MARK 486 Notes

Topics: Product management, New product development, Innovation Pages: 7 (3466 words) Published: October 28, 2014

Mark 486
Chapter 1:
How to really innovate
Most companies have ambitious growth goals the problem is that there are only so many sources of growth (4) Market growth
Market share increase
New markets
Growth is expensive
Market in many industrialized countries and industries are mature and increasingly commoditized; gains in market shares are expensive and acquisitions often don’t work Even traditional product development (line extensions, improvement, and product modifications) seems depleted (useless) and only serves to maintain market share Shareholders and executives want a steady stream of profitable and high profile new products, but management practices and the competitive and financial environments are steering companies in a different direction, initiatives that are :Towards smaller Less risky

Less ambitious
They are preoccupied with short term profit abilities, disadvantageous: Difficult to create highly profitable new products yet maximize short term results – the goal of “faster, better, cheaper” Even with a longer term focus, its really difficult to create that game changing innovation these days many markets and sectors simply appear barren (unproductive) Is True Innovation Dead

Launching a truly differentiated product is rare these days
Developing and launching truly differentiates new products is rare these days for most firms Research show that the key to profitability stems from developing and launching a unique superior product with a great value proposition Markets are mature and increasingly commoditized difficulty in creating a “breakthrough” product and sustaining competitive product advantage. Ex: food industry, consumer packages goods in general, chemicals and plastics Disruptive technologies: source of much product innovation, are scare in most industries Even today’s high tech industries struggle: New technologies do emerge and dramatically generate new sales and profits (cell phones, digital cameras, software) As these markets mature, user’s needs change quickly and competitors launch new product after new products difficult to sustain product competitive advantage Result of this dearth (lack) in true innovation is a drop in productivity in R&D Decrease in productivity and time to market are measurable performance outcomes of whats wrong with innovation: Management focus on fast, low-risk and simple development projects New-to-the world products are down to 11%

Improvement and modifications to existing company products- the least innovative category of developments- have almost doubled are up 40% R&D spending has remained constant in the US
Innovative initiatives are missing sales and productivity from new product development are down Solution
True innovation: breakthrough products, services, and solutions that create growth engines for the future. In contrast to the “same old new product efforts”: extensions, modifications, upgrades, and tweaks, which swamp the majority of companies’ portfolios Industry needs some break through

Game changing,
Bolder product innovation initiatives in the development pipelines This means larger scope and more systems-oriented solutions and service packages Ex:
Apple iPod its success reveals true innovation at work Apple did not invent the MP3 player there was 43 competitors when they launched Apple first identified an attractive strategic arena (MP3s) whre it could leverage its strength to advantage then developed a solution that solved user’s problems: Cool, easy to use MP3

Green Mountain Coffee Roasters: Saw a need Created the K-cup and Keurig system Procter & Gamble’s Olay Skin Care: Rejuvenated based on preventing signs of aging in women’s faces relaunched the business with multiple new products focused on keeping women’s face young looking The 4 innovation vectors – the innovation diamond

The 4 vectors must be in place to undertake this different type of innovation to yield bolder and imaginative...
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