Chapter 7: Business Strategy- Innovation and Strategic Entrepreneurship
Growth stage
After the inital innovation has gained market acceptance, demand increases rapidly as first time buyers rush to enter the market. The new group of buyers are called the EARLY MAJORITY
industry life cycle
The four different stages: introduction, growth, maturity, and decline that occur in the evolution of industry over time
discontinuities
periods of time in which the underlying technolgical standard changes
network effects
the positive effect (externatility) that one user of a product or service has on the value of that product for other users.
maturity stage
Growth comes from buyers called the late majority entering the market.
decline stage
Laggards customers who adopt a new product only if its absolutely neccesary
strategic entrepreneurship
The pursuit of innovation using the tools and concepts available in strategic management
Introduction stage
a company launches a successful innovation. Only EARLY ADOPTERS are willing to pay a premium price
absorptive capacity
a firm's ability to understand, evaluate, and integrate external technology developments
architectural innovation
a new product in which known components based on existing technologies are reconfigured in a novel way to attack new markets
paradigm shift
a situation in which a new technology revolutionizes an existing industry and eventually establishes itself as the new standard.
hypercompetition
a situation in which competitive intensity has increased and periods of CA have shortened, especially in newer, technology based industries, making any competitive advantage a string of short lived advantages.
thin markets
a situation in which transactions are likely not to take place because there are only a few buyers and sellers who have difficulty finding each other.
standard
an agreed upon solution about a common set of engineering features and design choices; also known as dominant design
radical innovation
an innovation that draws on novel methods or materials is derived from either an entirely different knowledge base or from the recombination of firm's existing knowledge base with a new stream of knowledge or targets new markets by using new technologies.
disruptive innovation
an innovation that leverages new technologies to attack existing markets from the bottom up.
incremental innovation
an innovation that squarely builds on the firm's established knowledge base, steadily improves the product or service it offers and targets existing markets by using existing technology
long tail
business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choices
innovation
the commercialization of any new product, process, or idea or the modification and recombination of existing one. To drive growth, innovation also needs to be useful and successfully implemented.
