Innovation it's breaking of existing value chains in order to create new value that is aligned to a

clearly defined objective

• Disruptive innovation when a company enter the market with relatively low prices targeting
non consuming customers with relatively inferior product
• 2 big companies competing with each other they create disruption to smaller ones to enter
the market
• one big company

technologies: hard soft knowledge

Disruptive innovation refers to the innovation that transforms expensive or highly

sophisticated products or services—previously accessible to a high-end or more-skilled
segment of consumers—to those that are more affordable and accessible to a broader
population.

Philips is selling light as a service

Customer loyalty / value / consumer purchasing power: competitors

pressure on purchasing power

• Traditional competitor : (Pepsi/Coca Cola)

• Non traditional competitor : milkshake and banana

net expenditure of customers : book “job to be done”

1- Identify product value proposition

2- identify the customer segment
3- identify specific area of creative improvement (Brand equity – durability – immotile
attachment)

Business model canvas

Business ladder

low end / high end

predictive rationality and irrationality : (dan Ariely)

How firms can exploit/design Ambidextrous business models- That is antifragile and
resilient

Systemization of innovation : difference between the companies that say they do and what they
really do ( this difference is covered by culture engineering)
OKR : objectives and key results (continuous and future evaluation)

KPI : key Performance index (last Period) : it's a negotiated performance indicators that manager
team and I employees doesn't believe in

Ambidextrous business model: Future innovation / operation efficiency

Antifragility: resilience while taking advantages from negative situation ( When you build processes
on systems that are resilient to crisis and that are able to exploit opportunities)

Resilience : when negative situation occur and you can withstand it

Stress test : how can your business withstand with stress (shifting your business to online)

Zero-hour contracts :

Back casting : look and anticipate the future and then visit on that objective we come up with a
strategy to achieve it.

contingencies planning:

Recap:

systemization of innovation  OKR / kPi  Ambidextrous business model  antifragility 

contingency/scenario planning

Innovators dilemma : tries to answer why successful companies often falter when confronted with
disruptive changes in technology or market structure

Innovation cube: change impact / strategy impact / market impact

innovation cube : influence and impact of evaluation (we have incremental optional strategic and
design innovation)

Change need to be aligned with: the ability to design, implement and manage transitional strategies

Failed acquisition: EBay and Skype

Market that influence the dynamic of innovation:

1- credit to consumers
2- demographics and cyclographic
3- access to market

Ten types of innovation : Doblin

 • three areas : configuration / offering / experience

1- configuration : profit model/network/structure/process

2- offering: product performance/product system
3- experience: service/Brand/channel/customer engagement

seven characteristics of high growth company

1- hyper relevance : tradeable value

2- network powered : ecosystems / add value : activity systems
3- technology propelled (pushed for) : Gardner hype cycle
4- talent rich : capabilities
5- data driven
6- inclusive : hyper business models
7- asset smart : utilizing assets at minimum cost
Closing the Brand Gap through innovation and design
Summary: Existing brands already have certain products and services that generate a particular
experience in the mind of customer. However, distortions exist between what the brands what
to communicate and what the customer perceive referred to as the Brand Gap. This paper
presents a tool to identify innovation and design opportunities through the Brand Gap.The tool
aims to help companies narrowing the gap between brand values and customer experience
through innovation and design. The study explores different levels for opportunity identification
(short, medium, and long term) and it suggests that to take an experience perspective, brands
can start identifying opportunities based on the Brand Gap.

Conclusion: The Brand Gap visualization tool provides designers with guidelines to activate
brand´s innovation potential through the identification of the Brand Gap. The tool organizes the
information so as to compared at the same level, information related to what the brand wants to
communicate with to what the consumer perceives, and to identify gaps that give rise to
innovation opportunities. The tool explores in detail the touchpoints and the consumer feelings
and reactions, that is why the Brand Gap has more than one variant. Thereby, the innovation
opportunities identified have different natures and they can be classified in short, medium and
long term. In the short term, the different existing brand touchpoints themselves are a source of
innovation possibilities. Companies can consider if they facilitate the communication and
reinforcement of the brand values. Companies can also consider designing other brand
touchpoints or redesigning the existing ones for more consistency with brand values.

How useful is the Theory of Disruptive Innovation

Four Key Elements of the Theory of Disruptive Innovation :

1- Incumbents are improving along a trajectory of innovation : in every market there is a

distinctly different trajectory of improvement that innovating companies provide as they
introduce new and improved products
An incumbent business’s improvement trajectory results from what they call “sustaining
innovation”
2- The pace of sustaining innovation overshoots customer needs : the pace of sustaining
innovation along the trajectory of particular value propositions
3- Incumbents have the capability to respond but fail to exploit it
4- Incumbents flounder as a result of the disruption

(1) sustaining innovation, (2) overshoot of customer needs, (3) the emergence of a
disruptive innovation to which incumbents have the ability to respond, and (4)
incumbent firms floundering as they are disrupted
Managing innovation dilemmas: The cube solution
Identifying hidden needs for disruptive innovation
• Importance of identifying customer needs for developing disruptive innovation
 firms should not so be focused narrowly on serving current customers
 A customer-oriented firm “can serve current customers and remain vigilant for
unserving emerging markets
• Limitation of conventional market research
 problems with traditional market research such as the questionnaire, focus group
and visiting specific customers or users : generate good ideas but majority of
marketing managers say that too many of the new products that emerge from
them are purely incremental innovations (which can not be differentiated from
competitors).
 the behavior of only gathering information on mainstream customers’ needs and
responding to such needs was detrimental to disruptive innovation, whereas
orientation towards small but emerging customer segments might aid in the
development of disruptive innovations
• Hidden customer needs
 managers realize end users are often unable to articulate their needs and focus
group seldom lead to breakthrough product ideas
 users are unable to articulate them as these requirements rest on sub-conscious
level.
• Alternative market research to uncover hidden customer needs
1- Hidden needs analysis are set of techniques that suggest that direct questions are
ineffective and different approaches are needed. These new approaches are drawn from
anthropology and psychology.
First approach is repertory grid analysis : creative interviewing technique from
psychology that is able to identify hidden needs of customers by focusing on experiences
of different products and services

2- Jobs-to-be-done approach : most companies support the theory that customers buy
products and services for a specific purpose: to get jobs done. Job is fundamental goals
customers are trying to accomplish or problems they are trying to resolve in a given
situation
companies must shift their attention from the product and instead focus their
requirement-gathering efforts on the execution of the job that the product or service is
intended to perform
How is the Experience Economy/Theory driving innovation across different sectors and
firms

• businesses must orchestrate memorable events for their customers, and that memory
itself becomes the product: the "experience".
• Brand Gap encompasses all the inconsistencies occurring between the brand and consumer
perception

• Antifragility- Business Model

• RESILENCE AND FUTURE PROOFING : Build the core of your business and establish new
opportunities to deliver value
• 3 Step Value Model for Future-Proofing : .
1. OPTIMIZE CORE VALUE “Building efficiencies and optimizing the core portfolios“
2. CREATE INCREMENTAL VALUE “Designing resilient and transitional strategies”
3. CAPITALIZE ON RADICAL VALUE “Establishing antifragility into future value
opportunities”

The Progression of Economic Value

An experience is not an amorphous construct; it is as real an offering as any service, good,

or commodity. In today’s service economy, many companies simply wrap experiences
around their traditional offerings to sell them better.

Staging Experiences that Sell

• By engaging passengers in a way that turned an ordinary cab ride into a memorable event,
Iggy created something else entirely—a distinct economic offering. The experience of riding
in his cab was more valuable to his customers than the service of being transported by the
cab—and in the TV show, at least, Iggy’s customers happily responded by giving bigger tips.
• Experiences have always been at the heart of the entertainment business—a fact that Walt
Disney and the company he founded have creatively exploited. But today the concept of
selling an entertainment experience is taking root in businesses far removed from theaters
and amusement parks. New technologies, in particular, encourage whole new genres of
 experience, such as interactive games, Internet chat rooms and multi-player games,
motion-based simulators, and virtual reality.

Value creation is critical for firms- How do they preserve value in order to maximize yield,
returns, and a competitive edge/advantage.

Difference between value creation and value capture which is better

Identify the values that can fluctuate, like retained earnings, make sure to minimize outflow

Innovation means breaking existing value chains in order to create something new to achieve an
objective [ predetermined or emergent]

How to unlock the value of your innovation invesment ? Ontological perspective observation