Innovation and Technology Management
1) Why do you think so many innovation projects fail to generate an economic return?
There can be various reason that the project might fail but from the there can be some major issues which can be solved without any trouble. There are main 3 point suggested in the core text which could be considered as the main points, they are as followed:
a) An in-depth understanding of the dynamics of innovation
b) A well-crafted innovation strategy
c) Well-designed processes for implementing the innovation strategy
(Extracted from Core text Strategic Management and Technological Innovation, pg 5)
It is very well made clear that a clear understanding about the innovation made is very necessary, the developer and the user should have an idea, that why this innovation is made. And what would the advantages and disadvantages of this innovation bring about in the human life.
Very well crafted innovation strategy will make a huge difference in the innovation; this means due to having a well planned strategy, we can decide how the things are done and how everything should be planned and taken over.
Obviously, there should be a proper method to release the innovation to the market. A very good advertising campaign should be taken over, and consumers should be made to realize that they need this innovation; they should be made to feel that this is what they have been waiting for.
Apart from the point suggested in the core book, there are some other changes which can make a major difference:
There can be various other reasons for a project or innovation to fail. Having environmental change can lead to failures, this means if there is ant natural disaster taking place, then there is a possibility that it may affect the project greatly. For example; In case of tsunami the whole production area can be carried over with the water.
If the quality parameter would go unchecked, then there can be a lack in the quality of the innovation produced, hence due to the reason it can be said, that quality is one of the most important aspect of an innovation. For example; A new soap is developed, which does not meet the standard, then it would not make a successful move in the market.
Inability to meet customer expectations
If the customer does not happen to get what they want then they will not buy the prepared product. Hence customer expectation is a must. For example; a customer asks for a phone with 3G facility, radio facility, camera facility, and basic requirements. Then the manufacturer must at least try to fulfill 75% of the customer requirements, or else the customer would not like to buy the product.
Manufacturing cost is high
If the manufacturing cost of a product is too high, than the margin line of the product, then it is natural for the innovation to go on loss. For example; if manufacturing of a system takes 100,000/= but the market price for the innovation is 75,000/= then a loss of 25,000/= will be faced by the manufacturers. Hence if many products of same kind are produced in gross, then the manufacturer will face a great loss.
2) What are some of the advantages and disadvantages of:
a. Individuals as innovators
Freedom of thinking with no bounded barriers, e.g. no time frame allocated for the completion of the work
Still the invention can take the whole life time even
Self financial supplement to continue the whole innovation process, hence the whole profit is to oneself
In case of financial support their will be no one to help
Free to make modifications
No one to advise and decide if modification is actually required or not.
The credit will not be shared
Will have to face high amount of problem
b. Firms as innovators
Finance is unlimited
Bounded with barriers
Presence of many workers prevent the work being stopped due to not enough knowledge about certain technology
High amount of employees, high competition in the organization
Customization of the product is affordable
Customization can be time consuming, and financial limitations may occur due to this.
Has the capability to do continuous incremental innovation
Project can be taking too long, hence the interest of doing it reduces
Have relationship with other authoring bodies
Competition between firms are high
Firms have structure and facilities to do research and development and come to a conclusion
The credit would be distributed among the whole organization
Firms will have their own distribution channel to distribute the product
Product is created in lots; hence due to customer refusing, great loss can be faced.
Collaboration with other firms
High competition to be faced
c. Universities as innovators
Intellectual capacities and the present of expertise to do the research
Too many cooks may spoil the broth
Multicultural and high knowledge pool is found
Different thinking can lead to problems eg: religious cultural.
Working can be dragged more than required
Has the royalty
Can be extremely challenging
d. Governments as innovators
Raising funds for project is easy
As the government changes the finishing date of the project extends
Competition is high
Restriction of research can be controlled
Less freedom for the flow of ideas
Combination of universities and firms can be seen
Credit is taken under government only
e. Non-profit organizations as innovators?
Easily generate funds and government tax relief
Easy for financial bribe to take place.
3) What are some of the ways a firm can try to increase the overall value of its technology and its likelihood of becoming the dominant design?
Increasing the market value of the innovation, it should have the consistency of a domain design. This means that their product should have a design which is unique for it. When a product is produced, there can be various designs formed, but out of all only one design will be selected. The selected design will have something special and would be something different from the usual design. Having an elegant design outlook of the product will make sure to have high sales, because the first thing which the customers look at is the way the product looks.
When a domain design is made and is put to the market, through which an overall value of the technology should be gained, there are few things which the firm should try to increase within.
First of all, a record should be made on what is the impact of the technology on the customers and how would they be benefited through the innovation. Hence the product should have a stand-alone value. This is the value of the product itself. If the value of one single product could be profitable, then it sure to sell the same product in gross would bring a grand profit to the firm.
But before launching the product to the market, risk factors should be kept in mind, and what effect would It have on the market, the effect which will be considered here could even the be the after effect caused due to the certain product. For example if we take the newly released Chinese Mobile Phone, which may cause severe problem to the user, it is said by the researchers that these phone may cause hearing problem to the users. Hence the risk factor should be minimized completely.
Recent innovation are causing a great harm to the environment of the world, hence the users of today always want to use product which does not harm the environment. In short usage of environmental friendly product will be having more market.
When all the externalities, utilities and joint market get together in a complementary product all with the given points, the product can be said to be a domain product with a domain design.
Core Text; Strategic Mangement of Technological Innovation, by Melissa A. Schilling