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Redifferentiating Products: New Technology or New Uses Week

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Title: Redifferentiating Products: New Technology or New Uses Week


1
Redifferentiating Products New Technology or New
Uses Week 4
  • Recognizing the Potential of an Innovation
  • Think Bubbles (Quizzing to understand the
    customers experiential context pp. 50-56)
  • Instructor J. Christopher Westland, Professor,
    ISMT
  • Time
  • Tue Thu 130pm-250pmVenue Rm. 4333Duration 5
    Sep 7 Dec
  • Text.
  • McGrath MacMillan, The Entrepreneurial Mindset,
    HBS Press 2000
  • Contact
  • Office 852 2358 7643 Fax 852 2358 2421
  • Email westland_at_ust.hk URL
    http//teaching.ust.hk/ismt302/

2
Innovation Invention Commercialization
3
Redifferentiating Products New Technology or New
Uses
  • Redifferentiating
  • Quizzing
  • Consumption Chain Analysis
  • Practicum Think Bubbles

4
The Dialectic
  • Innovation involves a dialectic
  • On the one-side are arguments about what the
    customer wants (demand-side)
  • Remember that the customer doesnt care about us
    or our products
  • We have to make them care
  • On the other-side are arguments about what we can
    do (supply-side)
  • These are determined by our core competences
  • Which are to some extent determined by Mission
    and Vision statements, and our Business Models
  • We are on the 2nd chapter on the demand side

5
Redifferentiating
  • Lay your biases on the table
  • There is no market that is so mature that you
    cannot further differentiate your offerings
  • Show me a manger who claims hes in a mature
    business..
  • … and Ill show you a manger whos asleep at the
    wheel
  • --Shelly Weinig
  • Redifferentiating is a skill that can be learned
  • Quizzing
  • Consumption Chain Analysis

6
Function of Quizzing
  • Detailed look at customer usage and decision
    making regarding your product
  • Looks at the customers stream of consciousness
  • Through a series of questions
  • Looks for ideas to Change the Customers
    Experience (i.e., redifferentiate your product)
  • Remember Experience is dynamic
  • So are the questions in quizzing
  • Over a time period prior to the first time
    customer is exposed to the product
  • To a time well after the customer has stopped
    using it

7
Preliminaries The Basis for Quizzing
  • Rudyard Kiplings six honest serving men
  • What, who, when, where, how why?
  • What is the problem?
  • Who (which individual in the case) is responsible
    for solving the problem and making a decision?
  • Where is the money? (The value generated by the
    solution)
  • When does the problem need to be solved?
  • How will you measure success?
  • Why did you have this problem, and what will you
    do to prevent it in the future?
  • This establishes the context for the customers
    problem
  • And where you might find new business
  • by Redifferentiating your products

8
Quizzing
  • Who?
  • … is with customers while hey use the product
  • How much influence do they have
  • If we could arrange it, who would we want the
    customer to be with …
  • What?
  • … Do our customers experience when the use the
    product
  • … needs provoked our offering
  • What else? … might customers have on their minds
  • When? … do our customers use this ..
  • Where? … are our customers when they use this
  • How? … do customers learn to use the product ..

9
Stream of Consciousness
  • Quizzing should be a Stream of Consciousness
  • Psychology and philosophy
  • the set of constantly changing inner thoughts and
    sensations which an individual has while
    conscious
  • Literary criticism
  • technique which seeks to describe an individual's
    point of view by giving the written equivalent of
    the character's thought processes.
  • Stream-of-consciousness writing is strongly
    associated with the modernist movement.
  • May Sinclair transferred it from psychology to
    the literary context.

10
Mistakes to Avoid
11
Think Bubbles (Part 1)
  • Quizzing
  • Mind Maps to Recognize the Potential of an
    Innovation

12
Function of Consumption Chain Analysis
  • A complement to quizzing …
  • And (perhaps) quizzing done from a different
    (more graphical) perspective
  • Consumption Chain Analysis
  • Works from the premise that
  • opportunities for redifferentiation
  • lurk at every step and decision that your
    customers take
  • From the time they first become aware of their
    need for your product or service
  • To the time thy finally dispose of the remnants
    of the used up product
  • Rather than stream of consciousness
  • It is time-sequential

13
Consumption Chain Analysis
  • A complement to quizzing …
  • And (perhaps) quizzing done from a different
    (more graphical) perspective
  • Consumption Chain Analysis
  • Works from the premise that
  • opportunities for redifferentiation
  • lurk at every step and decision that your
    customers take
  • From the time they first become aware of their
    need for your product or service
  • To the time thy finally dispose of the remnants
    of the used up product
  • Rather than stream of consciousness
  • It is time-sequential

14
Consumption Chain Analysis
15
Think Bubbles (Part 2)
  • Consumption Chain Analysis
  • How can you improve on the existing steps in the
    Customers Consumption Chain?

16
Every Link in the Consumption Chain has its Own
Attribute Map
  • The Attribute Map compares your product to those
    of others

17
At each step, remember to KISS (Keep It Simple,
S)
  • The simplest way to change a business model
  • Is to redesign your offerings … i.e., products
    and services
  • Aim for blockbuster design
  • One that so appeals to your target customers
  • That they feel almost compelled to buy from you

18
The Purpose of a Business is to Create a
Customer -- Peter Drucker
  • Even if you create marvelous inventions
  • Your customers wont care
  • Unless that is exactly what they need
  • Business customers are especially impatient
  • With any product that doesnt help them gain
    competitive advantage
  • Yet your firm wants to build products that take
    advantage
  • Of their Core Competences

19
Creative Tension
  • Core Competences are the things that the firm
    does
  • That they do better than other firms
  • That are the source of their competitive
    advantage
  • They are not necessarily what the customer wants
    (!!)
  • Firms establish their core competences by
  • Investing in people
  • Investing in assets, plant and land
  • Identifying and focusing their mission
  • The Firms core competences are often those of
    its CEO and management

20
Core Competences Consume your Resources Keep a
Resource View of Firm Strategy
21
Recap Steps for Redifferentiating
  • For each customer segment sketch the consumption
    chain
  • Identify the trigger events that precipitate
    customer movement from link to link
  • Put in place procedures to alert you when the
    trigger is pulled (and plan your response)
  • Quiz to assess needs that may not be met
    currently
  • Create an attribute map for each significant link
    in the Consumption Chain
  • Use your knowledge of Customer Experience to
    create Blockbuster Products
  • Put the ideas you generate into your opportunity
    register
  • Repeat this process for each class of stakeholders

22
Redifferentiating in Industry
  • Who does it well?
  • Who Doesnt?
  • A look at some recent industrial success stories

23
Jeffrey Immelt General Electric
  • Repositioned GE's portfolio with major
    acquisitions in health care, entertainment, and
    commercial finance.
  • Created a more diverse, global, and
    customer-driven culture

24
Steven Reinemund PepsiCo
  • Developed a strong and diverse leadership bench
    that has helped PepsiCo tap new markets.
  • Attained consistent double-digit earnings growth
    through product innovation and smart marketing.

25
Hector Ruiz Advanced Micro Devices
  • Demonstrated the first mainstream dual-core chip,
    offering superefficient processing with low power
    consumption and heat dissipation.
  • Launched an initiative to sell low-cost PCs in
    developing countries in a bid to bridge the
    widening digital divide.

26
Steven Spielberg, Jeffrey Katzenberg, and David
Geffen DreamWorks SKG
  • In the spring, the computer-animated Shrek 2 set
    a record with a gross of 436.7 million.
  • Had one of the year's hottest IPO's, pulling in
    812 million. Stock zoomed by 45 the following
    month.

27
Robert Nardelli Home Depot
  • Turned a 46 billion business dominated by
    big-box stores into a 70 billion chain with
    urban, suburban, and international outlets.
  • A ruthless drive for efficiency, such as
    centralizing purchasing and investing in
    technology, pushed margins above 30.

28
Joseph Tucci EMC
  • Revived growth by pushing sales of new,
    easier-to-use, less expensive storage gear.
  • Made 3.6 billion worth of software deals,
    boosting margins and broadening EMC's appeal to
    customers.

29
Linus Torvalds Open Source Development Labs
  • Created the core piece of the Linux operating
    system, which launched a software revolution.
  • Turned Linux into the No. 2 server operating
    system in the world, after Windows.

30
Edward Breen Tyco
  • Brought Tyco back after executive scandals and a
    liquidity crunch nearly killed it.
  • Tripled net earnings and regained an
    investment-grade rating on Tycos bonds.

31
Phil Knight Nike
  • Transformed a volatile, fad-driven marketing and
    design icon into a more shareholder-friendly
    company.
  • Hired outsider William Perez, ceo of household
    products company S.C. Johnson, to succeed him as
    ceo.

32
Chung Mong Koo Hyundai
  • Turned the company from the butt of talk-show
    jokes into a leader in customer-satisfaction
    surveys.
  • Boosted Hyundai's presence in the U.S., Europe,
    China, and India, resulting in record sales and
    profits.

33
Henning Kagermann SAP
  • Kept a tight lid on costs, which helped boost
    profits 20, to 1.7 billion.
  • Tied SAP'S software to other companies' products,
    helping to win over a slew of new customers.
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