BSM 600 Types of Innovation

Incremental Innovation

Small improvements to existing products/ services (better, not new) with low risk, continuous imprvements and building on existing tech (ex. New iphone updates, better battery life, software updates, etc)

Radical Innovation

Completely new products/ tech that change markets (new invention) with high risk, high uncertainty, and creates new markets (ex. first smartphone, electric vehicles, AI breakthroughs)

Disruptive innovation

Starts simple/ cheap and improves to replace incumbents (starts weak, ends dominant) wirh targets overlooking customers, initially lower perfomrance, eventually cominates market (ex. netflix vs blockbuster, uber vs taxis, and budget airlines)

Modular Innovation

Change components but keep system architecture the same (swap parts, same system) with same structure, improve parts, no redesign of system (ex. upgrade phone camera, replacing laptop parts, imrpving engines)

Architectural Innovation

Same components but arranged in a new way (same parts, new combination) reorganizing system, creates new use cases, hard forincumbents to adapt (ex. smartwatch phone tech in writs form)

Freemium Model

Basic version is free, premium costs money with large user base, menetization upgrades, common in apps (ex spotify, linkedin, mobile games)

Bundling Strategy

Selling multiple products/ services together as a package (combo deal) with increased value perception, encourages multiple purchases, can increase switching costs (ex. stremaing bundles, microsoft office suite, internet and tv and phone packages)

What innovation is a small improvement

incremental

What innovation is completely new tech

radical

What innovation is weak then later dominates

disruptive

What innovation is the same system but improved parts

modular

What innovation is same parts then new arrangement

Architectural