topic 2 innovation

Product InnovationProduct Innovation

Topic 2Topic 2

04/10/2304/10/23 Product InnovationProduct Innovation 22

• Innovation and the continuous Innovation and the continuous development of new and improved development of new and improved products are key to the design process. products are key to the design process. This topic considers the relationship This topic considers the relationship between the design cycle and the between the design cycle and the product cycle. It moves on to explore product cycle. It moves on to explore the role of invention in innovation and the role of invention in innovation and the impact of market pull and the impact of market pull and technology push on product innovation. technology push on product innovation. Establishing and developing markets for Establishing and developing markets for products are a critical element of the products are a critical element of the product cycle.product cycle.

Designers and the Product Designers and the Product CycleCycle

2.12.1


The Product CycleThe Product Cycle

• Inception and designInception and design• ProductionProduction• SalesSales• UseUse• RetirementRetirement• The designer has impact (but is not The designer has impact (but is not

necessarily in control) at each levelnecessarily in control) at each level


Stages of the product cycleStages of the product cycle

• There are three basic stages of use for a There are three basic stages of use for a productproduct

• In the In the earlyearly stages of the product cycle, many stages of the product cycle, many changes to the product take place until it changes to the product take place until it develops to the develops to the

• maturemature stage, where it is diffused into the stage, where it is diffused into the market, gains acceptance and sells well. market, gains acceptance and sells well.

• In the In the latelate stage, the product begins to stage, the product begins to decline in need and therefore in salesdecline in need and therefore in sales


Can you Identify Products in Can you Identify Products in each Stage?each Stage?• Carbon Nanotubes are in early stage of Carbon Nanotubes are in early stage of

development.development.• The ballpoint pen is in the mature stage, The ballpoint pen is in the mature stage,

as it still sells well although the design as it still sells well although the design does not change much. does not change much.

• The cassette tape is in the late stage, The cassette tape is in the late stage, as it has been overtaken by successive as it has been overtaken by successive generations of products. generations of products.


Design versus product cyclesDesign versus product cycles

• the design process is aimed at producing the design process is aimed at producing a suitable solution to a problem, a suitable solution to a problem,

• the product cycle is concerned with the product cycle is concerned with putting that solution into commercial putting that solution into commercial practice practice


For many products the product For many products the product cycle has shortened cycle has shortened • Look at the differences between a Look at the differences between a

laptop computer and a ballpoint pen. laptop computer and a ballpoint pen. • Laptop computers are an intensely Laptop computers are an intensely

competitive market, with size and power competitive market, with size and power being key issues being key issues

• It is not unlikely to have a pen that is It is not unlikely to have a pen that is useable longer than a laptop.useable longer than a laptop.

Innovation and InventionInnovation and Invention

2.22.2


Invention and InnovationInvention and Innovation

• Invention - The process of discovering a - The process of discovering a principle. A technical advance in a principle. A technical advance in a particular field often resulting in a novel particular field often resulting in a novel product.product.

• Innovation -The business of putting an -The business of putting an invention in the marketplace and invention in the marketplace and making it a success.making it a success.


Stages of innovationStages of innovation

• Developing an idea into a viable productDeveloping an idea into a viable product• ProductionProduction• marketing and salesmarketing and sales• followed by redesignfollowed by redesign• the cycle or spiral continues the cycle or spiral continues


Science and TechnologyScience and Technology

• Science explains how the world is Science explains how the world is • Technology uncovers new possibilities Technology uncovers new possibilities

for materials, manufacturing techniques for materials, manufacturing techniques and processes. and processes.

• Often technology is an application of Often technology is an application of science in a way that is not yet fully science in a way that is not yet fully understoodunderstood


Most inventions fail to become Most inventions fail to become innovationsinnovations• MarketabilityMarketability• financial supportfinancial support• MarketingMarketing• the need for the inventionthe need for the invention• PricePrice• Consumer or Business resistance to Consumer or Business resistance to

changechange• aversion to risk aversion to risk


Design and Innovation. Design and Innovation.

• For continued innovations (re-For continued innovations (re-innovation), products and processes are innovation), products and processes are constantly updated (redesigned) to constantly updated (redesigned) to make them more commercially viable make them more commercially viable and to give consumers choice and and to give consumers choice and improved products. improved products.


DefinitionsDefinitions

• dominant design - The design containing - The design containing those implicit features of a product which are those implicit features of a product which are recognized as essential by a majority of recognized as essential by a majority of manufacturers and purchasers.manufacturers and purchasers.

• diffusion into the marketplace - The wide - The wide acceptance (and sales) of a product.acceptance (and sales) of a product.

• market pull - - The initial impetus for the The initial impetus for the development of a new product is generated development of a new product is generated by a demand from the market.by a demand from the market.

• technology push - T - The impetus for a new he impetus for a new design emanates from a technological design emanates from a technological development.development.


Dominant DesignsDominant Designs

• ballpoint pen (Bic ®) ballpoint pen (Bic ®)

• Apple® iPod®Apple® iPod®

• Coca-Cola®. Coca-Cola®.


The difficulties of getting a The difficulties of getting a product to diffuse into the product to diffuse into the marketplace. marketplace.

• Competition Competition • LocalLocal• NationalNational• Global Global • The problems of getting novel products The problems of getting novel products

to market include product launches and to market include product launches and marketing marketing


market pull or technology market pull or technology push push

• Push and pull are present in most Push and pull are present in most successful innovations. successful innovations.

• The explanation should apply only to The explanation should apply only to the origin of the idea or where the idea the origin of the idea or where the idea seems to have been generated. seems to have been generated.


The Lone InventorThe Lone Inventor

• lone inventor – An individual working outside or inside – An individual working outside or inside an organization who is committed to the invention of an organization who is committed to the invention of a novel product and often becomes isolated because a novel product and often becomes isolated because s/he is engrossed with ideas which imply change and s/he is engrossed with ideas which imply change and are resisted by others.are resisted by others.

• it is becoming increasingly difficult to be a successful it is becoming increasingly difficult to be a successful lone inventorlone inventor

• Most products are now quite complex and rely on Most products are now quite complex and rely on expertise from various disciplines. expertise from various disciplines.

• Most designs are developed by multidisciplinary Most designs are developed by multidisciplinary teams teams

• The amount of investment required is often too much The amount of investment required is often too much for one individual.for one individual.


The Lone InventorThe Lone Inventor

• They are often used to setting their own They are often used to setting their own targets rather than working as members targets rather than working as members of teams. of teams.

• They can be dogmatic in their They can be dogmatic in their methodology and less flexible than team methodology and less flexible than team workers. workers.

• The lone inventor may lack the The lone inventor may lack the business acumen to push the invention business acumen to push the invention through to innovation through to innovation


Product ChampionsProduct Champions

• product champion - - An influential individual, An influential individual, usually working within an organization, who usually working within an organization, who develops an enthusiasm for a particular idea develops an enthusiasm for a particular idea or invention and “champions” it within the or invention and “champions” it within the organization.organization.

• The product champion is often a forceful The product champion is often a forceful personality with much influence in a personality with much influence in a company. He/she is more astute at being company. He/she is more astute at being able to push the idea through the various able to push the idea through the various business channels and is often able to business channels and is often able to consider the merits of the invention more consider the merits of the invention more objectively.objectively.


MoneyMoney

• Innovators may have difficulty in Innovators may have difficulty in obtaining financial support for an obtaining financial support for an invention. invention.

• Most people with money to invest will be Most people with money to invest will be inclined to wait until it is clearer whether inclined to wait until it is clearer whether an invention is going to be successful an invention is going to be successful before investing: the problem is to get before investing: the problem is to get them to take the risk. them to take the risk.

People and MarketsPeople and Markets

2.32.3


DefinitionsDefinitions

• technophile - - Someone who immediately welcomes a technological change.

• techno-cautious - - Someone who needs some convincing before embracing technological change.

• technophobe - - Someone who resists all technological change.


ReactionsReactions

• People's reactions to technological People's reactions to technological change vary depending on their values change vary depending on their values and personal circumstances. and personal circumstances.

• First-order effects and second-order First-order effects and second-order effects should be taken into account, for effects should be taken into account, for example, personal gain in owning a car example, personal gain in owning a car versus social and environmental versus social and environmental considerations considerations


Corporate Strategy Corporate Strategy

• corporate strategy - - Long-term aims and Long-term aims and objectives of a company and ways of objectives of a company and ways of achieving them by allocation of resources achieving them by allocation of resources

• Two types:Two types:

• Pioneering (next Slide)Pioneering (next Slide)

• ImitativeImitative


Pioneering StrategyPioneering Strategy• Pioneering means being ahead of the competitors by Pioneering means being ahead of the competitors by

introducing a new product first.introducing a new product first.• It is the most risky (costly) strategy but one with the It is the most risky (costly) strategy but one with the

potential for the largest gainspotential for the largest gains• A pioneering company requires a strong research A pioneering company requires a strong research

and development (R&D) capability, which is and development (R&D) capability, which is expensive. A pioneering company needs to be expensive. A pioneering company needs to be financially secure and requires product champions to financially secure and requires product champions to push new ideas. push new ideas.

• Consider the Sony or Apple companies and their Consider the Sony or Apple companies and their various pioneering developments. various pioneering developments.

• Good market research can offset some risk, but is Good market research can offset some risk, but is problematic for novel products problematic for novel products


Imitative StrategyImitative Strategy

• The imitative strategy aims to develop a The imitative strategy aims to develop a product similar to the "pioneered" product as product similar to the "pioneered" product as quickly as possible quickly as possible

• It takes advantage of R&D invested by othersIt takes advantage of R&D invested by others• Is less risky Is less risky • based on a strong development capabilitybased on a strong development capability• It is often best to use a combination of It is often best to use a combination of

strategies strategies


Strategies for InnovationStrategies for Innovation.

• market penetration - Increasing sales to existing customers or finding new customers for an existing product. (usually through advertising)

• market development - Finding new applications for existing products thereby opening up new markets. (Nylon was originally developed for parachutes)


More Strategies for InnovationMore Strategies for Innovation

• product development -The creation of new, modified or updated products aimed mainly at a company’s existing customers. (replacing mechanical with microelectronic controls in domestic products)

• Diversification - Involves a company in both the development of new products and in selling those products to new companies. (different types or colors of electrical plugs)


Market Sector and Market Market Sector and Market SegmentationSegmentation• Market Sector - - A broad way of

categorizing the kinds of market the company is aiming for.

• Market Segmentation - - Markets divide up into smaller segments where the purchasers have similar characteristics and tastes.


Markets may be segmented in Markets may be segmented in many waysmany ways

• Income• age group • lifestyle • geographical location


More DefinitionsMore Definitions

• Robust Design - Flexible designs which can be adapted to changing technical and market requirements.

• Design Family - - The evolution of a design into a variety of products that will appeal to a wide range of customers.

• mobile phones or personal stereos are examples of a robust design that has become a design family

The EndThe End

Product InnovationProduct Innovation