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Technology, Innovation, Timing

Technology, Innovation, Timing. Perform Potential. time. First Mover / Follower. emergent growth mature decline. Technology Life Cycle. Characteristics in Life Cycle. Advantages. Disadvantages. First-Mover. Advantages Create the standard Low-cost position

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Technology, Innovation, Timing

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  1. Technology, Innovation, Timing

  2. Perform Potential time First Mover / Follower emergent growth mature decline Technology Life Cycle

  3. Characteristics in Life Cycle

  4. Advantages Disadvantages First-Mover

  5. Advantages Create the standard Low-cost position Intellectual property Tie up resources Increase switching costs for producer Increase switching costs for customer Disadvantages Advantages can be short-lived Higher development costs Competitors violate intellectual property Greater uncertainty Consumer reluctance First-Mover

  6. First Mover vs Follower • Pioneers gain significant sales advantages but incur larger cost disadvantages relative to a fast follower entrant • ROI pioneers < ROI fast followers • First mover more likely to attain strategic resource (Starbucks busy corner strategy)

  7. First-Mover vs Follower • With insufficient information early entrance can lead to large costs • Too long, firm may lose the first-mover advantage

  8. Window of Opportunity First Mover Follower Cash Flow Innovation No Competition Low Competition Strong Competition First-Mover vs Follower

  9. First Mover vs Follower • Beta vs VHS • Prodigy, CompuServe, AOL • When is a first mover strategy called for ?

  10. Value Net and Alliances • Complements to a product • Hot dogs & mustard • Starbucks and Barnes & Noble • Partnerships • Calyx & Corolla partners FedEx (floral delivery) • MicroSoft & Mac – spreadsheet & graphical apps (allowed MicroSoft to exploit Apple’s graphical interface & create windows)

  11. Technology & Innovation Strategy • Innovation is commercialized invention • 6% of independent inventions make it to market • Success rate for inventions in established firms 4 times as high • Invention to Venture can be a long road (Chester Carlson invented photocopier in 1942. Xerox introduced first copier in 1960).

  12. Dimensions of Tech. Innovations • Importance • Radicalness • Patent Scope

  13. Dimensions of Tech. Innovations • Importance • Magnitude of economic value of invention • Radicalness • Market effect of the commercialized invention (disruptive innovation) • Patent Scope • Breadth of intellectual property protection

  14. Capabilities / Knowledge of Entrepreneurial Team New Technology New Invention Characteristics Of Industry Characteristics Importance Radicalness Patent Scope Avail Resources Commercialize No Yes New Firm

  15. Tech Innovation Strategy • Innovation based on invention & creativity and is defined as invention that has produced economic value in the marketplace. • Innovation based on commercialization of new technology • Skis – Snowboards • Schwinn bicycles to mountain bikes

  16. Sources of Innovation • Lead users • Product ideas but not average users • Sliced peanut butter • Build it & they will come (often fails) • Assumes customer will do what they say (fertilizer vs organic fertilizer) • Market analysis

  17. Start Describe The Problem Build / Test Prototype Incubate observe problem Evaluate / Test Ideas Brainstorm Insights Inventive think Creativity & Invention

  18. New Technology Ventures • Neither the first companies to use technology nor the companies with the best technology win • Companies with right application for the technology win Apple invented Newton PDA, Palm application graffiti interface

  19. Technology Factors • Feasibility • Performance • Manufacturability • Business Factors • Vision • Target Market • Value Proposition • Strategy • Industry/Competitor Analysis • Expected Competitive Adv. • Expected Economic Results • Revenue / Profitability • Return on Capital • Time to profitability

  20. Question: www.gentex.com • Gentex Corp. designs and manufactures automatic-dimming review mirrors. Its safety mirrors use sensors and electronics to detect glare from trailing approaching vehicles at night and darken accordingly. Describe the technology that Gentex uses. Describe a value-net base for Gentex and who its partners might be.

  21. Question: www.gemcar.com • Daimler Chrysler is offering a car called GEM that runs on a battery and will travel up to 30 miles with a top speed of 25 mph before needing recharging. It sells for $6,000-$8,000. What innovation is necessary to make this car a winner?

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