Robert Monroe Innovative Product Development January 18, 2011

1. The Cagan / Vogel Innovation Process,Social, Economic, and Technology (SET) Factorsand Product Opportunity Gaps Robert Monroe Innovative Product Development January 18, 2011

2. By The End Of Class Today, You Should: • Understand the five basic steps in the Cagan/Vogel process for bringing an innovative new product to market • Be able to use the SET factor model to identify, evaluate, and understand how broad Social, Economic, and Technology changes can create Product Opportunity Gaps (POGs)

3. The Cagan and Vogel Innovation Process Identify Understand Conceptualize Realize Launch* * The launch stage is not part of theCagan / Vogel process but it issomething we willlearn about

4. Phase 1: Identify The Opportunity Identify Understand Conceptualize Realize Launch* • Goals: • Identify and evaluate a set of promising Product Opportunity Gap (POG’s) • Choose the most appropriate POG to move forward with • Primary results: • Product opportunity statement (hypothesis) • Initial scenario that illustrates the opportunity • Methods • Brainstorming, observing, researching Social, Economic, and Technology (SET) factors • Generating POGs based on SET factors • Evaluating and filtering POG ideas generated • Scenario generation, feedback, and refinement Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.

5. Phase 2: Understand The Opportunity Identify Understand Conceptualize Realize Launch* • Goals: • Much deeper understanding of customer and customer’s Value Opportunities (VO’s), translated into product criteria • Results: • In-depth understanding of the customer/user, captured through refined customer scenarios and VOA’s • List of product characteristics and constraints • Methods • Primary research: observe, interview, listen, task analysis, stakeholder analysis • Secondary research: human factors, lifestyle reference, dive deeper on SET factor changes Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.

6. Phase 3: Conceptualize The Opportunity Identify Understand Conceptualize Realize Launch* • Goals: • Turn Value Opportunities into product concepts that are perceived as useful, usable, and desirable • Generate many concepts, evaluate, refine, iterate, reduce to a single concept to move to stage 4 • Results: • Clearly articulated product concept • Clear market definition • Visual, and/or physical prototypes that can be shown to and evaluated by potential customers • Demonstration or belief that product is technically feasible Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.

7. Phase 4: Realize The Opportunity Identify Understand Conceptualize Realize Launch* • Goals: • Develop product or service – move from prototype to product • Complete marketing plan, financing, initial production, etc. • Product or service is ready to be sold to customers • Results: • Production processes defined • Go to market plan completed (marketing, positioning, etc.) • Sales channels lined up • Placement and contracts with distributors, retailers, etc. negotiated Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.

8. Phase 5: Launch the Product Identify Understand Conceptualize Realize Launch* • Goals: • Deliver the product or service to customers • Start generating revenue • Ramp up production • Support organization is up and running • Results: • Product or service offering is available to customers • Distribution channels functioning • Sales lead to inbound cash flow Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5.

9. SET Factors and Product Opportunity Gaps

10. Social, Economic, and Technology (SET) Factors • Identifying and observing broad Social and Economic changes in a society can help you discover gaps that current products and services are not meeting. • Likewise, Technological advances can create opportunities to create products and services that would have been previously technically impossible • Technological advances often also create new (and different) problems for people or societies, which can also be fertile ground for product opportunities • In general, you are looking for broad, enduring changes to use as a basis for new product opportunities

11. SET Factors Product Opportunity Gap Source: [CV02] page 9

12. SET Factor Exercise • Divide into three groups (one S, one E, one T) • Work as a group to come up with a list of at least 20 broad forces / changes / trends in the GCC and/or the full Arab League nations for your assigned topic (S, E, or T) • Write them down and be prepared to present them for discussion using the whiteboards around the room.

13. SET Factor Discussion • Do you see some common themes emerging? • Which of these SET factors are mostly the same throughout the GCC nations? Throughout the Arab League nations? • Which of these SET factors vary considerably throughout the GCC nations? Throughout the Arab League nations?

14. Product Opportunity Gaps (POG’s) • The next step is to identify Product Opportunity Gaps, or POGs based on your SET factor analysis. • A Product Opportunity Gap is the gap between what is currently on the market and the possibility for new, or significantly improved, products that result from emerging trends. • Source: [CV02] page xxxi (glossary)

15. POG Exercise • Let’s pick a specific industry – _____________ • Based on the SET factors identified, where should the leading companies in that industry be looking for gaps to fill with innovative new products or services? • Are they doing so currently? • If not, why not? • Meet again as S, E, and T groups. Come up with a list of at least 10 POGs for this industry that your group thinks that companies in this industry should be exploring

16. Wrap Up

17. By The End Of Class Today, You Should: • Understand the five basic steps in the Cagan/Vogel process for bringing an innovative new product to market • Be able to use the SET factor model to identify, evaluate, and understand how broad Social, Economic, and Technology changes can create Product Opportunity Gaps (POGs)

18. References [CV02] Jonathan Cagan and Craig M. Vogel, Creating Breakthrough Products, Prentice Hall, 2002, ISBN: 0-13-969694-6.