Strategy Part 4
S curve development
demand for a new product is slow to take off, then demand accelerates, then demand decelerates, then turns to zero, then demand becomes negative as a market contract.
Incumbent firms
do not counter disruptive innovations must disrupt themselves, protect the low end of market and continue to innovate. Less likely to produce radical innovations as it disrupts relationship with ecosystem.
Shakeout stage is dominated by
early majority
Growth stage objectives
establishing a strong strategic position so rivals can not imitate
overzealous
excessively enthusiastic
At final stage of the industry lifecycle managers have 4 strategic options:
exit, harvest, maintain, or consolidate.
Maturity stage
firms compete for a share of market that has reached max
Maintain strategy
firms continue to market products at same level despite decline in consumer demand.
Innovation processes is in the four i's:
idea, invention, innovation, and imitation
Shakeout stage
intense competition, forces weaker firms out
Lifecycle stages
intro, growth, shakeout, maturity, and decline.
Components of patent application:
introduction, description of invention, claims
Firms with harvest strategy
minimizes the amount of resources devoted to product support in order to maximize cash flow
First mover disadvantages
needing to continuously perfect a product, need to educate potential customers about the products benefits and finding dist channels.
Growth stage
process innovation ramps up as firms attempt to keep up with rapidly rising demand while trying to bring down costs. Size of market rapidly expands.
After a standard is established in an industry, firms tend to focus more on...
process innovations
Tradesecret
requires protection against others revealing or disclosing info that could be damaging to business.
Crossing the chasm framework
the largest difference in consumer expectations is between early adopters and early majority.
Who make up the largest percentage of the market potential?
the late and early majority
Industry life cycle progresses change:
the number and size of competitors, type of customer, and type and level of innovation.
Blue oceans represent...
untapped market space and increased demand
Herding effect
customers entering the market in large numbers during growth rate.
incremental innovation
creation of products, services, or technologies that modify existing ones. Most common type of innovation.
Radical Innovation
creation of products, services, or technologies that replace existing ones
Blue ocean strategy is
Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs.
Market standards
Come from government or competition
US patent
If an invention is useful, novel, and non-obvious
Provisional patent application
Initial application providing evidence of being first to market
After a firm has gained acceptance with radical innovation....
It will typically follow up with incremental innovations
Early adopters
Like product that stokes their imagination and creativity
Only a few large firms remain in which industry lifecycle stage
Maturity stage
Success for disruptive innovation
Must capture low end of market first
Copyright
Right given to prevent others from printing, copying, or publishing any original works of authorship.
Value innovation
a firm that manages to avoid competition entirely by offering a product or service that creates uncontested market space.
Architectural Innovation
a new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets
disruptive innovation
a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors
Trademark
a symbol, word, or words legally registered or established by use as representing a company or product.
Intro stage priority
achieving market acceptance and seeding future growth
Types of innovation
architectural, radical, incremental, disruptive
Innovation avoids
creative destruction
