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Metro AG’s ‘Future Store’

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Chapter 1 Figure 1.1: Drivers of the Need for Innovation Figure 1.2: Dimensions of Innovation (Manufacturing Sector) Figure 1.3: Dimensions of Innovation (Financial ... – PowerPoint PPT presentation

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Title: Metro AG’s ‘Future Store’


1
Chapter 1
2
Figure 1.1 Drivers of the Need for Innovation
Source Seth and Ram 1987
3
Figure 1.2 Dimensions of Innovation
(Manufacturing Sector)
Commercial Innovation
OUTPUTS
Manufacturing Processes
Business Processes
New Services
New Products
DIMENSIONS
NPD Process
UNDERLYING PROCESSES
Process of Innovation Management
4
Figure 1.3 Dimensions of Innovation (Financial
Services)
Innovation
OUTPUTS
New Insurance Policies
New Services
Customer Profiling
Channels
DIMENSIONS
Use of 3rd Parties
UNDERLYING PROCESSES
Process of Innovation Management
5
Table 1.1 Degrees of Product Innovation
   
 
i Booz-Allen and Hamilton, New Products
Management for the 1980s, (New York Booz-Allen
and Hamilton Inc., 1982).
6
Table 1.2 Example Dimensions Degrees Analysis
 
 
7
Figure 1.4 Continuous Improvement and Innovataion
Transformational
Revolution
Degree of innovation
Innovation (The business, but not as usual)
Radical
Quality(the businessas usual)
Quality(the business as usual)
Incremental
Processes
Business model
Deliverables (Products, services, Market
positioning)
Dimension of innovation
8
Figure 1.5 The Development Funnel
Ideas filtered out
Projects terminated (killed)
Rejected concepts
Ideas
Idea Generation Phase
Choice of Best Ideas
Market
Implementation
  • New Products
  • New Services
  • New Processes
  • New Business
  • Processes

Ideas Concepts
Projects
Recycled ideas
Ideas from open innovation
9
Figure 1.6 The Innovation Pentathlon
Innovation Strategy
Ideas
Implementation (NPD, etc)
Prioritization

People and Organization
10
Figure 1.7 The Pentathlon Framework in Context
Market Forces Competitive Forces New Technology
The Organizational Context
PartnershipsSuppliers
Sources of knowledge(universities,
technicalinstitutes)
Innovation Networks
File Pentathlon6.ppt
11
Figure 1.8 Innovation Management at an
International Bank
Innovation Strategy
Implementation (Weakness)
Market - Products - Processes - Services
Ideas (Weakness)
Prioritization
People and Organization
12
Figure 1.9 Innovation Management at an VehicleCo
Innovation Strategy
Implementation (Weakness)
Market - Products - Processes - Services
Ideas (Strength)
Prioritization
People and Organization (Strength)
13
Chapter 1 The Role of Innovation Chapter
2 Innovation and Economics Chapter 3
Contrasting Services with Manufacturing
Chapter 9 Boosting Innovation Performance
Chapter 10 The Future of Innovation Management

Chapter 4 Developing anInnovation Strategy
Chapter 6 Selecting andManaging an
InnovationPortfolio
Chapter 7 ImplementingInnovation
Chapter 5 Generating CreativeCustomer-focused
Ideas
Chapter 8 Creating anInnovative Culture
Ref Chapterdiagram1
14
Mini Case 1.1 Metro AGs Future Store, Germany
  • Worlds fifth largest retailer joined forces with
    Intel and SAP to build a fully working
    prototype supermarket
  • RFID smart-tag technology used on all products
  • Shopping trolleys have touch screen computers and
    scanners
  • Smart tags cost 0.5 Euros each and are currently
    too expensive for every item in very supermarket

15
Mini Case 1.2 No Slide for This
16
Mini Case 1.3 Gillette
  • Gillette Mach 3 razor is a first-to market
    product
  • Developed at a very high cost
  • A UK supermarket chain was quickly able to
    produce a good copy at a fraction of the original
    cost
  • Gillette have been more dependent therefore on
    expensive television advertising to protect sales
    of their product
  • When products are easy to copy, competitors can
    leapfrog original features and Wilkinson Sword
    Company have now introduced a 4 blade razor

17
Mini Case 1.4 Tetleys Teabags
  • Tetley is a market leader and the originator of
    the round teabag
  • Advertising was based around a better cup of tea
    that would result from bags where the tea could
    circulate better
  • Knew that competitors would try and copy
  • Hired consultants to develop a new manufacturing
    line for round teabags
  • When new product was introduced competitors were
    unable to obtain similar manufacturing equipment
    quickly and Tetley maintained its lead

18
Mini Case 1.5 Les Concierges, India
  • Targets cash rich, time poor segment starting
    in Bangalore
  • Idea is an in-company help desk offering
    executives 4 categories of support
  • shopping
  • everyday and special tasks
  • entertainment
  • travel
  • Company philosophy is High tech / High touch
  • 1m and over 350 staff

19
Mini Case 1.6 Singapore Airlines
  • Voted worlds best airline in surveys by travel
    magazines
  • First-to-market strategy for many years
  • More modern aircraft offering
  • larger than average seating
  • first in-flight phones and faxes
  • Led in the introduction of electronic tickets
  • Flexible for flight confirmations by phone, fax
    or email
  • Staff receive longer and more detailed training
  • Visit senior citizens homes

20
Case Study DoCoMo
  • How can partnerships and alliances help a company
    in the service sector achieve its innovation
    strategy?
  • How can service and product strategies of
    different companies be aligned to target specific
    customers segments?
  • How can a service provider make it harder for
    competitors to copy innovations?

21
Figure 1.11 DoCoMo i-Mode Collaboration
i-modeCollaborationConceptv2.ppt
22
Chapter 2
23
Table 2.1 Economic Measures of Innovation
Table 2.1 Typical Measures of Innovation  
24
Table 2.2 RD Investment in Different Industries
Source UK dept of Innovation, Universities and
Skills R and D Scoreboard 2007
25
Table 2.2 RD Investment in Different Industries
(cont)
26
Figure 2.1 National RD Investment
3
National RD Investment
2.5
2
1.5
1
0.5
0
US
Italy
Mean
Spain
Japan
Ireland
Greece
France
Austria
Sweden
Belgium
Finland
Portugal
Denmark
Germany
Luxemburg
Netherlands
United Kingdom
Source European Commission ESN 2007
27
Table 2.3 The Kondratieff Cycles
 
 
Based on material from Professor H. Hagemann 2001
28
Figure 2.2 Adopter Categories
100
Cumulative
84
50
Total percentage of Adopters
15
Early Majority
Late Majority
Laggards
2,5
Early Adopters
t-2sd
t-sd
t
tsd
Time of Adoption
Innovators
29
Mini Case 2.1 Australian Medical Care
  • Healthcare is a major part of the service sector
  • ARCHI supports implementation of effective and
    quality improvements through
  • seminars, publishing reports, producing case
    studies and communicating new ideas to healthcare
    professionals
  • Treatment being improved not only by drugs and
    medical technology but also through suitable use
    of quality management techniques
  • Culture of medical profession changing

30
Mini Case 2.2 Dutch Government Policy and RD
  • Many governments have used relaxation of taxation
    as a means to stimulate innovation
  • In Holland, where companies deduct income tax and
    social security payments directly, they have been
    allowed to pay lower tax amounts on behalf of
    their RD staff
  • Proved popular with SMEs, who receive 60 of the
    budget allocated to the scheme
  • Nearly 15,000 organizations benefited in 1999
  • Research has shown that both RD expenditures and
    the number of RD employees has increased

31
Mini Case 2.3 Extricom GmbH, Germany
  • Small company near Stuttgart
  • Competing in the twin-screw extruder market
  • Original twin-screw extruder developed in the
    1950s
  • Today, there are over 100 companies worldwide
    offering twin-screw technology
  • Technology has largely become a commodity
  • Margins are relatively narrow
  • Led to the market leaders to also produce
    replacement parts for their competitors machines
  • Extricom has developed the latest technology
    12-screw extruders which allow materials to be
    processed more efficiently through improved flow
    dynamics

32
Mini Case 2.4 Repsol YPF, Argentina
  • Distributes natural gas to over 9 million clients
    in Spain and Latin America
  • In partnership with VW, introduced the Polo CHG
    in 2002
  • Now nearly 1 million gas-powered cars on the
    roads
  • Over 1000 petrol stations offering gas supplied
    by Repsol YPF in 205 towns and cities in
    Argentina
  • Average annual saving per year one months
    average salary
  • Repsol YPF and VW offer a full service (inc.
    installation and registration)

33
Mini Case 2.5 Dvorak versus QWERTY
  • Are the best innovations always adopted?

34
Case Study Aravind Eye Hospitals
  • What kinds of innovation most require inspiring
    (rather than effective) leadership?
  • Why has an equivalent of Aravind not yet arisen
    in the west?
  • If one were to attempt to found an equivalent in
    your own country how would it be different?
  • What risks might lie ahead for Aravind as Indias
    economy develops?

35
Chapter 3
36
Table 3.1 Service Sector International
Comparisons (2007)
)
 
37
Table 3.1 Service Sector International
Comparisons (cont)
)
 
38
Table 3.2 Employment in the Service Sector 2005
 
 
Based on Alajääskö 2008
 
39
Table 3.3 Top Investors in RD in Service in 2007
 
 
Based on UK R and D scoreboard 2009
40
Table 3.3 Top Investors in RD in Service in
2007 (cont)
 
 
Based on UK R and D scoreboard 2008
41
Table 3.4 GATT Classification of Services
 

UN manual on statistics and trade 2002
42
Figure 3.1 Service Products
Service Augmentation
  • Production of the service
  • Delivery of the service customer contact
    (time intimacy information exchange)
  • - quality of contact
  • Servicescape ambient conditions spatial
    layouts signs, symbols and artifacts

Service Product
  • Core product received by the consumer
  • Product quality, adaptability, and
    distinctiveness
  • Physical evidence

43
Table 3.5 Terminology for Innovation in
Manufacturing Services
 
 
44
Figure 3.2 The Gap Model
Image of Product / Service Product
Word-of-Mouth Communications
Previous Experiences
Customers Expectations
Customers Perceptions
Gap 4
Gap 5
Customers Own Specification of Quality
The Customers Domain
The Actual Product / Service Product
Gap 1
Managements Concept of Product / Service Product
Organizations Specification of Quality
Gap 3
Gap 2
The Organizations Domain
Adapted from Slack et al 2003
File Gap1
45
Figure 3.3 Innovation in the German Service
Sector
Service Product Innovation
Non-Innovators 33.5 Service Innovators 39.5 Proc
ess Innovators 53 Organizational Innovators 16
Only Service 9
Service Org. 2
Service Process 21
All Types 7.5
Only Organizational 2
Process Organizational 5
Only Process 20
Process Innovation
Organizational Innovation
After Hipp, Tether and Miles
46
Table 3.6 Characteristics of Services and
Implications
 
Magnusson, Matthing and Kristensson 2003

 
i Magnusson, P.R., Matthing, J. and
Kristensson, P. Involvement in Service
Innovation Experiments with Innovating End
Users. Journal of Service Research, Vol. 6, No.
2, (November 2003), pp111-124.
i Magnusson, P.R., Matthing, J. and
Kristensson, P. Involvement in Service
Innovation Experiments with Innovating End
Users. Journal of Service Research, Vol. 6, No.
2, (November 2003), pp111-124.
47
Figure 3.4 Service Innovation and the Pentathlon
  • Chapter 4
  • Innovation strategy can be difficult to
    articulate because of the intangible nature of
    services. Management must address this.
  • Technology can enhance services and
    opportunities should be monitored.
  • Performance measures should cover both the
    service products
  • and service augmentation
  • Chapter 6
  • The intangible nature of services can make
    portfolio management more difficult in that
    cross-project comparisons are difficult.
  • In services, often the bottleneck resource is
    IT and so this must be considered.
  • Chapter 5
  • Discussing intangible service products can be
    hard.
  • Ideas for new service products can come from
    the customer, databases, the front- and back-
    offices.
  • There is too little customer involvement.
  • In creating concepts for new service offerings,
    customer contact and the tangibles offer
    opportunities for innovation.
  • Chapter 7
  • New service development needs a formal process
    to coordinate departments effectively.
  • NSD needs to account for the multifaceted
    nature of service quality.
  • Customer involvement is needed.
  • Chapter 8
  • Customer contact in services means that staff
    training is key and re-training is often
    required to support service innovations.
  • Innovations in services require that all staff
    understand the nature of service products and
    augmentations. The Gap Model is a useful tool
    for communicating the issues.
  • A culture of innovation in a service
    organization can be very difficult to achieve
    but even harder for competitors to copy.

Ref ServiceChaptersdiagram1v2
48
Mini Case 3.1 Jura
  • Premium coffee machines first single-button
    cappuccino machine
  • Easy operation and maintenance
  • Fully developed service package to match the
    product

49
Mini Case 3.2 Boeing and Airbus
  • Boeing and Airbus have been challenged to provide
    more innovative cabin designs
  • Within the limitations of costs and space
    available
  • Focus is to be on the spatial layout, i.e. more
    comfortable seating and cabins that give
    impression of space
  • Innovation s such as luggage bins that lift out
    of the way provide extra space
  • Décor, mirrors, dividing walls and lighting can
    all give the impression of more space
  • Size of windows has also been found by
    psychologists to have a strong influence on
    passenger well-being

50
Mini Case 3.3 Career Launcher
  • International online tutoring service for
    students
  • Special software to control webcams and tablet
    PC
  • India tutors all have maths or physics degrees
  • Well briefed on US schools curricula (empathy!)

51
Mini Case 3.4 Dial-a-Flight
  • Successful European Internet retailer of travel
    and tourism services
  • Strategy to improve customer contact and provide
    customization
  • Fast search engine, high personal contact for
    confirmation (your representative)
  • Employees are skilled, personable and
    enthusiastic about their products

52
Mini Case 3.5 Malaysia Airlines
  • One third of the dollar value of all goods
    shipped globally is air freight, growth rate over
    6 for next 20 years
  • Shipments from Asia include high value
    electronics and perishables, e.g. seafood
  • Prompted by the Gap Model Malaysia Airlines
    management conducted interviews. In-depth
    discussions with 19 airfreight managers revealed
    a total of 44 attributes of airfreight
  • Information gained allowed them to decide on how
    to enhance service augmentation and how to price
    it
  • Enhancements to service augmentation were clearly
    communicated to customers

53
Mini Case 3.6 Innovating in Healthcare
  • In many healthcare systems, waiting times are
    long, staff members are overworked and drab décor
    is not unusual
  • The role of the augmented service, in particular
    the servicescape, has been linked directly to the
    bottom-line in recent research in the US
  • Certain patients were found to require less
    medication
  • Hospitals that had been decorated in pastel
    shades and where attractive artwork was hung on
    the walls were found to have a higher level of
    well being in their patients
  • These departments found that dosages of
    self-administered painkillers were up to 45
    lower, subsequently leading to significant savings

54
Mini Case 3.7 Halifax Building Society
  • Focuses on the fast development of new service
    products, including new lending packages for
    house purchasers
  • Reduced time to develop and introduce new
    mortgage packages from six months to a few weeks
  • Four main steps to development process
  • Concept development
  • Trial
  • Delivery system definition
  • Introduction

55
Case Study AXA Insurance
  • What sort of ideas lead to the most important
    innovations? Are they brainwaves that lead to
    radical products or are they more pedestrian?
  • How can the best ideas be selected?
  • How can the nature of innovation be effectively
    communicated within a service organization?

56
Figure 3.5 AXA Innovation Quadrant
57
Chapter 4
58
Figure 4.1 The Influence of Innovation Strategy
on Other Elements of the Pentathlon
Innovation Strategy
Targets Calls for ideas Research
programmes Strategic partnerships
Strategic allocation Roadmaps Risk-reward
balance Metrics
Training Recruitment Manpower plans Processes
Resources Partnerships Acquisitions
Ideas
Implementation
People and organisation
59
Figure 4.2 The Need for Innovation
Strategic Intent
External Drivers
Competitors
Environment
Technology
Customers
Acceptable
?
Planned actions
NOW
FUTURE
Now
Future
Not Acceptable
Need For Innovation
60
Figure 4.3 Kano Model Features and Satisfaction
Customersatisfaction
Source Noriaki Kano et al 1984,1996
61
Figure 4.4 Kano Matrix
Source Based on Kano et al., 1984,1996.
62
Figure 4.5 The S-Curve
Performance
Base
Key
Pacing
Emerging
Total Investment
Source Based on Foster, 1986.
63
Figure 4.6 The Switch in Production of Phthalic
Anhydride from Using Naphthalene as a Feedback to
a New Process Using Orthoxylene
Source Based on Foster, 1986.
64
Figure 4.7 Dominant Design
Excitement features
Rate of
innovation
Brand values, price, processes
Dominant design emerges
Core product
Time
Source Based on Utterback, 1996.
65
Table 4.1 Evolving Technical and Commercial Focus
 
66
Table 4.2 Evolution of Features (Kano)
     
67
Figure 4.8 Sustaining and Disruptive Technologies
Product performance (feature A)
Sustaining technology
High-end customer requirement
L1
Disruptive technology
L2
Low-end Customer requirement
L3
L4
t1
t2
t3
t4
Time
Source Based on Christensen, 1995, 1997.
68
Figure 4.9 Feature Analysis for Airlines
Low-cost Carriers
Customer Rating
Traditional carriers
Meals
Ticketing
Low cost
Cabin staff
Many destinations
Global connections
Feature
Seating Comfort and choice
Adapted from Schoenberg 2000 and Kim and
Mauborgne 2005
69
Figure 4.10 Generic Roadmap
70
Figure 4.11a Roadmap for Planning a Vision
71
Figure 4.11b Product-Planning Roadmap
Time
Market/ Business
Customer needs, targets
Functionality, performance
Product/ Service
Development, research
Technology
Resources, infrastructure
Other
Source R. Phaal
72
Figure 4.11c Research for a Public Utility
Time
Needs
Demonstrators
Technology projects
Support projects
Source R. Phaal
73
Figure 4.12 Cascaded Matrices
Source R. Phaal
74
Figure 4.13 Cross-Impact Matrix
75
Figure 4.14 Scenarios for Entry-Level Car Design
(1980)
High-priced fuel
  • Green Highways
  • Smaller cars
  • Versatility
  • Engineers Challenge
  • Efficiency
  • Protectionism

Inner-directed values
Neo-traditional Values
  • Long live Detroit
  • Muscle cars
  • Brand Loyalty
  • Foreign Competition
  • Sportier cars
  • Light truck and vans

Low-priced fuel
From Ringland 1998
76
Mini Case 4.1 Allianz Versicherung
  • Hauspannenversicherung House 24 hour breakdown
    service
  • Covers most important house emergencies for 4,86
    EUR a month
  • Covers up to 300,- EUR per callout
  • Single call and qualified tradesmen will be sent
    out
  • Allianz organizes the payments
  • Developed by cross-functional, dual company team

77
Mini Case 4.2 Zara
  • Spanish fashion retailer - major part of the
    Inditex Group
  • 90 of goods made in own factories in northern
    Spain and Portugal transported to over 600 stores
    in 30 countries
  • 15 return on sales 5 times the typical level
    in the sector and still growing strongly
  • Described as possibly the most innovative and
    devastating retailer in the world
  • Key to Zaras success is the speed with which it
    can get new designs to market 2-3 weeks, the
    norm in the sector being 5-10 months

78
Mini Case 4.3 Betamax to Blu-ray
  • Sony launched Betamax, the first video recorder
    designed for the home market, in 1975 JVC
    followed with the VHS a year later
  • Sony was first-to-market but their 1-hour
    recording length was felt to be too short
  • VHS offered 2 hours from the start and many major
    companies decided to wait for it
  • Sonys sales grew until 1984 but dropped when VHS
    arrived. JVC gave greater emphasis to signing up
    partners and distributors. The better range of
    pre-recorded films in turn made VHS more popular
    with buyers
  • In 1995 DVD Philips / Sony and Toshiba announced
    competing video discs.
  • Industry pressure led to the single standard, DVD
  • In 2002 strong competition between Blu-ray and
    HD-DVD, with Blu-ray winning in 2007

79
Mini Case 4.4 Formule 1 Hotels, France
  • Launched in 1985, new concept for low-cost hotels
  • Customers just wanted a good nights sleep
  • Just provide basic facilities no traditional
    features, e.g. lounges, eating facilities,
    receptionist, spacious rooms, etc
  • Market leader in the sector
  • Within 10 years market share exceeded that of its
    5 nearest rivals combined

80
Mini Case 4.5 Electric-powered Cars
  • The lead initially held by start-up companies
  • New dominant design
  • A disruptive technology
  • Major architectural change for the incumbents
  • Value-destroying innovation

81
Mini Case 4.6 Caterpillar
  • Usability aimed at non-skilled users (rental
    segment)
  • Extensive serviceability features
  • Quick sight gauges (piece of mind)
  • Simplified access for daily checks
  • Hour-meter readable from outside
  • Professional marketing of the service brand
  • WW 24hour parts
  • Negative downtime concept
  • Close liaison /market research on supportabilty

82
Mini Case 4.7 Microsoft X Box
  • Microsoft had little competence in the design of
    many of the key elements that go to make up a
    games console.
  • For a successful entry into this established and
    competitive market Microsoft would have to
    assemble a coalition of suppliers, whose work
    would make or break the project.
  • Microsoft had one technical card to play a suite
    of software called Direct X that made it easy to
    write games.
  • Microsoft now provides only the business and
    design concept, the finance, the styling, and the
    core operating software .All the key components
    and the manufacturing were subcontracted.
  • The X Mini was launched in November 2001, by mid
    2004 they had sold 14 million units

83
Case Study Domino Printing Sciences
  • How can companies recognize that their
    technological basis is facing a technical limit?
  • Do such technological limits necessarily matter?
  • What issues face a company adopting a new
    technology that fully replaces their current one?
  • What issues face a company adopting a new
    technology that overcomes deficiencies of their
    current one but does not fully replace it?
  • What problems may a single-technology company
    expect to face when it adopts new, overlapping
    products?

84
Figure 4.15 Relationship Between Maximum Line
Speed and Character Height for Continuous Inkjet
Printing
8
Line Speed m/sec
6
4
2
0
2
4
6
8
10
12
Character height mm
85
Figure 4.16 Dominos New Product Range
86
Chapter 5
87
Figure 5.1 Creativity as the Intersection of Two
Different Frames of Reference
Diagram Koestler1.ppt
Source Koestler 1964.
88
Table 5.1 Approaches to Attribute Association
Source Based on Goldenberg et al., 2003 and
Altschuler, 1996, supplemented by examples
collected by the authors.
 
89
Table 5.1 Approaches to Attribute Association
(continued)
 
90
Figure 5.2 Hidden Needs Analysis in Product
Development
91
Table 5.2 The Augmented Service Offerings
92
Figure 5.3 Example of a Repertory Grid Interview
A)
1
Service B
B)
Rating Scale
C)
3
1
5
RepGridCombination2.ppt
93
Figure 5.4 A Repertory Grid on Outsourced
Services
 
94
Table 5.3 Generic Coding Scheme for
Observational Studies  
From Leonard Barton and other sources
 
95
Figure 5.5 Selecting a Lead User Group
Source Adapted from von Hippel et al., 1999.
96
Table 5.4 Attribute Levels
 
97
Figure 5.6 Conjoint Analysis Utility Graphs for
a Laptop Computer
Utility
Utility
250
320
2 x 2
400 GByte
2 x 2.26
2 x 2.4 GHz
Hard Disk
Speed
File ConjointUtility2.ppt
98
Table 5.5 Different Approaches to Identifying
Customer Problems and Requirements
Source Compiled by the authors.

99
Table 5.5 Different Approaches to Identifying
Customer Problems and Requirements

100
Mini Case 5.1 PA Consulting Group, UK
  • Around 200 engineers, scientists and technicians
  • Technical Director perceives his role as tending
    his garden in which creativity can flourish
  • Creativity is a free spirit it is an elusive
    subject to harness effectively into the delivery
    of business benefits
  • Division has been responsible for a number of
    hugely successful product innovations for
    well-known companies

101
Mini Case 5.2 Nokia
  • Going to the Gemba (where things actually occur,
    raw untainted information) means going out to do
    market research in the field
  • Whole NPD team went to Japan to observe mobile
    phone usage, taking photographs and using a
    semi-structured questionnaire
  • Team was trained using a guide

102
Mini Case 5.3 Miele
  • Focusing on application segments- Vacuum
    cleaner packages e.g. Parkett
  • Usability
  • Recognizing customers hidden needs- Allergy
    market product line
  • Listen and watch teams

103
Mini Case 5.4 Equant
  • Major data network provider
  • Used repertory grid interviews to spot emerging
    customer needs
  • Found that customers perceptions are not just
    based on technical measures

104
Mini Case 5.5 SEWA Bank
  • Many people live on under 1 a day
  • Microfinance over 10 million women (only) in 7
    states
  • Organized in self-help groups
  • Very small loans and low default rate
  • Innovation for the base of the pyramid

105
Mini Case 5.6 Clarks
  • Company planned to enter the walking boots
    segment
  • Conducted ethnographic market research into both
    the usage of walking boots and the buying
    decision I needed to understand the buying
    habits, end use and expectations of our new
    customer (Product Manager)
  • Identified that potential buyers will try on only
    about 2-3 pairs of boots
  • Designed the tongue of the boot so that potential
    buyers perceived the boots to be particularly
    comfortable

106
Mini Case 5.7 Lego Mindstorms
  • 40,000 kits sold per year since 1998
  • Lego Brickfest annual conference
  • Lead users recruited (peer recognition)
  • August 2006 new Robolab version

107
Mini Case 5.8 Versace
  • Versace dresses cost 5000, copies are 400
  • Counterfeiting is illegal but protecting the
    design and cut is more difficult
  • A new category of IPR now the EU offers 3-year
    protection for original fashion designs

108
Mini Case 5.9 Micro Scooters
  • The urban scooter was smash hit and continues to
    be popular today.
  • Wim Obouter recognized that when he wanted to go
    out for a drink or a meal in the evening, it was
    often too far to walk but not far enough to
    warrant getting his bicycle out of the cellar, or
    to drive.
  • He found a partner company to fund the tooling
    and a Japanese retail partner with an opening
    order of 20,000 scooters. These sold immediately
    and the market grew quickly to sales of 75,000
    units per weekalmost an instant success.
  • the product was great but it needed a strong
    brand to maintain a market leadership position.
  • With hindsight, Wim sees two issues with patents
    the time required before cover is achieved and
    the investment needed to enforce them.

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Case Study Texas Instruments
  • How does the chosen innovation strategy impact
    the management of ideas?
  • If end users do not understand the technology,
    how can they generate useful inputs for product
    designers?
  • How can managers match market trends to
    technological advances?
  • How can customers be encouraged to give ideas
    that are not simply based on improving current
    functionality?

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Chapter 6
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