CH 7 Innovation and Entrepreneurship
disruptive innovation
new technology, existing market
radical innovation
new technology, new market
Architectural Innovation
- reconfigure KNOWN components to create NEW markets Ex. Canon user-friendly copiers, GPS to handheld consumer devices
Disruptive Innovation
-Novel technologies serving existing markets Ex. ditigal photos, data storage media, japanese autos -Stealth Attack --captures current customers typically with initially lower cost and performance
growth stage
-early majority buyers increase growth rapidly -dominant design is set
decline
-laggards are buyers and market size shrinks -four strategic options
Shakeout
-more limited market growth --increased competitive rivalry -cost leadership firms tend to drive industry --weaker firms will exist
Maturity
-most excess capacity was removed during the shakeout phase -oligopoly is dominant industry structure in this stage
Radical Innovation
-novel methods or materials serving new markets -often from new firms Ex. Mass production Ford, Airplanes
introduction
-only a few innovators in the market --differentiated -strategy here --market acceptance and seeds for growth --network effects helpful --positive effects ONE user has for other users
incremental innovation
-steady improvement of a product or service -often from incumbent firms --higher entry barriers --organized inertia --reinforce supplier/buyer networks Ex. gillette razors
incremental innovation
existing technology, existing market
architectural innovation
existing technology, new market
four strategic options
exit-get out of the industry harvest-stay with limited investments maintain-stay and continue marketing consolidate-buy rivals, near monolopy
Types of Innovation
Incremental Radical Architectural Disruptive
