Capitalizes on disruption to restructure industry relationships. more effective or efficient.
  30. 30. Design and Implementation of Technology Strategy: Innovation S-Curve & Disruption Think out the box 1M41 Conclusion & Final Words 1-Jul-09 Jul- IMT MM-Biztel MM- 30
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