Strategic Innovation Outcomes

Flashcards covering key concepts from the lecture notes on Strategic Innovation Outcomes, Value Innovation, Business Models, Disruptive Innovation, and related theories.

What is the primary purpose of value innovation for businesses?

To serve as a competitive tool to grow market share and offer products without directly competing with other organizations.

What aspects are discussed regarding strategic innovation?

Managing disruptive strategies, identifying potential innovation, the relationship between value innovation and competitive advantage, comparing ocean strategies, and developing a business model.

What additional innovation topics are explored?

Innovation at the bottom of the pyramid, and the relationship between leadership and innovation in supportive organizations.

How are Blue Ocean strategies and value innovation related to innovation opportunities?

They are used together to pursue innovation opportunities.

How can organizational learning contribute to innovative competitive advantage?

Through the development of absorptive capacity.

Where do Red Ocean strategies typically emerge?

In overcrowded market spaces where competition is intense.

What is the role of business model innovation in the market?

It sets organizations apart and differentiates them in the market.

How can the application of BOP innovation strategies affect competitive advantage?

They can enhance competitive advantage.

What are key elements an organization must understand to maintain innovativeness?

How to begin the innovation process, the principles of the fuzzy front end, applied design thinking, and individual innovativeness.

What is the benefit of innovation theories?

They assist in deriving practical implications and predictions, and are useful in managing potential disruptive innovation.

What is a key difference between risk and uncertainty in innovation?

Risk can be measured, whereas uncertainty cannot.

What is strategic innovation?

It is the ability to create and revitalize a business idea and concept by changing the market, the competencies, and the business system of the organization.

What are the three key pillars upon which strategic innovation rests?

Strategic managers accounting for future and present strategies, recognizing that innovation and effectiveness require different organizations, and understanding that competition relies more on disruptive business models.

What characterizes a Blue Ocean strategy?

It is realized when an organization achieves value innovation that simultaneously creates value for both the buyer and the organization.

What characterizes a Red Ocean strategy?

It involves competing in highly contested markets, often on price, which can be damaging as businesses compete at each other's expense.

What are the four actions (ERRC framework) to create a new value curve?

Eliminate factors, Reduce factors, Raise factors, and Create factors.

What is technology innovation?

It involves the creation, development, and implementation of new or enhanced technologies, products, services, or processes, leading to positive changes and advancements.

What are the nine foundational elements of a business model?

Key partners, key activities, key resources, value proposition, customer relationship, channel, customer segment, cost structure, and revenue stream.

How does page 13 define strategic innovation?

The search for new ways of competing on the basis of customer value in existing industries, often by finding 'blue oceans' instead of competing in 'red oceans'.

According to page 14, how is disruptive innovation related to Schumpeter's concept of 'creative destruction'?

Disruptive innovation relates to the destruction, or disruption, of markets through innovation, aligning with 'creative destruction' where the market system incessantly revolutionizes the economic structure.

What is Bottom of the Pyramid (BOP) innovation?

Innovations that target the large numbers of the world's poor, aiming to harness their spending power by offering appropriate products and services.

What was Lamborghini's 'secret' for significant growth in H1 2024, as an example of value innovation?

Going hybrid with its Revuelto model, betting on partial electrification early in the high-end car market.

How is customer-delivered value determined?

It is the difference between total customer value (product, service, relationships/personnel, image value) and total customer cost (monetary, time, energy, psychic cost).

What is the ultimate goal of value innovation?

To deliver unique offerings that meet customer needs differently from existing alternatives, leading to a sustainable competitive advantage.

What are the two key components of value innovation?

Differentiation (creating unique, innovative products) and Low Cost (delivering the differentiated product or service at a lower cost).

According to Kim and Mauborgne's study, what strategy distinguished more successful firms from less successful ones?

More successful firms followed a strategy of 'value innovation,' which sought to do something 'new and different,' unlike less successful firms that focused on 'conventional strategies' of beating competitors.

What is open innovation?

A paradigm that suggests organizations should incorporate both external and internal ideas, utilizing both internal and external pathways to bring their technology forward.

What are the two main aspects of open innovation?

Leveraging external sources of knowledge to enhance internal innovation, and employing external avenues to access the internal knowledge market.

What is the main objective of sustaining innovations?

To foster growth by providing enhanced performance within existing markets.

How do established industry players typically perform with sustaining innovations?

They generally excel in their widespread commercialization due to greater financial resources, a larger customer base, and established processes.

What is a key difference between sustaining and disruptive innovation regarding their market scope?

Sustaining innovation operates within existing markets and technologies, while disruptive innovation ventures beyond the boundaries of the current market, creating entirely new products and businesses.

What are the three key drivers identified as jointly fostering strategic innovation in an organization?

Culture of innovation, Leadership, and the Innovation process.

What defines an organizational culture of innovation?

Shared values among individuals, acquired through employee interactions, encompassing regulations and principles, and recognizing and celebrating innovative accomplishments.

What are the five steps of the innovation process?

Searching the environment for opportunities, evaluating and ranking them, developing critical success factors, constructing a plan, and measuring success.

Name some common barriers to innovation for organizations.

Resource constraints, organizational culture and structure, regulatory and legal barriers, market and consumer factors, technological challenges, global and economic factors, information and knowledge barriers, and risk aversion.

What are four common innovation strategies?

First mover or leader, fast follower or defensive, imitative, and market segmentation.

According to the social deterministic school, what drives innovation?

A combination of external social factors such as demographic shifts, economic influences, and cultural changes.

What does the individualistic school contend about the source of innovation?

Innovation stems from distinctive individual talents, suggesting that innovative abilities are inherent.

What does the resource-based view of innovation focus on?

The organization and its resources, capabilities, and skills.

What are some characteristics of disruptive innovations?

They often initially perform badly, have the potential to redefine the competitive landscape, and can be used by small businesses against entrenched competitors.

How did Schumpeter describe the process of 'creative destruction'?

As an 'industrial mutation… that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one'.

According to Schumpeter, how should business strategy be viewed?

It acquires its true significance only against the backdrop of creative destruction and cannot be understood irrespective of its role in this 'perennial gale'.

What does a business model describe?

The reason for how a business creates, delivers, and captures value, answering questions like 'Who is the customer?' and 'How do we make money?'.

What are some potential pitfalls of business model innovation?

New models can conflict with traditional structures, leading to resistance to experiments, potentially different customers or distribution channels, and being starved of resources.

What are strategic triggers for changing a business model, according to Johnson et al.?

Large numbers of potential customers being locked out, an opportunity for new technology, an opportunity for a 'job to be done', protection against low-end disrupters, or a shift in the basis of competition.

How do disruptive innovations typically work?

They initially underperform established products but have unique attributes valued by new/fringe customers, often being cheaper, simpler, smaller, and easier to use.

What is the ambidexterity theory of leadership for innovation?

It describes leadership that switches between exploration (supported by opening behaviors) and exploitation (enabled by closing behaviors), requiring temporal flexibility to switch as needed.

What type of reasoning is Design Thinking based on, and what are its key phases?

It is based on abductive reasoning, seeking to explore 'what could be,' and its phases are Inspiration, Ideation, and Implementation.

What does understanding the concept of responsible innovation involve?

Grasping the ethical implications of innovation as a powerful force influencing natural and social realms, as well as the human condition, by exercising foresight to anticipate consequences.