NAME : UMAIR LAIQUE

STUDENT I.D: 60606

SUMMARY
This chapter began with a working definition of innovation as the embodiment,
combination, or synthesis of knowledge in original, relevant valued new products,
processes, or services. Innovations have two categories
INCREMENTAL INNOVATIONS:
Incremental innovation exploits existing forms or
technologies. It either improves something that already exists, making it. The
GPS position locators found in many luxury automobiles are examples of an
existing technology adapted to a different purpose.
RADICAL INNOVATIONS:
A radical innovation is something new to the world. Many
radical innovations have the potential to displace established technologies as
the transistor did when first introduced into the world of vacuum tubes or to
create entirely new markets or both.
INNOVATIONS IN PROCESS:
People are used to thinking of innovation in terms physical
manufactured goods such as computer chips, flat screen display , night vision
equipment and so forth. In reality, process and service innovations are just as
important in the competitive life of companies and industries. Consider the
example of the mini-mill first developed by Nucor Corporation under the
leadership of ken lverson. At the time, steelmaking was a mature business
involving huge capital assets and supply chains that stretched back to distant
ore mining and coal producing operations .Sheet steel was produced by a
process that pored mattress-sized slabs of white-hot metal then gradually
reduced slab thickness through a long and expensive series of rolling mills
and reheating operations
This chapter explained the concept of the S-curve and its implications for managers
and innovators.
An S-curve describes how the performance or cost characteristics of a technology
change with time and continued investments. In the generalized model a newly
introduced technology is crude and not particularly competitive with established
rivals except in specialized niche markets
Performance or cost characteristics or both enjoy a period of rapid and steady
improvement as techinal issues are solved. Eventually the innovations performance
or cost may equal and perhaps exceed those

Eventually the new technology enters a periods of maturity in which improvements

are small infrequent and increasingly costly. At this point it become vulnerable to
attack by still never technologies
The S-curve concept was shown to have a number of lessons:
1 Defenders face difficult choices with respect to how they should react to the
appearance of a new technology
2 Leaders in one generation of technology are seldom leaders in the next.
3 Attackers enjoy important advantages over established rivals; an undivided focus.
An ability to attract talent, freedom from the tyranny of service markets little
bureaucracy and no need to protect investments in unrelated skills or assets
This chapter has examined key sources of innovative ideas
NEW KNOWLEDGE:
Through the trail from new knowledge to marketable products is
often long , this is the source of many, if not most radical innovations.
CUSTOMERS IDEAS:
Customers can tell you where current products fall short and can
point to unmet needs
LEAD USERS
People or companies whose needs are far ahead of market
trends .Looks at what they are doing today to meet needs that others will confront
tomorrow
EMPATHETIC DESIGN:
An idea generating technique whereby innovators observe how
people use existing products and services in their environments.
OPEN MARKET INNOVATION:
Free trade of ideas between entities through licensing joint ventures
and strategic alliances.
BRAIN STORMING:
Most readers have had some experience with brainstorming
Effective brainstorming is guided by five key principles
1 FOCUS:

Brainstorming should concentrate on a particular problem and be bounded

by real world constraints

2 SUSPENDED JUDEMENT;
All judging should be suspended while ideas are being generated. Even the
wildest ideas should be encouraged.
3 PERSONAL SAFETY:
Participants should be assred that unpopular ideas or ideas that threaters
the status quo will not provoke recriminations
4 SERAIL DISCUSSION:
Limit the discussion to one conversation at a time and keep it focused on the
topic
5 BUILD ON IDEAS :
Try to build on the ideas of others wherever possible
METHOD FOR OPPURTUNITY RECOGNITION
Recognizing the opportunity associated with an innovation is usually chancy. Data
about the innovations performance in use are either limited or speculative. A
method for recognizing value was provided , based on kim and Maborgnes buyer
utility map which help innovators to think about two things
1 The levers they can pull in delivering utility to customers
2 The various stages in the buyer experience cycle which runs from purchase to
disposal
TECHNICAL COMPETENCIES:
Every company has one or more technical competencies . A securities broker dealer
has competencies in trading , market making and information systems. A mini-mill
steel company has technical competencies in manufacturing and logistics among
others.
BUSINES COMPETANCIES:
Business competencies include marketing , new product development the ability to
serve a particular customer base the ability to manage widely scattered employees
and facilities.

This chapter examined the final phase of the innovation process moving ideas to
market. In this phase companies must develop a rational approach for rejecting
some of the ideas developed earlier and moving others forward towards eventual
commercialization the idea funnel and stage gate system were described. The
funnel is not a method but a conceptual framework for understanding what must go
on as innovative ideas are moved toward commercialization. By degrees and
through rational processes, many ideas are reduced to the most commercially
promising few. This chapter also discussed the financial tools that become
important as an innovative idea moves closer to commercialization . Two
assessment methods were described

BREAKEVEN ANALYSIS:
A quantitative measure of how many units will have to be sold ata
given net price assuming fixed variable cost for the organization to break even.
DISCOUNTED CASH FLOW (DCF) ANALYSIS:
A method for determining the monetary value of a commercialized
idea over a particular span of time based on time value of money concepts