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Chapter 1
Introduction
Chapter
1
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Importance of Technological Innovation
• Technological innovation now the single most important driver of competitive success in many industries• Many firms earn over one-third of sales on products
developed within last five years
• Globalization has increased competitive pressure;• Product innovations help firms protect margins by offering
new, differentiated features.• Process innovations help make manufacturing more
efficient.
Importance of Technological Innovation
• Advances in information technology have enabled faster innovation• CAD/CAM systems enable rapid design and shorter
production runs
• Net effect: • Shorter product lifecycles (more rapid product
obsolescence)• More rapid new product introductions• Greater market segmentation
Impact on Society
• Innovation enables a wider range of goods and services to be delivered to people worldwide• More efficient food production, improved medical
technologies, better transportation,etc.
• Increases Gross Domestic Product by making labor and capital more effective and efficient
• However, may result in negative externalities, • E.g., pollution, erosion, antibiotic-resistant bacteria
Impact on Society
• The majority of R&D funds spent in OECD countries come from industry, and percentage has been increasing.
Innovation by Industry: The Importance of Strategy
• To be successful at innovation, firms need carefully crafted strategies and implementation processes.
• Innovation funnel• Most innovative ideas do not become successful new
products.
Research Brief
How long does new product development take?• Study by Abbie Griffin of 116 firms found:
• Length of development cycle varies with innovativeness of project
• Incremental improvements took 8.6 months from concept to market introduction
• Next generation improvements took 22 months.• New-to-the-firm product lines took 36 months• New-to-the-world products took 53 months.• Half of the companies had reduced their cycle time by an
average of 33% over last five years.
The Strategic Management of Technological Innovation
• Part One: The foundations of technological Innovation• Sources of innovation
• Types and patterns of innovation
• Standards battles and design dominance
• Timing of Entry
Part I: Industry Dynamics of Technological Innovation
Chapter 2Sources of Innovation
Chapter 5Timing of Entry
Chapter 4Standards Battles
and Design Dominance
Chapter 3Types and Patterns
of Innovation
The Strategic Management of Technological Innovation
• Part Two: Formulating Technological Innovation Strategy• Defining the organization’s strategic direction
• Choosing innovation projects
• Collaboration strategies
• Protecting innovationPart II: Formulating Technological Innovation Strategy
Chapter 6Defining the Organization’s
Strategic Direction
Chapter 9Protecting Innovation
Chapter 8Collaboration
Strategies
Chapter 7Choosing Innovation
Projects
The Strategic Management of Technological Innovation
• Part Three: Implementing Technological Innovation Strategy• Organizing for innovation
• Managing the new product development process
• Managing new product development teams
• Crafting a deployment strategy
Part III: Implementing Technological Innovation Strategy
Chapter 10Organizing for
Innovation
Chapter 13Crafting a
Deployment Strategy
Chapter 12Managing New
Product Development Teams
Chapter 11Managing the New
Product Development Process
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