4. P&S Innovation strategy

4. P&S Innovation strategy

1. Basic strategic direction for innovation

   • Strategic framework of Porter
     • Cost leadership (LC, BMS)
     • Differentiation (LC, UC)
     • Segment specific differentiation (LC, NMS)
     • Segment specific cost leadership (NMS, UC)
     • Stuck in the middle
   • Pioneer vs. follower vs. imitator
     • Pioneer
       • First to market
       • Advantages
         • Temporary excess profts
         • Image advantage
         • Creation of long term customer relationships
         • Can create market entry barriers
         • Longer on the market (time-trap)
         • Learning curve and ev. cost advantage
         • Can establish dominant design/standard
       • Disadvantages
         • Uncertainty regarding market developments
         • High efforts of market creation
         • Efforts of persuasion at the customer
         • Diff. to get pilot customers and cooperation
         • Supplier risks regarding materials and components
         • Fear of technology leaps
     • Follower
       • Second-to-market
       • Advantages
         • Lower risk
         • Available info about market development
         • Market share and positions not fixed yet
         • Profit from learning curve of pioneer
         • Can create add. customer benefit by modifying the product
         • Most of the time, still possible to dominate design
         • Opp. to build better manufacturing
       • Disadvantages
         • Overcoming market barriers of pioneer
         • Fast reaction to pioneer's movement necessary
         • Strategy aligned with pioneer
         • Need strong competitive advantage against pioneer
         • Shorter period until other competitors come
     • Imitator
       • Me too
       • Advantages
         • Low uncertainty market development & customer needs
         • Profit from standardization
         • High predictability of tech. development
         • Possible to buy knowledge and licensing patents
         • Low R&D investments
         • Reduce production costs
       • Disadvantages
         • Established companies on market
         • Fear of price competition
         • Break up existing business relationships
         • Image disadvantage
         • Fear of deprofitable investments
   • Open vs. closed innovation
     • Firms works together with...
       • Public administration
       • Supplier
       • Research and education
       • Competitor
       • Trader, distributor
       • Customer
       • Co-seller
     • Principles
       • Import of solutions
       • Export of solutions
       • Cooperation with partners
     • Advantages
       • Extension of solution space
       • Reducing time-to-market
       • Reduction of market risk
       • Cost/revenue advantage
     • Open innovation funnel
       • Front-end-of-process
       • Development
       • Commercialisation
       • Launch to market
       • Internal and external involvement in all phases
   • Market strategy
     • Segmentation
       • Criteria
         • Relevance for customer behavior
         • Capability of acting
         • Accessibility
         • Measurability
         • Economic segmentation (benefit>cost)
         • Stability of segments
       • B2C
         • Demographics
           • Age
           • Maritial status
           • Gender
         • Socio-economics
           • Education
           • Job
           • Income
         • Psychography
           • Attitude
           • Lifestyle
           • Benefit
         • Observ. behavior
           • Brand loyalty
           • Retail preference
       • B2B
         • Demographics
           • Age
           • Equity
           • Industry
         • Socio economics
           • Size
           • Revenue
           • Rating
         • Psychography
           • Objectives
           • Involvement
           • Benefit
         • Obser. behavior
           • Suppliers
           • Contracts
           • Unit size
       • Approaches
         • Benefit segmentation
         • Consideration set-segmentation
         • Opportunity segmentation
       • Life style segmentation
         • Yuppies
         • Yuffies
         • Mobys/Dobys
         • Woofs
         • Skippies
         • Sandwichers
     • Methods
       • Primary market research
       • Secondary market research
       • Multivariate analysis
     • Segmentation criteria
       • Attractiveness
       • Competitive landscape
       • Fit
       • Accessibility
       • Relative competitive advantage
       • Profitability

2. Formal innovation strategy

   • Sources
     • Core capabilities
     • Trend & future research
     • Patent research
     • Competitive analysis
   • Trend
     • 'A manifestation of something that has unlocked and what newly serviced on existing consumer need, desire, want or value.'
     • Macro trends
       • Urbanization
       • Society
     • Industry trends
       • Hardware
     • Consumer trends in western countries
       • Multi-optionality
       • Quest for identity
       • Cocooning
       • Purchase duty
       • Customization
       • Quest for meaning
       • Boredom
       • Self-unfolding
       • Variety seeking
       • Consumption as experience and event

3. Input for strategic direction for innovation