Åa management of innovations and entrepreneurship malin brännback fall 2004

ÅA

Management of Innovations and Entrepreneurship

Malin Brännback

Fall 2004

ÅA Course Outline

W. 38; Sept. 13, Introduction, Innovations, Innovations Management, Entrepreneurship Questions to complete for week 39 (Drucker Ch. 1,2,

10,11..you may want to look through ch. 3-9 as well) Analyze Business Week “great innovators”, cold call

15 min. max on week 39 Guest Lecture: Alan Carsrud Entrepreneurship, what it

is and what it isn’t

W. 39; Sept. 20, Entrepreneurship, Entrepreneurial Business – The New Venture Questions to complete for week 40. Drucker Ch. 12-

15) Article 1, 12, 4, and 9

Course outline

ÅA Course Outline

W.40; Sept. 27, Diffusion of Innovations, Questions to complete for week 44 (Moore Ch. 1-5) Article 3, 5, 7 and 8 Guest Lecture: CEO Markku Jalkanen, Faron

pharmaceuticals, former CEO, still owner and founder of Biotie Therapies

Hand-out of GR-1 assignment to be prepared in pairs and to be handed in on October 25

• Contact Lenses for Chickens

W. 44; Oct. 25 The Idea, Defining the Concept and Markets – it’s more than just potential Guest Lecture 25.10, Kei Heikkilä-Stenvik,

Commercialising high technology Articles 2, 6, 11

Course outline

ÅA Course Outline

W. 45; Nov. 1, Business Plan Development Questions from article #13 to be handed in on Nov. 8; Contact Lenses for Chickens prepare to discuss Hand-out of 2 Business plans

W. 46; Nov. 8, The Dynamics of Innovation/Open Innovation Questions from Utterback and Chesbrough to be handed in on

Feb. 3 W. 47; Nov. 15, Four Business Plans

You will read 2 business plans GR-2 assignment. Prepare in pairs an evaluation of one

Business plan, to be handed in and prepare to discuss. Guest lecture, VP Business Development Kai Lähdesmäki and

CTO Timo Veromaa, Biotie Therapies

Individual assignment to be handed in W.48 Friday at 15.00

Course outline

ÅA Large Individual Assignment

You will write a case on an innovationDescribe an innovation – Describe how it came about and its

evolution over time.Describe the market, competition, Describe the management teamWhere is it right now? Problems aheadI want a good story; I want facts and I want

your own analysis of the case

Course outlineAssignments

ÅA Assignments, and Grading

A: 2 Group assignments, max. 45p Contact Lenses for Chickens 15p Business Plans 30p

• 15 p for full analysis• 5p x 3 for minor analysis of the other 3

B: 10 Individual assignments max 90p• w. 38 10+10+5 = 25p• w. 39 10 = 10p• w. 40 10+5 = 15p• w. 44 10+5 = 15p• w.45 10p• w. 46 10p• w. 47 5p

C: 1 Large Individual assignment 65 points Total 200 p. 100 points required for pass, min. 50% of each

assignment. NO EXAM

Course outlineAssignments

ÅA IN 1874….SAMUEL CLEMENS WROTE…

TRYING TO GET THE HANG OF THIS NEW FANGLED MACHINE....[IT] COSTS 125 DOLLARS. THE MACHINE HAS SEVERAL VIRTUES. I BELIEVE IT WILL PRINT. FASTERTHAN I CAN TYPE…IT PILES AN AWFUL STACKOF WORDS ON A PAGE

Course outlineAssignmentsIntroduction

ÅA “There are more things in heaven and earth than are dreamt of in your philosophy.”

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven , we were all going direct in the other way.”

Course outlineAssignmentsIntroduction

ÅA Let’s look at the history of technological change..

The past informs the present andthe present illuminates the past

You will need to look into a firm’s or an industry’s historical development in order to spot discontinuities or other major breaks

Find out about their past leaders

Look into develop-ments in society at large

Get the big picture!

Course outlineAssignmentsIntroductionTech change

ÅA Times of ChangeThe emergence of the Internet is said to be the

greatest change ever.Scientific advances in biotechnology is said to

have the most profound change on man now and in the future.

It depends on your reference point!

Major technological breakthroughs tend to change industries, business, society, etc – but change is incremental (mostly)


ÅA Eras of Change

Reference: R Boulton & al. Cracking the Value Code an Arthur Andersen publication

Time

Val

ue

Cre

atio

n

StoneAge

IronAge

AgriculturalAge

IndustrialAge

TechnologyAge

KnowledgeAge

BiotechAge


ÅA Technological change

However, the market is almost never where the inventor thinks it will be.

Although the feelings about hype appears to create the same kinds of feelings regardless of time


ÅA 150 years ago!The Industrial revolution – nothing much

happened before the railroads came although the steame engine was the invention enabling the REAL change:

The communications and transportation revolution telegraph and railroads City of Chicago population soared; 1850 29,963;

1870 298,977; 1890 1,099,850; 1910 2,185,283

• 104 trains came and left Chicago per day in 1856


ÅA Technological change

The Internet would not have been without the invention of the computer or even the coming of the PC back in the 1970’s Paul Freiberger and Michael Swaine: Fire in the Valley

and ultimately the World Wide Web 1989, which needed an interface – the Mosaic in 1992

So, the major invention was the computer, needing the combination of a whole array of prior innovations assembled together for creating a commodity – and now all hell’s loose.


ÅA Views of technology business

A Technologists view

If a man makes a better mousetrap than his neighbor, though he

builds his house in the woods, the world will make a beaten path to

his door.

Ralph Waldo Emerson

A Market-Oriented view

The manufacturer who waits for the world to beat a path to his door is a

great optimist. But the manufacturer who shows this “mousetrap” (and its

value) to the world, keeps the smoke coming

out his chimney.

O.B. Winters


ÅA

Idea, Invention, Innovation – 3 different words

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovation

ÅA Definitions

A Technological innovation is the successful implementation of a technical idea new to the institution creating it. The essence of technology-based innovation is the systematic and successful use of science to create new forms of economic activity. Technology-based innovation thus represents a subset of all innovation. The distinction between technology-based innovation and incremental product enhancement is based on the extent of novelty in the science or technology

A commercial innovation is the result of the application of technical, market, or business-model ingenuity to create a new or improved product, process, or service that is successfully introduced into the market.


ÅA Definitions

An invention is distinguished from an innovation by its character as pure knowledge. An invention becomes an innovation with the first commercial transaction. An innovation is thus a commercialised invention

The direct products of a technological invention are not goods or services, but the recipes used to create them. This may result in patents, or more broadly in new firms or business units within existing firms. A patent refers more to an invention than an innovation. Inventions are the necessary seed for technological change, but it is innovation that generates the economic benefit.


ÅA Innovation

Innovation is a highly complex process affected by many factors within the business environment. Innovation goes beyond R&D and should not be understood as simple transfer of know-how and technology, in which knowledge, production, application and exploitation can be separated

Support of R&D is still based on the linear model of innovation


ÅA Innovations

Innovations are closely related to product development levers by which companies can reinvent

themselves Innovations streams are patterns of innovation

that are required for sustained competitive advantage

First, we will look at the purpose of the business and

Then, on diffusion of innovations – to innovation streams we will return on week 45


ÅA Innovations

Innovations studied within industrial economics as technological paradigms and trajectories

Innovations management as management of technology and R&D

Product innovationsProcess innovationsBusiness concpet innovationIncremental, radical or disruptive innovationsArchitectural innovations

Value innovations


ÅA The basic functions: Innovation

Schumpeter (1934); innovations is an idea or an invention that can actually be sold on the market, mere commercial potential is not enough!

The most productive innovations is a different product or service rather than just an improvement (avoid me toos!) innovation is not invention it’s a term of economics rather than of technology non-technological innovations are as important

Innovation is the task of endowing human and material resources with new and greater wealth-producing capacity.


ÅAInnovations – according to Drucker

Is much more a term of economics than it is about

technologyTechnology

?What do you knowabout markets?? !!

!!Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovation

ÅA Innovations

Along intensified competition and globalisation of business a wider view of innovations is evolving Knowledge management, and

• Complex search, learning and problem-solving process

Organisations learning

Competence-based competition


ÅA Innovations management

Used to be integrated – today based on networking

Spatial proximity becomes essential for sharing and creating knowledge

Management of knowledge-based processes bewteen university and business business and business

Create profitable business


ÅA It’s not just about ideas

Here’s a great idea, it’s from me

ÅA Entrepreneurship

Often: One who starts his own, new and small business Is entrepreneurship only for small business???

Better: one who creates a new business in the face of risk and

uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them

Or: J. B. Say: changing the yield of resources Changing the value and satisfaction obtained from the

resources by the consumer

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-ship

ÅA A process definition of Entrepreneurship

It is the process of recognizing, seizing, pursuing and exploiting opportunities without regard to the resources you currently control.

An attitude towards management and technology that focuses on opportunities, needs fulfillment and controlling resources. It is not focused on risk management, owning resources, or science for technology sake.


ÅA Entrepreneurship

But not every new small business is entrepreneurial or represents enrtrepreneurship

Even large companies can be entrepreneurial


ÅA OPPORTUNITIES

Good scientific outcomes are not always good opportunities nor viable business concepts.

Concepts are built using science & entrepreneurial creativity - in real time and take time.

Opportunities are attractive, durable, timely, and anchored in a product or service which creates or adds real value for its buyers and end users.

Viable business concepts provide Need Satisfaction, Pain and/or Suffering Relief.

Opportunities yield measurable net benefits to the entrepreneurial team and to society.

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-shipOpportunities

ÅA Science, Commercialization and customers

Science&Commercia-lization: Avoid spending too

much time and money on “Trombone oil or Space Shuttle docking ideas”

You may turn out the best product in the world, but the entire world needs only about a pint a year or five in a generation. These are great ideas, but poor business opportunities or concepts.

Customers: “I cannot give you

the formula for success, but I can give you the formula for failure...which is: try to please everyone.”

Herbert Bayard Swope

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-shipOpportunitiesCommerciali-zation

ÅA VENTURE CONCEPTS andFinancial resources

Venture Concepts: "Vision is the art of

seeing things invisible.”

Jonathan Swift

Financial Resources

"Happiness is a positive cash flow.”

Fred Adler


ÅA ENTREPRENEURIALASSESSMENT and Reality Check

"The true entrepreneur acknowledges that he or she cannot succeed alone."

Dr. An Wang

"Never tell me the odds."

Han Solo in "Star Wars"


ÅA VENTURE EVALUATIONand Success

"Confidence is what you feel before you comprehend the situation."

Old Proverb

"Success, as I see it, is a result, not a goal."

Gustavae Flaubert


ÅA COMPELLING INTEREST

“Choose a job you love, and you will never have to work a day in your life.”

Confucius


ÅAIN FINLAND

In 2000 there were 222817 companies

which employed1,301419 persons, with aturnover of €262 million


ÅA The corporate structure of Finalnd in 2000 (Pki-Ytkkk/Tukkk)

0 % 20 % 40 % 60 % 80 % 100 %

Yritykset

Henkilöstö

Liikevaihto

0-9 10-49 50-249 yli 250


ÅA

What is the purpose of a business?

Drucker, P. F. (1974), (2001), (2002)Porter M. E. (1980), (2001)Moore, G. A. (1991), (1995)

Moore, J. F. (1996)

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-shipThe Purposeof Business

ÅA

The purpose of a business

To create a customer


ÅA Business Model

A business model is not just an idea of what could be a business

A business model require the definition of the business and its purpose and mission have to be translated into objectivesotherwise, they remain insights, good

intentions, and brilliant epigrams that never become achievements


ÅA Business Model

Business people have to create markets with effective demand

There has to be a customer who is willing to pay converting resources into wealth.

What the customer considers value is never just a product, it is always a utility, i.e. what a product or service does for him

A business model in order to be viable requires a sound revenue model, with one objective Profit is the test of the validity of the business model Profit is a condition of survival. It is the cost of the future,

the cost of staying in business


ÅA The purpose of a business

create a customera business enterprise therefore has

only two basic functions: marketing and innovations

There is only one starting point The customer

The customer defines the business!


ÅA The basic functions: Marketing

The business will start out with the needs, realities and values of the customer. What does the customer want to buy? Not

what do we want to sell! A business can exist only in an expanding

economy or in one that considers change both natural and acceptable

It is not necessary to grow bigger but to grow better


ÅAThe Focus and the Starting point

There is only one starting pointIt is the customerThe customer defines the business

not the name or statutes not the technology

Who is our customer? there is never the customer – but a customer –

there is usually at least two sometimes even more

Where is the customer?What does the customer buy?


ÅA Fundamental questions

What is our business? can only be answered by looking at the

business from the outside should not be asked when the company is in

trouble although then it must be asked! it is never popular to argue with success, but

success always makes obsolete the very behavior that achieved it. It always creates new realities.


ÅA Fundamental questions

What will it be?What should our business be?

the most important trend which few businesses pay much attention too is changes in population structure and population dynamics. Population shifts are the only events regarding the future for which true prediction is possible


ÅA What is our business?

A systematic analysis of all existing products, services, processes, markets, end users, and distributions channels. Are they viable? Will they remain viable? Do they still give value to the customer? Will they do so tomorrow too? Do they still fit the realities of the population and

markets of technology and economy?

Defining the purpose of the business and mission have to be translated into objectives.


ÅA QUESTIONS TO ASK

Is this really an adequate business opportunity?

Is this one we want to pursue?What resources are required to

exploit it?How do we acquire them?How do we manage the operation?How and when do we harvest?


ÅA Five Requirements of Obectives

Must be derived from what our business is, will be and should be represent the fundamental strategy of a business

Operational converted into specific targets and assignments

Enable concentration of resources and efforts – must be selective


ÅA Five Requirements of Obectives

Multiple objectivesAre needed in all areas on which the survival of

the business depend

Objectives are not fate; they are directions, commitments, and means making the future of the business

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-shipThe Purposeof BusinessObjectives

ÅA

The objectives need to be formalised into what is

normally known as a business plan!

ÅA 8 Objectives

Marketing objective – create a customerInnovation objective – or become obsoleteHuman resources – do we have the right skillsCapital resources – do we have the materialPhysical resources – do we have adequate

facilities These need to be employed productively;

Productivity objectivesSocial responsibility, and Profit requirement


ÅA

Innovation as an objective


ÅA

Awareness

Interest

Trial

Adoption

Time

DiffusionStages

Diffusion of Innovations

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-shipThe Purposeof BusinessObjectivesDiffusion ofInnovations

ÅA

Awareness

Interest

Trial

Adoption

Time

DiffusionStages


ÅA Product Adoption

Late majorit

y

Early majority

Early adopter

s

Innovators

Rate

of

ad

op

tion

Laggards

2.5%

13.5%

34% 34%

16%


ÅA

TheChasm

Technologyenthusiasts

Visionaries Pragmatists Conservatives Skeptics

The earlymarket

mainstreamThe

market

Moore’s Tornado


ÅA Technology adoptionThe Chasm; a time of great despair, when early-

market’s interest wanes, and the mainstream market is still not comfortable.

The Bowling Alley; a period of niche-based adoption in advance of the general marketplace

The Tornado; mass-market adoption - when the general market switches over to a new infrastructure

MainStreet; aftermarket development, flesh out the full potential of the infrastructure

End of life; can come too soon in High-tech due to disruptive technologies


ÅA The Value Proposition

TechnologyProduct

MarketValue

Proposition ProblemBenefits

Management

Course outlineAssignmentsIntroductionTech changeIdea, InventionInnovationE-shipThe Purposeof BusinessObjectivesDiffusion ofInnovationsValue Proposition

ÅA

Assessing High Technology

ÅA Technology Assessment

TechnologyFunctional Capabilities

Benefits

Course outlineAssignmentsIntroductionIdea, InventionInnovationE-shipValue PropositionTech Assessm.

ÅA The new technology will provide increased capabilities to the user.

Technology should yield significant benefits in: Performance Functionality Capabilities Cost reduction Two or more of the above


ÅA Product Technology

This technology is not a radically new, disruptive technology that will replace current technology Examples: 8” to 5 1/4” to 3 1/2” disk

drives Might be more expensive initially, lower

cost after majority adoption


ÅA Product Technology

There are no technology standards issues. Technology based on stable standards Not in a current technology standards

conflict (or will this replace an existing standard

that is outmoded)


ÅA Example: Portable Personal Computers

Functional Capabilities Weight Size/Volume Processor speed

Mhz Battery life

Benefits Portablity Effective compute

power Maximum time

without power connection


ÅA Example: Fiberoptic Cable

Functional Capabilities Low

weight/size/cable Less signal

attenuation High message

volume capacity Fast transmission Immune to cross

talk, RFI and EMI

Benefits Easier to install;

lower cost Fewer re-

transmission amplifiers

More clear signals Easier to trouble

shoot & maintain


ÅA Example: Email

Functional Capabilities Multiple addressees Instantaneous,

electronic transmission One click reply &

forward Stored addresses Electronic message

storage

Benefits Real time

communication Easy mass mailing No delay Quick & easy response Minimal No paper, no postage,

no envelopes, no storage cabinets

BUT THERE ARE NEGATIVE BENEFITS AS WELL


ÅA Example: Cellular Short Message Service (SMS)

Functional Capabilities 160

characters/message Faster to transmit than

voice ;minimum transmission time

Message immediately transmitted

Email on a cell phone

Benefits Less costly to

transmit Cellular services

price lower than voice calls

Silent, doesn’t ring, discreet messaging

Instantaneous transmission


ÅA Market Hypotheses

Competitive environment acceptable 1 or 2 major competitors maximum

Segment addressable Segment is unique, identifiable,

reachable

Segment critical problem Target customers can verbalize their

problem Serious problems exist


ÅA More Hypotheses

Small segments better for startupsSegment knowledge critically

important


ÅA Product Hypotheses

H: Product is unique “breakthrough” Advanced over current state of

technology

H: Product concept is proven Developed and beta tested Solid technical foundation No standards issues


ÅA The Value Triad Basic Elements of a Value Proposition

Customer

Product Application

ValueProposition


ÅA The Value Triad

An analysis toolHas three inter-related elements :

Product Customer Application: A set of functional

capabilities or features

All three interact to create a “value”This “value” is what customers buy


ÅA The Value Proposition

The combination of product & application creates value for a particular customer segment

Is something to sellForms the basis of:

Marketing Advertising and public relations Promotional programs


ÅAChange any element of the triad and

it creates an entirely new value proposition


ÅA Value Triad Example

Customer: Consumer in their own kitchen

Product: A $3.00 manual eggbeaterApplication: Bake a family birthday cakeValue Proposition:

“A manual eggbeater can save you time and energy over using a spoon to bake a single cake”


ÅA Another version

Customer: Owner of Bed & Breakfast Inn

Product: A $350 Hobart table top mixer

Application: Making pancakes for 10 guests every day

Value Proposition: “The Hobart mixer is a faster, more efficient

mixer that is sturdier, reliable, and suitable for significant daily use”.


ÅA And a third version

Customer/Buyer: Finnish Army User : Military cook/bakerApplication: Baking 500 cakes/dayProduct: $3,500 Large capacity,

heavy duty, floor mounted industrial mixerValue proposition:

“This industrial mixer provides high capacity, high performance and very long term reliability”.


ÅA Value Matrix

Frequently the product is already definedThen 2 variables: Customer & ApplicationCan use a spreadsheet analysis:

Rows: Applications/ Features Columns: Customer target market segments

Rank each application and customer type 1 to 5: 5 = “must have”, 4 = “should have”, 3 =

“nice to have”, 2 = “useable, but not important”


ÅA A “Must Have” CompellingReason To Buy

Critical to product launch successWithout it you’ll probably never get to

see the chasm, let alone cross itAbsolutely required to cross the

chasm and to sell early majority pragmatists


ÅAEarly majority/Pragmatists don’t buy

“4s - Should Have” value propositions

The strength of the value proposition must exceed the pragmatists’ fear and risks of buying a high tech discontinuous product


ÅA A “Must Have” Value Proposition is a Compelling Reason to Buy:

Three sources of a “Must Have”: #1 - Provides a dramatic competitive

advantage #2 - Radically improves productivity #3 - Significantly reduces costs


ÅA “Must Have” #1: Provides a Dramatic Competitive Advantage

Advantage not previously availableDramatic, significant, not minorIn a major operational areaExamples?ATM, CT scanner, Polaroid camera,

Xerox 914 copier, Birth control pill


ÅA “Must Have” #2: Radically Improves Productivity

Improves productivity of a well-understood critical success factor

Superior price-performanceExamples?CAD software, e-mail, Internet search

engines, word processing & spreadsheet software, Viagra


ÅA “Must Have” #3 Significantly Reduces Operating Costs

Must be visible, verifiable, significant, quantifiable, easy to prove

“Free” offers get attentionExamples?ATM, laparascopic surgery,

spreadsheet & word processing software, online software distribution


ÅA CROSSING MOORE’S CHASM

Difficult to cross the chasm if only have 1 of the 3 sources of “must have”

Better to have 2 of 3 sourcesBest to have all 3 sources

ATMs Laparascopic surgery


ÅA Laparascopic Surgery

Why has this method of surgery become so popular?

Can you determine the sources of the Compelling Reason To Buy?


ÅA Laparascopic Surgery

Dramatic competitive advantage Faster patient recovery, reduced pain, safer Patients go to doctors & hospitals who do it

Radically improves productivity Doctors spend less time per surgery & post op

Significantly reduces costs Less time in hospital = less cost Insurance companies benefit, lower premiums


ÅA Value Matrix Exercise for Any Technology

Develop a value matrixVertical axis = applications/featuresHorizontal axis = Target customersRank each cell 1 through 5

1 = “not usable”, 2 = “minor benefit” 3 = “nice to have” 4 = “should have” 5 = “must have”


ÅA

Back to Moore

The Bowling Pin model

ÅA Bowling Pin Model

Approach niche market expansion in as leveraged a way as possible - towards the tornado

A niche requires its own whole product to be fully complete before it can adopt the new paradigm

Course outlineAssignmentsIntroductionIdea, InventionInnovationE-shipValue PropositionTech Assessm.Bowling Pin

ÅA The Bowling Pin Model

Niche market (risk of being stuck in the middle (Porter, 1980)

Knowledge spill-overKnowledge leverage and stretchingOne shot and several hits - as many

as possible!


ÅA Bowling Alley Market Development

Seg 1App 1

Seg 1App 2

Seg 2App 1

Seg 1App 3

Seg 2App 2

Seg 3App 1

WholeProduct

CustomerReferences


ÅA Principles of the Bowling Alley Strategy

“Pick on someone your own size” The primary objective to establish

yourself as the market leading standard• Merita Solo/Wells Fargo

The segment has a very good reason to buy

The segment is not well served by any competitor


ÅA Principles of the Bowling Alley Strategy

Focus on the end-user community not on the technical community Not on the doctor but the patient Not on the operator but on US

Customer-orientation versus product-orientation monipuolinen vs. monimutkainen


ÅA Rejecting the Bowling Alley

They require time to implement; time which is a shortage in fast moving industries -therefore thought not to work

Companies tend to be happy with their first achievement - “we’re aiming for 1% market share”; satisficing

Serving a niche may require to hefty product and too much service, which paralyses the organisation

The structure of the consumer market does not support bowling alley strategy (functional food)


ÅA Tornadoes

The focus shifts from the economic buyer to the technical buyer

Ignore the customer; people are lining up anyway they do not want to be courted they want to be supplied they want the commodity Internet is said to be the greatest commoditiser!

The tornado requires distribution channels and logistics - can you afford it? (Bowling Alley)

Course outlineAssignmentsIntroductionIdea, InventionInnovationE-shipValue PropositionTech Assessm.Bowling PinThe tornado

ÅA On Main Street

From niche market to commodity market

Focus on the end-usermass customisationyou already have the customers just

continue feeding themget closer to customers - markets

are conversations!

Course outlineAssignmentsIntroductionIdea, InventionInnovationE-shipValue PropositionTech Assessm.Bowling PinThe tornadoMain Street

ÅAThe Main Street of the Information Age

The Tornado sell to infra buyers drive price points

ever lower to maximise market share

attack the competitor to gain market share

position yourself horizontally as standard global infrastructure

The Main Street sell to end-users +1 value

propositions to gain margins

compete against yourself to gain margin share

position yourself in niche markets based on individual preferences


ÅA Segmentation

In the early market - beware of segmenting - you must not!

In the bowling alley - you must!Once inside the tornado - don’t!When on Main Street - segment you

must! But not in the same way as in the bowling alley - the basis is now your +1; the value proposition


ÅA Other barriers

Apart from technology

culturalpsychological

The barrier is not objective but subjective


ÅA Predicting TornadoesBowling alley successes help start tornadoes as

they validate product architectures - one niche market success in place

Price point is a good indicator of when you’re in reach, i.e. when the tornado comes - mobile phones became the commodity

killer apps. (do tornados cause killer apps or vice versa?)

When a gorilla comes around - you are in a tornado


ÅA The Gorilla Advantage

Competitive advantage getting more customers - market leader

effect• business partners actively bring in new customers

keeping more customers• barriers to entry and switching costs

driving costs down keep profits up

Course outlineAssignmentsIntroductionIdea, InventionInnovationE-shipValue PropositionTech Assessm.Bowling PinThe tornadoMain StreetGorillas

Åa management of innovations and entrepreneurship malin brännback fall 2004

Documents

course outline slide

p business plans

p contact lenses

entrepreneurial business

business plans gr

entrepreneurship questions

individual assignments

large individual assignment