Chapter 10

Innovative strategies

1. Reconfiguring/ disintermediation 2. Low end disruptive 3. High end disruptive 4. Reconfiguring/ allowing mass customization 5. Blue ocean (new market to non customers

High conversion rate

A large amount of free users are willing to upgrade to the paid version. Ex. Skype

Incremental innovation

Building on a firms established knowledge base to create minor improvements to product/service Ex. Samsung plasma to LED

Disruptive innovation

Companies in the industry find your product so disruptive, that they can no longer Continue their business the same way. Or must shut down. Netflix causes blockbuster to change the way they do things

Hypercompetion

Competitive intensity has increased during times when competitive advantage is low.

Innovation

Conversion of a product or concept that will generate revenues and profits

Blue ocean strategy

Creating new demand in a uncontested market space. Competing where there is no other competitors.

Invention

Creation of an idea

Radical innovation

Major invention - draws on different knowledge, technologies, or methods to deliver value. Ex. Walkman to cd player Ex. Cd player to ipod

Cross sell/ Freemium

Offering a free product to gain widespread initial use. Ex. Free version (adobe)

Bundling strategy

Offering a free product with a paid product or service. Ex. Free printer with a purchase of computer. You will continue to pay for ink. It seems like a value.

Fess business/revenue models

Offering free products is another way, to sell products for cost.

Third party/ pay strategy

Offering the product free to the consumer. But charging the business side money. Ex. Google ads.

High end disruptive innovation

Outperform existing products and sell for a premium price. Cost gradually decline as product becomes common. Ex. Starbucks atmosphere is better than other coffee shops. Ex. Ipod is way better than Walkman

Low end disruption

Producing a low cost product or service to price sensitive market then gradually moving up the market Ex. Honda 50cc motorcycle

Disintermediation

Reconfiguring to eliminate activities. Ex. Amazon having no middle man(salepeople) in the sales process. While walmart has yo have a extra step to sales.

Customer segments

Targeted community of users.

Revenue model

The way which a firm plans to get paid for the goods or services the provide.

Mass customization

When a company mass produces various units and allows the customer to choose what combinations they want. Ex. Build a bear Ex. Dell computer