Innovation Part 2

Value Proposition

A value proposition is a concise statement that articulates the unique benefits and value that a product, service, or offering provides to its target audience. It communicates why a customer should choose a particular solution over alternatives, highlighting the distinctive features, advantages, and outcomes that address the needs or problems of the customer. A well-crafted value proposition effectively communicates the value that a business promises to deliver, setting it apart in a competitive market and influencing potential customers' purchasing decisions.

Start-up vs Corporate Entrepreneur

Start-up Entrepreneurship: Flexibility: Start-ups have the agility to pivot quickly, adapt to market changes, and experiment with new ideas due to their smaller size and lack of bureaucratic processes. Risk-Taking: Start-up entrepreneurs often embrace higher levels of risk, taking bold initiatives and pursuing innovative ideas that may not be immediately proven or validated. Resource Constraints: Limited financial resources drive creativity and efficiency, encouraging start-ups to find innovative solutions with lean operations. Entrepreneurial Culture: Start-ups foster a culture of entrepreneurship, encouraging employees to take ownership, think creatively, and contribute to the company's growth. Speed of Decision-Making: Decisions in start-ups are typically made swiftly, allowing for rapid iteration and adaptation to market feedback. Corporate Entrepreneurship: Resources: Corporations have access to substantial financial resources, allowing for significant investments in research, development, and market expansion. Established Brand and Reputation: Corporations often leverage their established brand and reputation, providing a level of trust and credibility that can facilitate market entry and customer adoption. Market Reach: Established distribution channels and networks enable corporations to quickly reach a broad audience, facilitating the scaling of new products or services. Risk Mitigation: Corporations tend to focus on risk mitigation strategies, emphasizing thorough market research and analysis before committing to new ventures. Diverse Talent Pool: Large corporations can attract and retain a diverse talent pool, including specialists and experts in various fields, contributing to comprehensive and well-rounded innovation efforts.

Sustaining Innovation

Sustaining innovation involves incremental improvements to existing products, services, or processes, aiming to enhance features, performance, or efficiency without fundamentally altering the core offering. This type of innovation is crucial for organizations seeking to stay competitive, retain customers, and ensure long-term business sustainability.

Definition of Targeting

Targeting, in a business or marketing context, refers to the strategic process of identifying and selecting a specific group of individuals, businesses, or markets as the primary focus for promotional and sales efforts. Targeting involves analyzing and understanding the characteristics, needs, and behaviors of potential customers to tailor marketing strategies and deliver products or services that align with their preferences. This approach enhances the efficiency and effectiveness of marketing campaigns, allowing businesses to allocate resources more precisely and connect with the audience most likely to be interested in their offerings. Targeting is a crucial element in developing a successful marketing strategy, helping organizations maximize their impact and achieve better results by concentrating on a well-defined and receptive audience.

Origin of 5 Why's

The "5 Whys" technique originated at the Toyota Motor Corporation as part of their problem-solving methodology known as "Kaizen." Developed by Taiichi Ohno, a key figure in the Toyota Production System, the 5 Whys is a systematic approach to root cause analysis. The method involves asking "why" repeatedly, typically five times, to delve deeper into the layers of causation behind a problem. Ohno emphasized the importance of identifying and addressing the underlying issues rather than merely treating the symptoms. This method became integral to Toyota's continuous improvement philosophy, encouraging a culture of problem-solving at its source and fostering a deeper understanding of processes to enhance efficiency and quality in manufacturing. Over time, the 5 Whys has been widely adopted in various industries as a valuable tool for problem-solving and process improvement.

Is it a business opportunity or just a good idea?

Think about: 1. Problem 2. Target customers (who have the problem) 3. Gaps (versus competition) 4. Better than the next best alternative? 5. Will people pay for your solution? 6. How do you determine this? (Validation)

The reason for prototyping

User-Centered Design: Prototyping is essential for adopting a user-centered design approach. It helps designers understand user needs, preferences, and behaviors through direct interaction and feedback. Risk Reduction: Prototyping allows teams to identify and address potential risks early in the development process, reducing the likelihood of major issues in the final product. Iterative Development: Prototyping supports an iterative development process, where successive versions of the prototype are refined based on feedback, testing, and evolving requirements. Visualization of Concepts: Prototyping transforms abstract ideas into tangible representations, making it easier for stakeholders to understand and evaluate design concepts. Communication and Collaboration: Prototypes serve as a common ground for communication among team members and stakeholders, fostering collaboration and shared understanding of the project goals. Cost-Efficiency: Identifying and resolving issues early in the prototyping stage is more cost-effective than making changes during or after full-scale development. This is particularly important in minimizing development costs and time. User Testing: Prototypes enable user testing and validation of design assumptions, helping ensure that the final product meets user expectations and requirements.

Corporate innovation

process by which companies develop + implement new ideas, technologies, and ways of working to drive growth, improve efficiency and stay competitive

Divergent Thinking

1. Defer judgement 2. Go for quantity 3. Make connections 4. Seek novelty

5 Why's

1. Define the Problem? 2. Why is it happening? 3. Why is that? 4. Why is that? 5. Why is that (root cause)?

3 Design Thinking Phases

1. Exploratory 2. Concepting 3. Prototyping

Questions for every entrepreneur

1. Where do I want to go? 2. How will I get there? 3. Can I do it?

Strategy

A strategy is a purposeful plan of action designed to achieve specific goals, guiding an organization in allocating resources, making choices, and positioning itself effectively in the pursuit of competitive advantage.

Sustainable competitive advantage

A sustainable competitive advantage is a unique and enduring strength or set of strengths that allows a business to outperform its competitors consistently over an extended period. This advantage is not easily replicated by competitors and contributes to the long-term success and profitability of the business. Sustainable competitive advantages can stem from various sources, including innovative technology, strong brand equity, cost leadership, intellectual property, exclusive access to resources, and effective strategic positioning. The term "sustainable" emphasizes the durability and resilience of the advantage in the face of market dynamics and competitive pressures.

Innovation Processes for startup and corporation

Agile Development: Embrace iterative and flexible development methodologies to respond to market feedback and adapt to changing circumstances quickly. Lean Startup Methodology: Prioritize validated learning, build a minimum viable product (MVP), and efficiently use resources to test and refine business models. Rapid Prototyping: Create quick prototypes to visualize concepts, gather feedback, and make improvements promptly. Customer-Centric Approach: Strongly emphasize understanding customer needs, pain points, and preferences to develop solutions that resonate with the target audience. Risk-Taking Culture: Cultivate an environment that encourages calculated risk-taking, where failure is seen as a learning opportunity rather than a setback. Cross-Functional Teams: Foster collaboration among diverse teams with varied skill sets to promote creativity and interdisciplinary problem-solving.

What does it mean to be an entrepreneur

An entrepreneur is an individual who takes calculated risks, demonstrates innovation, and exhibits qualities such as vision, adaptability, leadership, persistence, and resourcefulness to establish and grow a business, contributing to economic development and innovation.

Examples of value propositions

Apple iPhone: "The iPhone combines a sleek design, powerful performance, and an intuitive user experience, providing users with cutting-edge technology and seamless integration into the Apple ecosystem." Amazon Prime: "Amazon Prime offers fast and free shipping, exclusive access to a vast library of movies, TV shows, and music, along with unlimited photo storage, providing members with convenience, savings, and entertainment all in one subscription." Tesla: "Tesla electric vehicles deliver exceptional performance, long-range capabilities, and cutting-edge autonomous features, providing environmentally conscious consumers with a sustainable and thrilling driving experience." Uber: "Uber provides a convenient, reliable, and affordable transportation solution at the touch of a button, offering users a seamless and cashless experience with safety and transparency." Slack: "Slack is a collaboration platform that streamlines communication, enhances teamwork, and integrates with various tools, improving productivity and keeping teams connected in a centralized workspace." Nike: "Nike athletic wear offers high-performance products designed for athletes of all levels, combining innovation, style, and comfort to inspire and enable individuals to reach their full athletic potential." Zoom: "Zoom provides a user-friendly video conferencing platform with high-quality audio and video, reliable performance, and versatile features, making virtual communication and collaboration easy for businesses and individuals." Starbucks: "Starbucks offers premium coffee and a welcoming atmosphere, providing customers with a place to relax, connect, and enjoy handcrafted beverages made with high-quality, ethically sourced coffee beans."

Point-of-difference (PODS)

Attributes/benefits that consumers strongly associate with the bran and believe they can't find this with a competitive brand

Customer Journey

Awareness -> Consideration -> Purchase -> Retention -> Advocacy

5 C's of Situational Analysis

Company: This focuses on understanding the internal capabilities and resources of the company. It involves evaluating the strengths and weaknesses of the organization, including its financial health, operational efficiency, and overall strategic positioning. Customers: Examining the customer segment is crucial for businesses. It involves understanding the needs, preferences, behaviors, and demographics of the target market. By analyzing customer characteristics, businesses can tailor their products and services to meet specific demands. Collaborators (or Partners): Assessing the relationships with external entities such as suppliers, distributors, and other strategic partners falls under this category. Collaborators play a significant role in the success of a business, and understanding these relationships is vital for effective collaboration and supply chain management. Competitors: Analyzing the competitive landscape is essential for strategic planning. This involves understanding who the main competitors are, their strengths and weaknesses, market share, and strategies. Competitor analysis helps businesses identify opportunities and threats in the market. Climate (or Context): The external environment, including economic, technological, social, and legal factors, falls under the climate or context category. Businesses need to be aware of the macro-environmental factors that can impact their operations, such as changes in regulations, economic trends, and technological advancements.

Competitive advantage

Competitive advantage refers to a set of unique strengths or capabilities that enable a business to outperform its rivals and achieve superior performance in the marketplace. This advantage can result from various factors such as innovative products, efficient processes, strong brand reputation, exclusive access to resources, or any distinctive aspect that distinguishes the business from its competitors. A sustainable competitive advantage allows a company to maintain market share, attract customers, and generate higher profits over an extended period.

The role of prototyping

Concept Visualization: Prototypes help transform abstract concepts and ideas into tangible representations, allowing stakeholders to visualize the final product or solution. User Feedback and Testing: Prototypes provide a hands-on experience for users, allowing them to interact with a simplified version of the product. This facilitates early user feedback and usability testing, helping designers identify and address issues before the final product is developed. Communication Tool: Prototypes serve as effective communication tools between different stakeholders, including designers, developers, clients, and investors. They offer a common visual language that helps convey design intent and functionality. Risk Mitigation: By creating a prototype, development teams can identify and mitigate potential risks early in the process. This helps in reducing the likelihood of costly errors or design flaws in the final product. Iterative Design: Prototyping supports an iterative design process, allowing designers and developers to make quick adjustments and refinements based on feedback. This iterative approach helps in refining the product design over multiple cycles. Decision-Making Support: Prototypes aid in decision-making by allowing stakeholders to evaluate different design options and features before committing to full-scale development. This is especially valuable in cases where design choices have significant implications for functionality, user experience, or cost.

Culture

Culture refers to the shared values, beliefs, norms, practices, customs, and behaviors that characterize a particular group, organization, society, or community, shaping its identity and influencing the way individuals within it interact and perceive the world.

Customer Acquisition Costs (CAC)

Customer Acquisition Cost (CAC) is the average expense a business incurs to acquire a new customer, calculated by dividing total acquisition costs by the number of new customers gained. It is a critical metric for evaluating the efficiency and financial sustainability of customer acquisition efforts, helping businesses make informed decisions about resource allocation and strategy optimization. Formula: CAC=Number of New Customers Acquired/Total Costs for Customer Acquisition​

Developing value propositions

Developing value propositions involves crafting compelling and distinct messages that communicate the unique benefits and value a product or service provides to its target audience, addressing their specific needs, solving problems, or fulfilling desires in a way that sets it apart from competitors. The process typically includes identifying customer pain points, understanding the competitive landscape, and clearly articulating the distinctive features and advantages that make the offering valuable to the intended market.

disruptive innovation

Disruptive innovation refers to the introduction of groundbreaking and often unconventional products, services, or processes that significantly alter existing markets, challenging established norms and displacing traditional competitors. Unlike sustaining innovation, which improves upon existing offerings, disruptive innovation typically targets underserved or overlooked market segments with novel solutions, causing a shift in the industry landscape. Disruptive innovations often start in niche markets and gradually gain traction, eventually reshaping entire industries by providing more accessible, cost-effective, or efficient alternatives.

Phases of Team Development/Tuckman Model

Forming: Characteristics: In the forming stage, team members are just getting to know each other, and there is a sense of excitement and anticipation. Roles and responsibilities may be unclear, and individuals may be polite and cautious. Storming: Characteristics: Conflict and disagreement emerge as team members express their individual opinions and vie for influence. This stage is marked by a potential power struggle, and differences in working styles may become apparent. Norming: Characteristics: The team begins to establish norms, values, and a sense of cohesion. Members resolve conflicts, appreciate each other's strengths, and develop a more unified approach. Roles become clearer, and trust starts to form. Performing: Characteristics: The team reaches a high level of productivity, and members work together smoothly. There is a shared focus on achieving common goals, and the team demonstrates both autonomy and interdependence. Adjourning (or Mourning): Characteristics: This phase, sometimes added to the original model, involves the disbandment of the team, either due to the completion of a project or other external factors. Team members may experience a sense of loss as they move on to other endeavors.

When should you perform market research?

From the get-go: problem identification + understanding

Inductive vs. Deductive reasoning

Inductive reasoning involves deriving general principles from specific observations, establishing probable conclusions. For example, noticing all observed crows are black leads to the inductive inference that all crows are likely black. On the other hand, deductive reasoning moves from general principles to specific conclusions with certainty. If it is known that all men are mortal and John is a man, deductive reasoning concludes that John is mortal. Inductive reasoning is common in scientific research, forming hypotheses based on observed patterns, while deductive reasoning is widely used in mathematics, logic, and philosophical arguments, providing certain conclusions when premises are true. Both types of reasoning contribute to logical analysis and understanding in various fields.

Definition of Innovation

Innovation is the process of introducing new ideas, methods, products, or services that bring about positive change. It involves the application of creativity and the implementation of novel solutions to address challenges, improve existing processes, or meet evolving needs. Innovation can occur in various domains, including technology, business models, organizational structures, and social practices, contributing to progress and advancement in diverse fields.

Segmenting Customers in Target Market

Market Research: Conduct thorough market research to understand the overall market and identify relevant variables that differentiate customer groups. Identify Key Variables: Determine the key variables that will be used for segmentation. Create Customer Personas: Develop detailed customer personas for each segment based on the identified variables. Segmentation Criteria: Use clear and distinct criteria to segment customers. Data Collection: Gather relevant data on your target audience. Segmentation Models: Choose a segmentation model that aligns with your business goals. Evaluate Segment Viability: Assess the size, accessibility, and profitability of each segment to ensure they are viable targets. Targeting Strategy: Develop a targeting strategy for each identified segment. Tailor Products and Services: Customize products, services, or marketing messages to align with the unique needs and preferences of each customer segment. Test and Refine: Implement your segmentation strategy and continuously monitor and analyze results. Customer Journey Mapping: Understand the customer journey for each segment, identifying touchpoints, pain points, and opportunities for engagement.

Market Research

Market research plays a crucial role in turning customer input into innovation by providing valuable insights that inform the development of products, services, and business strategies. By actively seeking and analyzing customer feedback, preferences, and needs, businesses can identify opportunities for improvement and innovation. Through methods such as surveys, interviews, focus groups, and social media monitoring, organizations gain a deeper understanding of customer experiences and expectations. This customer input serves as a foundation for innovation by highlighting pain points, unmet needs, and emerging trends. Armed with these insights, businesses can then tailor their offerings, introduce new features, or even create entirely new products and services that better align with customer desires. The iterative nature of market research allows companies to continuously refine their innovations, ensuring they remain relevant and resonate with the evolving preferences of their target audience. Overall, market research transforms customer input into actionable strategies for innovation, fostering a customer-centric approach that enhances competitiveness and drives business success.

Market understanding/Situation Analysis

Market understanding, also known as situation analysis, involves a comprehensive examination of the internal and external factors that impact a business in its current environment. This analysis provides valuable insights for strategic planning and decision-making. Types: Internal, External, Customer, SWOT, Market Positioning, Tech/Innovation, Environmental

Models of Corporate Innovation

Open Innovation Model: emphasizes collaboration and the sharing of ideas both internally and externally. The Three Horizons Model: divides innovation into three horizons. Horizon 1 focuses on current core business activities, Horizon 2 on emerging opportunities and business extensions, and Horizon 3 on creating entirely new business models. Ambidextrous Organization: advocates for organizations to simultaneously manage and excel in both exploratory (innovative and experimental) and exploitative (efficient and iterative) activities. Lean Startup Model: the Lean encourages a build-measure-learn feedback loop. Corporate Venturing Model: Involves creating internal startup-like units or investing in external startups to foster innovation. Design Thinking Model: involves empathizing with users, defining problems, ideating solutions, prototyping, and testing. Intrapreneurship Model: involves fostering an entrepreneurial mindset within an organization. Disruptive Innovation Model: describes the process by which new technologies or business models disrupt existing markets. Corporate Innovation Ecosystem: views innovation as an ecosystem involving internal and external stakeholders, such as customers, suppliers, partners, and startups.

Optimal Fidelity

Optimal fidelity, in various contexts such as communication, data representation, or technology, refers to achieving the highest level of accuracy, precision, or faithfulness in conveying information or replicating an original state. The term is often used to describe the degree to which a representation, such as an image, sound, or data transfer, matches the original without loss or distortion.

Bill of Materials (BOM)

Part Number or Code: Unique identifiers assigned to each item in the list to facilitate accurate identification and tracking. Description: A clear and concise description of each component or material, providing details about its characteristics and purpose. Quantity: The quantity of each item required to produce one unit of the final product, specified in standard units (e.g., pieces, meters, kilograms). Unit of Measure: The standard unit of measurement used for each item, ensuring consistency in quantity calculations. Reference Designators: Codes or labels that associate each item with specific locations or positions in the product's design or assembly process. Assembly Hierarchy: Information about the hierarchical structure of the product, indicating how sub-assemblies and components are organized and related. Material Specifications: Details about the material properties, quality standards, or specific requirements for each component. Vendor Information: Information about the suppliers or vendors providing each component, including part numbers and sources. Cost Information: The cost associated with each component, enables the calculation of the total cost of the final product.

POP and POD

Points of Parity (POP): Definition: Points of Parity are the attributes or characteristics that a brand shares with its competitors, making it comparable and meeting the baseline expectations of consumers in a particular category. Purpose: Establishing Points of Parity is crucial for ensuring that a brand is perceived as a legitimate and acceptable option within its industry. It helps prevent consumers from ruling out a brand due to a lack of essential features or qualities common to competitors. Points of Difference (POD): Definition: Points of Difference are the unique and distinctive attributes or features that set a brand apart from its competitors. These are the characteristics that make a brand stand out in the minds of consumers and create a competitive advantage. Purpose: Developing and emphasizing Points of Difference is vital for building a brand's identity and positioning it as a preferred choice in the market. PODs contribute to a brand's unique value proposition and can influence consumer preferences and loyalty.

Types of Innovation

Product Innovation: Definition: Introducing new or improved products to the market. Process Innovation: Definition: Enhancing or optimizing existing methods or workflows to increase efficiency, reduce costs, or improve quality. Service Innovation: Definition: Introducing new or improved services that meet customer needs or provide a better experience. Business Model Innovation: Definition: Changing the way a company creates, delivers, and captures value, often involving new revenue streams or strategic partnerships. Organizational Innovation: Definition: Implementing changes in the structure, culture, or management processes of an organization to foster creativity and adaptability. Incremental Innovation: Definition: Making small, continuous improvements to existing products, processes, or services. Radical or Disruptive Innovation: Definition: Introducing groundbreaking, transformative changes that significantly alter the status quo in an industry. Open Innovation: Definition: Collaborating with external partners, such as startups, customers, or research institutions, to access new ideas and expertise. Social Innovation: Definition: Introducing new solutions to address social challenges, improve community well-being, or create positive societal impact. Definition: Introducing new technologies or applying existing technologies in novel ways to create value.

Product/Market fit

Product/Market Fit is reached when a product effectively addresses the needs and demands of its target market, leading to high customer satisfaction, market demand, and the potential for scalable growth.

10 Types of Innovation

Profit Model: Innovations in how the company makes money, such as pricing strategies, revenue streams, or cost structures. Network: Innovations in how the company connects with others, including partnerships, alliances, and collaborations with external entities. Structure: Innovations in the organization's internal makeup, including its processes, systems, and organizational design. Process: Innovations in how the company produces its offerings, focusing on efficiency, quality, and optimization of workflows. Product Performance: Innovations in the features and functions of the product or service to enhance its performance and capabilities. Product System: Innovations in how the product or service interacts with complementary products or services to create a broader system. Service: Innovations in the ways the company provides support, enhancements, and customer service to enhance the overall customer experience. Channel: Innovations in how the company delivers its product or service to customers, exploring new distribution channels or retail strategies. Brand: Innovations in how the company represents its offerings and communicates its value to customers, including branding, messaging, and positioning. Customer Engagement: Innovations in how the company connects with and involves its customers, fostering loyalty and creating a more engaging customer experience.