What are the main building blocks for profiting from innovation and which strategies are available? Analyze using this framework the case of Microsoft Kinnect (user interface device for games by movement and voice).
There are three building blocks for profiting from innovation. The first one is the regime for appropriability; it includes the external environmental factor with a special emphasis on the nature of technology and effectiveness of the legal framework, designed for protecting the innovation from various violations. The second building block is dominant design paradigm; it checks whether innovation falls under the category of pre-paradigmatic stage. In case there is no theory or academic/practical framework for the new innovation, then it is placed under the first stage; imitators cannot easily imitate the innovation. On the other hand, if there is an academic/standardized framework for such innovation, it falls under the second category; and imitators can step-in to copy the innovation with convenience. The third block is complementary assets; these assets assist the innovation so that they can become useful for the consumer. The idea of complementary assets revolves around know-how of the innovation.
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The strategies that can be devised or making profits via innovation depends on two factors. The first factor is regime for appropriability, and the second factor is the positioning of imitator/innovator. The innovator can get into a contract with its micro-environment players; this strategy is beneficial in case if tight appropriability. The second strategy is tagged as integration in which the innovator can have complete control over complementary assets and various other aspects of an invention. The third strategy is that innovator can combine aforesaid strategies and get into contracts with relevant parties, along with integration wherever seem feasible.
Microsoft operates under tight appropriability regime as the legal framework for protecting ideas and innovations is very strong in the USA. The case mentions that Nintendo has already been successful this innovation, which means that Kinnect is in paradigmatic stage, and there is a high risk of imitation. Interestingly, Kinnect itself is a complementary asset for XBOX. Nonetheless, it is still an innovation for the company, and it does not require any complementary assets. Microsoft replaced its XBOX’s controller and created Kinnect so that users can easily play games. Microsoft has used cent percent integrating strategy as Kinnect is a complementary device for XBOX and has to be provided with the whole offer.
Discuss MOOCs (e.g. EdX) as a disruptive innovation. How could educational institutions respond to this?
Massive Open Online Courses were developed in enhancing distant education. It provides an online platform, which helps various players in the educational field to interact among themselves, with an aim to learn and enhance their knowledge base. There are two types of disruptive ideas, which lead to disruptive innovations. The first one is the new-market idea, which helps the innovators in creating their own market. On the other hand, there are low-end disruptive ideas, this lead to innovations that provide a similar product at a low price and performance. Clearly, MOOCs are low-end disruptions as they provide education at a lower price. Some experts argue that it does not provide the same quality of education, which is provided via traditional system. Nonetheless, it is a clear threat to the traditional brick-and-mortar educational system.
Educational institutes need to revise their strategies while keeping in mind the new threat posed by MOOCs. They can focus on fields which require actual physical environment, like chemistry and biology. Secondly, each course should be revised in such a way that MOOC providers cannot copy it; they should add features which emphasize physical presence and action. Lastly, this institute can start their own virtual outlet for online provision of education. In this way, their virtual platform might cannibalize the physical platform, but at the end revenues will go to one single entity.
Discuss dilution or enhancement by embodiment using the example of solar power cells for laptops.
Embodiment is one of the criterions that are used for measuring the effectiveness of a new technology. Innovators can enhance of dilute the effectiveness of their innovation by adding new technological feature. In some cases, effectiveness of the innovation can be diluted due to embodiment. Nonetheless, it is an effective way of measuring an innovation’s nature. In case of solar power cells, innovators have enhanced laptops by providing users another source through which they can charge their laptops. Clearly, it means that innovators have enhanced the effectiveness of the technology as users of laptops are spread around the globe, even in regions with severe electricity crisis. For users residing in developed regions, it is an initiative taken in pursuit of protecting the environment as traditional power sources deteriorate natural resources and increase global warming.
Some innovators have provided two sources for charging, whereas some have removed the feature for the traditional way of charging. For innovators, who have removed the traditional source, it is a case of dilution as well as enhancement because they have removed (diluted) traditional charging option and added (enhanced) a new feature for charging. For innovators, who have simply added solar power charging feature, they have enhanced the technology by embodiment. However, this new technology has pointed a new direction for innovation. As absurd that it may sound, but there is a possibility than wind-charging might be possible. Innovators are working in a technology that will charge mobile phones via users’ heartbeat. So, this clearly indicates that there is a potential for further innovations.
What is the minimum winning game? How could you define (have defined) that for the case of “YemekSepeti”?
Every business or venture aims at reaping huge profits, but it is not an easy task. In order to tackle this problem, innovators and venture capitalist aim at minimum winning game. In a minimum winning game, the targeted market should be narrow enough for defining clear technological targets and it should be broad enough to provide long term sustainability. Minimum winning game can be easily achieved in one to one-and-half year. The time duration of achieving minimum winning game depends on the macro and micro environment, in which the company operates. During this period, executives can prepare for the next minimum game; in this way, a cycle of minimum winning game starts that helps the venture in achieving maximum winning game. In case, the management does not define a way to achieve minimum winning game, they might wander astray from the desired path of achieving maximum winning game.
YemekSepeti provides its customer with an online delivery system for edible products (mostly fast food). In case of YemekSepeti, maximum winning game might be to reap profits from around the globe, where fast food chains exists (be it branded or local fast food store). Keeping in mind its long term goals, the company has initiated its operation in Turkey. It is customized specifically for the Turkish as it primarily displayed in Turkish language. Even within Turkish region, the company is currently focusing on 48 cities, in which it can deliver fast food at reasonable prices. Since penetration of global fast food chains, the Turkish market has become limited enough that it indicated a clear sign of technological need, and the geographical region (Turkish people/population) is wide enough to sustain the business model. So, YemekSepeti is following minimum winning game to achieve maximum winning game in the long run.
What is an independent industry change? Which process (indeed or autonomous) is important in such a situation and why? Discuss using the example of banking when Internet banking was introduced?
Independent industry change occurs when one firm starts changing the rules, instead of following the rules. Once that firm starts changing the rule, it creates a ripple in the industry, which creates disturbance and ends up changing the shape of the industry. Change does not necessarily occur via shape; it can occur via industry dynamics, as well. When a firm starts going out of the way and starts devising its own ways, it is usually doing in the pursuit of developing a new product or setting a new trend.
Indeed process occurs when the firm has to change the rules in pursuit of exploiting a new opportunity. On the other hand, autonomous process initiates when a firm voluntarily initiates the industry change process by changing the rules to gain competitive advantage. For instance, Intel was milking DRAM conveniently, but it was still working on Centrino processors in order to gain competitive advantage; this is a classic example of autonomous process. In case the industry is stabilized, it is in the best interest of the key players to follow indeed process, whereas in case the industry is unstable and keeps on producing new products, every firm needs to adopt autonomous process.
In the previous century, banking industry was relatively stable than it is in the current era. The main change that occurred was induced by financial or economic crisis. The industry adopted as per their requirements. Even in the current era, financial rules and regulations are upgraded after each crisis. For instance, mortgage crisis of 2008 has led to the creation of Dodd-Frank acts (financial regulations). On the other hand, banks, like any other industry, are working to provide ease of accessibility to their consumers. Internet banking was not initiated on need basis; rather it was initiated on exploiting opportunities provided by IT.
A member of the Department of Management at Bogazici University has come up with the idea of establishing a law program. How could you set this up (we discussed two dimensions for the design, how does the initiative evaluate according to those)? What project organization would you choose for this product development process?
The first dimension is to assess strategic importance. This dimension checks how the innovation benefits the organization and what are the risks associated to it, and in case of failure, assess the exit routes. In case Bogazici University, the member needs to check whether it fits in the “bigger picture” of the university. Obviously, financial evaluation is also mandatory, which is mostly the first step of evaluating any alternative. The second dimension is operational relatedness. This aspect checks the basic material and services require for initiation of the product. Secondly, this also assesses the magnitude with which the innovation will increase organizational performance and capabilities. Lastly, it checks in case there is room in other areas where innovation has become a need. In case of Bogazici University, the member needs to check whether good instructors for law are available or not. Secondly, he/she needs to check whether it will financially add value to the organization and whether it will have a positive impact on university image or not. Lastly, it needs to be assessed whether management department needs another innovation or not. In case, it does require an innovation resources should be redirected towards it.
An autonomous team, structure should be assigned the task for assessing and pursuing the law program initiative. The team should consist of a law professor, middle level manager, and a marketing manager. The teams should be given full authority and autonomy over the project. In this way, it can devise a unique way to assess and pursue the initiative as they will be free from outside pressure. Bogazici University is a mature university and is operating in an industry which has a moderate pace with technology adoption and innovation. This type of project can be conveniently pursued as this initiative is in the paradigmatic phase, and ample information is available. However, autonomous teams will not only devise a unique was that keeps the university competitive advantage intact, but it will also come up with a way to add value to that competitive advantage.
Discuss possibilities for finding lead users. Design a lead user study or an idea competition for your company, going into as much detail as possible (e.g. regarding possible questions etc).
Lead users are those users who identify their needs, which are not yet open/ faced by general public/industry, and find a solution for them. They can gain first-mover advantage in the industry by becoming lead users. PC-CAD study revealed that 38 out of 136 users were lead users; approximately 28%. The study employed the screening technique for identifying lead users. Hilti case study reported that out of 74 users, 28 were lead users; approximately 37%. These two studies reveal that there is a good probability of finding 30% to 40% lead users from a given set of samples.
As a recruiter in HP, a strategy game will be used as a toolkit to separate lead users from the sample population. Applicants shall be recruited via traditional medium and a strategy game (which is not readily available in the market) will be selected. Candidates will be given a time period of six to seven hours to play the game in their own way. No specific instruction will be given to them except introduction and general guidelines about the game. After the deadline, candidates will be asked to leave the room, and a form will be filled by checking the score (along with other aspects). For instance, the form will have check-boxes like “masses morale”, “coins”, and “weapons”. Each check box will be assigned a specific weight the score will be multiplied with respective weights, and a total sum will be attained. Candidates will highest score will be tagged as lead users.
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