Entrepreneurship & Innovation

Week 4
2
3
4
5
Product innovation

Process innovation

Marketing innovation

Organisational innovation

Technological innovations

Social innovations

Business Model innovation

Product innovation involves the introduction of
a new good or service that is substantially
improved. This might include improvements in
user friendliness, components and materials,
software in the product, functional
characteristics, technical abilities or any other
dimension.
A new or significantly improved production or
delivery method. This includes significant
changes in techniques, equipment and/or
software.
Development of new marketing methods with
improvement in product design or packaging,
product promotion or pricing.
Involves the creation of new organizations,
new organisational methods in business
practices, ways of running organizations or
new organizational behavior, workplace
organisation or external relations.
Based on specific technology, invention,
discovery.
In critical historic periods more important than
technological ones (mail, educational systém,
social systém, health care,..)
Involves changing the way business is done in
terms of capturing value e.g. Compaq vs. Dell.
 Diffusion
 New to the firm
 New to the market
 New to the world
 Disruptive innovations
Diffusion:
● is the way in which innovations spread, through
market or non-market channels, from their first
worldwide implementation to different consumers,
countries, regions, sectors, markets, and firms.
● Without diffusion, an innovation will have no
economic impact.
● The minimum entry for a change in a firm’s products
or functions to be considered as an innovation is that it
must be new (or significantly improved) to the firm.
New to the firm:
A product, process, marketing method, or organisational
method might already have been implemented by other
firms, but if it is new to the firm (or in case of products
and processes: significantly improved), then it is an
innovation for that firm.
New to the market:
 the firm is the first to introduce the innovation onto
its market.
 The market is defined as the firm and its competitors.
 The geographical scope is subject to the firm’s own
view of its operating market and thus can include
both domestic and international firms.
New to the world:
 the firm is the first to introduce the innovation for
all markets and industries, domestic and
international.
 implies a qualitatively greater degree of novelty
than new to the market.
Disruptive innovations:
 an innovation that has a significant impact on a
market and on the economic activity of firms in
that market.
 focuses on the impact of innovations as opposed
to their novelty.
 These impacts can, for example, change the
structure of the market, create new markets, or
render existing products obsolete. However, it
might not be apparent whether an innovation is
disruptive until long after the innovation has been
introduced.
There are four distinct types of innovation, these are
as follows:
 Invention - described as the creation of a new
product, service or process
 Extension - the expansion of a product, service or
process
 Duplication - defined as replication of an already
existing product, service or process
 Synthesis - the combination of existing concepts and
factors into a new formulation
Entrepreneurship

 Identify a need or opportunity

 Create a solution - Innovation
 Implement solution to create value
 Harvest or other long-term strategy
 Imitative Incremental Evolutionary

Revolutionary Radical

The secret to innovation is uncovering an unmet consumer need

and the filling it in an innovative, creative way.
Imitative
• Copies something well-known and accepted
Incremental
• Small improvements; faster, better, cheaper
Evolutionary
• New to firm but not to world (i.e., technologies in new places)
Radical
• Technologies that give large performance improvements or lower costs
Revolutionary
• New to individual, firm, and the world

Best Opportunities between Incremental and Radical

 Latest science and technology

Creativity Innovation Entrepreneurship

• Production of novel • Refining, evaluation • Creation of value
and useful ideas and first prototypes in the marketplace
• Discovery of of the new ideas • Exploitation of
opportunities • Evaluation of opportunities
• Output: new ideas opportunities • Output: new product,
• Output: prototype service, or process

Needs in society and the marketplace

 within a company or industry

social & intellectual environment

Three exist outside a company’s
Four sources of opportunity exist

• Unexpected • Demographic
occurrences changes
• Incongruities • Changes in
• Process needs perception
• Industry & • New knowledge
market changes
 The unexpected success
 The unexpected failure
 The unexpected outside event

 Nutrasweet
 Post it notes
 Defective recorder and
defective speaker = Walkman
 Discrepancy or dissonance between what is
and what ‘ought to be’
 Fueled by intellectual arrogance, and
dogmatism
 Opportunities of small, highly focused
organizations
 Volkswagen beetle (no water, no
radiator)
 Coffee that will not keep you awake
 Beer that will not make you drunk
 Starts with the job to be done and is task-
focused rather than situation- focused

 Mobile Apps for

- banking services
- logistics and supply chain for fast
food operations
 Distance learning
 Industry and market structures are quite
fragile
 Changes as opportunities for outsiders and
threats for insiders
 Outsourcing India and the Philippines
 Business Processes
- transcription
- programming
- call centres
 Manufacturing facilities to Asia and S E Asia
 Sharp demographic changes (migration,
policies, babybooms, labor force participation
of women) offer opportunities for
entrepreneurs
 Most such events have already happened, and
need is to accept the reality and not just see it
as an opportunity
 Needs related to changes in
 Age
 Gender classifications
 Ethnicity
 Being open to changes in perception
 Timing is of essence

 Fat was good

 Fat is not good
 new healthier products
 new food substitutes
 Coconut oil (Blue Coconut oil) ?
 Sweetener?
 Mcdonald required to show calories
 Knowledge- based innovation is the superstar
of entrepreneurship!

 Microelectronics
 New programming methods
 Biotechnology
 Nanotechnology
 Agriculture – GM fruits and
vegetables
 Begin with analysis of opportunities.
 Innovation as conceptual and perceptual.
 Simple and focused.
 Effective innovations start small.
 Aims at leadership.
 Don’t be clever. Anything too clever – FAIL!
 Don’t diversify or do too many things at once
 Don’t diversify for the future; diversify for the
present.
 Innovation is work.
 To succeed, innovators must build on their
strengths.
 Innovation is an effect in economy and
society.
39