MGT 4090 - Week 10 Session 2 - Innovation & Entrepreneurship

Derive strategic implications of the crossing-the-chasm framework
Critically assess different types of innovations in the markets-and-technology framework

Reference: Exhibit 7.9
Source: Adaptation from G.A. Moore (1991), Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers

Technology Enthusiasts
- Market Entry: Introductory Stage
- Market Segment: 2.5% of total market potential
- Characteristics:
  - Engineering mindset
  - Proactive in pursuing new technology
  - Enjoys beta versions
  - Engages with product imperfections
  - Provides free feedback and suggestions
Early Adopters
- Market Entry: Growth Stage
- Market Segment: 13.5% of total market potential
- Motivated by imagination and creativity:
  - Asks, "What can this new product do for me or my business?"
- Marketing Strategy:
  - Direct communication of product potential is essential
Early Majority
- Market Entry: Shakeout Stage
- Market Segment: 34% of total market potential
- Decision Criteria: Practicality
  - Asks, "What Can This Do For Me?"
  - Weighs benefits vs. costs carefully
  - Relies on endorsements from others
- Importance: Key group to capture growth wave
Late Majority
- Market Entry: Maturity Stage
- Market Segment: 34% of total market potential
- Characteristics:
  - Less confidence in mastering technology
  - Waits for established standards
  - Preference for well-established brands
Laggards
- Market Entry: Decline Stage
- Market Segment: 16% of total market potential
- Characteristics:
  - Adopts new products only out of necessity
  - Generally averse to new technology
  - Typically not pursued as future customers due to small demand
  - Early and late majority transition to different products/services

Incremental Innovation
- Builds on established knowledge
- Characterized by steady improvements
- Targets existing markets using existing technology
Radical Innovation
- Involves novel methods and materials
- Based on an entirely new knowledge base or recombination of existing knowledge
- Targets new markets and technologies

Economic Incentives:
- Need to defend existing market position
Organizational Inertia:
- Presence of formalized processes and structures inhibits change
Innovation Ecosystem:
- Reliance on certain suppliers, buyers, and complementors limits exploration of radical innovations

Architectural Innovation
- Leverages existing technology in a new market
- Utilizes known components and existing technology in new applications
Disruptive Innovation
- Applies new technologies within existing markets
- Aims to meet existing customer needs with new product/process solutions

Continuous Innovation:
- Stay ahead of competition by fostering ongoing innovation practices
Protection Strategy:
- Safeguard the low-end of the market against disruptions
Self-Disruption:
- Proactively disrupt your own business model before competitors do