ENTR 3000 Exam Review Notes

ENTR 3000: Principles of Innovation & Entrepreneurship - Exam I Review Notes

Exam Details

  • Exam Date: Thursday, February 26

  • Format: In Class

  • Duration: 75 minutes

  • Total Questions: 40

    • Approximately 34 questions will be multiple choice, true/false, or matching

    • Some questions will be 'Select All That Apply'

    • About 6 questions will be short answer or fill in the blank

  • Preparation Advice: Review all course materials; focus specifically on key slides mentioned throughout the course.

Week 1: Jan 22 - Introduction to Innovation

What is Innovation?

  • Definition (Luecke & Katz, 2003):

    • "Innovation is generally understood as the introduction of a new thing or method… the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services."

  • Process of Innovation (Bessant & Tidd, 2024):

    • Innovation is the process of translating ideas into useful new products, processes, or services.

Entrepreneurship and Innovation

Definition of Entrepreneurship

  • Key Concepts:

    • The process of exploiting innovation to create commercial and/or social value.

    • Can be driven by individuals or teams within and outside existing organizations.

    • Entrepreneurs are responsible for moving innovations to market.

Successful Innovators

  1. Dimensions of Innovation:

    • Explore and understand different aspects of innovation.

    • Manage innovation as a process.

    • Create an environment conducive to repeated innovation development (building organizational capabilities).

    • Focus this capability to advance organizational objectives (Innovation Strategy).

    • Build dynamic capability – adapt and respond to a changing environment.

Types of Innovation

Innovation Classifications

  1. Radical vs. Incremental Innovation:

    • Radical Innovation: Degree of newness compared to existing products/processes; may be considered more radical by different observers over time.

      • Example: Digital photography's impact on Kodak vs. Sony.

    • Incremental Innovation: Minor adjustments to existing practices.

  2. Architectural vs. Component Innovation:

    • Component Innovation: Changes to one or more components of a product system without significantly affecting overall design.

    • Architectural Innovation: Changes overall design or how components interact.

  3. System Level vs Component Level Innovations:

    • System Level: New versions of motor cars, airplanes, etc.

    • Component Level: Improvements to individual components or existing systems.

The 4P’s Model of Innovation Dimensions

  1. Product: Changes to the products/services offered by an organization.

  2. Process: Changes in how products/services are created and delivered.

  3. Position: Changes in market context for introduction of products/services.

  4. Paradigm: Mental models that alter organizational actions.

Week 2: Jan 27 - Sources of Innovation

Push vs. Pull

  1. Knowledge Push:

    • The company creates a new product or technology without market research (e.g. Bell Labs).

    • Example: Origin of touch screen technology.

  2. Need Pull:

    • Solutions emerge from customer needs identified through market research (e.g. Proctor and Gamble's expansion).

Recognizing the Opportunity

  1. Base of the Pyramid (BOP):

    • Emerging markets represent a significant and often unserved market (C.K. Prahalad's concept).

  2. Jugaad (Frugal) Innovation:

    • Hindi for innovative, improvised solutions born from ingenuity.

    • Often includes reverse innovations that migrate back from emerging markets.

  3. Mass Customization:

    • Offering tailored products/services to meet individual tastes effectively while minimizing excessive costs.

  4. Users as Innovators:

    • User experimentation leads to innovation (e.g., adaptations of pickup trucks).

  5. Learning from Others:

    • Benchmarking against others to discover new processes or products (e.g., Southwest Airlines' efficient turnaround inspired by Formula 1).

  6. Recombinant Innovation:

    • Utilizing existing ideas in new contexts (e.g., Reebok pump technology).

  7. Design-driven Innovation:

    • Focus on the aesthetics and user experience of products (e.g., Apple's and Tesla's designs).

Week 3: Feb 3 - Creativity

Defining Creativity

  • Definition: Creativity translates new and imaginative ideas into reality, characterized by recognizing new patterns, connections, and producing tangible solutions.

Divergent and Convergent Thinking

  1. Convergent Thinking:

    • Focused on refining and improving solutions, targeting a singular best answer.

  2. Divergent Thinking:

    • Explores multiple dimensions of a problem, fostering new connections.

Climate for Creativity

  • Support, Understand, Nurture vs. React, Assume, Insist, Negative (enhancements and avoiding detriments).

Week 4: Feb 10 - Search Strategies for Innovation

Market Strategy

  • Exploit vs. Explore: Familiar vs. Unknown in technology settings.

Levels to Innovate

  1. Fluid Stage:

    • Exploration, uncertainty, flexibility.

  2. Transitional Stage: Standardization and integration.

  3. Specific Stage: Focused on integrated practices.

Learning to Innovate

  • Absorptive Capacity: Organization's ability to recognize and utilize new knowledge.

  • 5 Whys and a How Exercise: Tool for identifying root causes and formulating solutions through iterative questioning.

Example of 5 Whys:

  • Scenario: A meal kit startup faces high customer churn.

    • 1. Customers perceive the service as too expensive.

    • 2. They don't see value for the price.

    • 3. They're not using all their meals.

    • 4. Delivery timing conflicts with schedules.

    • 5. Only one fixed delivery day is available.

Solutions Proposed:

  • Adding flexible delivery options, including customizable meal plans.

Week 5: Feb 19 - Digital Innovation

Definition of Digital Innovation

  • Involves the creation, capture, storage, processing, and communication of information through technology.

Levels of Digital Capabilities

  1. Basic Digital Capabilities: Storage of data (e.g. Netflix storing user profiles and content).

  2. Information Processing: Analyzing and synthesizing user data for insights.

  3. Integrated Information Systems: Connecting various functions in real-time for efficient operations.

  4. Platforms & Integrated Networks: Connecting creators, audiences, and leveraging global infrastructure.

Network Effects

  • Increased user base results in more data, better services, and continual growth.

Week 6: Feb 24 - Social Innovation

Entrepreneurial Identities

  • Darwinians: Focused on competition and business success.

  • Communitarians: Interested in community contribution.

  • Missionaries: Driven by a desire to change the world.

Corporate Social Responsibility (CSR)

  • Corporations have economic, legal, and social responsibilities (McGuire, 1963).

  • Triple Bottom Line (Elkington, 1994):

    • People: Stakeholder consideration.

    • Planet: Environmental impact.

    • Prosperity: Economic influence.

Framework for Sustainability-led Innovation

Innovation Objectives

  1. Operational Optimization:

    • Focus on compliance and improving existing operations.

  2. Organizational Systems Transformation:

    • New products/services, viewing sustainability as market opportunity.

  3. Building Societal Change:

    • Collaboratively creating new models for impact.

Levels of Sustainable Innovation

  1. Operational Optimization:

    • Compliance, efficiency with examples including pollution controls and renewable energy usage.

  2. Organizational Transformation:

    • Creation of disruptive products/services with sustainability focus.

  3. Systems Change:

    • Collaboration across organizations for societal impact, such as IKEA’s approach to sustainable materials.