Modul 1 Innovation and Product Competitiveness.pdf

teknik industri

1. Product Innovation:
Competitiveness & Opportunity Identification

2. New Product Development
Process
Opportunity Identification
Design
Testing
Introduction
Life-cycle Management
Evaluate at each
stage to determine
whether to proceed.
Key is to manage
risk of introducing a
failure or not
introducing a
success.
Proactive vs. Reactive
Go/No Go
Go/No Go
Go/No Go
Go/No Go

3. Expected Costs
Expected costs =
Cost of individual phase
Rate of Complete Success at the Beginning of that Phase
Costs
for
Phase
Likelihood of
Success in
Phase
Expected
Costs
Proportion of Total
Expected cost
Phase
1
$700 50% $5,400 15%
Phase
2
4,10057 15,800 44
Phase
3
2,60070 5,700 16
Phase
4
5,90065 9,000 25
Total13,30013 35,900 100%

4. Expected Time
Expected Time =
Time of individual phase
Rate of Complete Success at the Beginning of that Phase
Time for
Phase
Likelihood of
Success in
Phase
Expected
Time
Phase
1
5
months
50% 39 Months
Phase
2
6 57 23
Phase
3
12 70 26
Phase
4
4 65 6
Total27 13 94

5. High-Tech Market
1.Assessing market opportunity in high-tech
markets
2.Selected strategies: Growth, first mover

6. Strategic Planning for High-
tech Products
Market Opportunity
Assessment
New Product and
Technology Strategies
Projects
Projects
Aggregate Project
Plan

7. Assessing Market Opportunity
1.Product-market characteristics
•Market size/growth potential
•Unmet customer needs
•Entry barriers
•Competitive attractiveness
•Profit potential
•Risk
2.Organization’s capabilities and position

8. Size/Growth Potential in High-
Tech Markets
Heavy reliance on:
•Expert opinion
•Analogous product sales history
•Diffusion estimates
•Customer measurement in NPD process

9. Speeding Innovation
Diffusion
Significant advantage over existing products
Compatible with existing values, and past
experiences
Easy to understand
Easy product trial
Benefits from using product highly visible and
easily communicated to others

10. Bass Diffusion Model
•Forecasts market size and growth
characteristics for first time product purchases
in a new product category.
•Assumes innovators who adopt new products
without influence from others, and imitators
who rely on word-of-mouth from earlier
adopters of the product.

11. Bass Model
•First developed in 1969 by Frank Bass.
•Predicts future product class sales for good
s(t) = pm + [q-p]Y(t-1) –(q/m) [Y(t-1)
2
]
s(t): sales in period t
p: initial probability of adoption (about 0.04)
m: total numbers of potential buyers
q: a diffusion rate (about 0.3)
Y(t-1): total number of purchases by last period

12. Using p and q from
Analogous Product Sales
History
Time
Market
Sales
(000)
Color TV
B&W TV
Formula: S
t= pM + [q-p] Y
t-1–( q/M ) Y
t-1
2
Fit and solve for p and q: S
t= ß
0+ ß
1 Y
t-1+ ß
2Y
t-1
2
Examples: p q
B&W TV 0.0280.25
Color TV 0.0020.66
VCR 0.0250.60
Home PC 0.120.28

13. Forecast HDTV Using Color TV
Growth Characteristics
InnovationImitation
parameterparameter 2000 2000
(p) (q) ForecastActual
HDTV Using -> 0.002 0.66550K 630K
Total Potential (M) = 100 million households
New Product: High Definition Television

14. Customer Measurement in
NPD Testing
Test environments:
•Concept test descriptions, graphics,
prototypes
•Simulated shopping
•Test markets
Measure preferences for product
alternatives, purchase intentions, after-use
satisfaction, trial and repeat purchase rates

15. Issues in Customer
Measurement of Opportunity
Is the target market(s) well represented in the
sample?
Can customers give you accurate responses? Do
they lack understanding of the new product and
its benefit.
Does the test environment/procedure
approximate purchases/purchase process well?
How well are competitor’s moves incorporated?

16. Entry Barriers
•Experience curve/economies of scale
•Brand image
•Cognitive advantage
•Customer switching costs
•Proprietary technology/knowledge
•Legal protections
•Other (e.g. pricing, shelf space, production
capacity, investment requirements)

17. Competitor Analysis in High
Tech Markets
Potential competitors may be as important as
existing competitors (technology-enabled)
Capabilities (skills and knowledge) are critical
Strategic “intent” of competitor must be
assessed. “What are they likely to do? They
could, but would they?”

18. Market Attractiveness MatrixCriteria: Product-
Market 1
Product-
Market 2
Product-
Market 3
Product-
Market 4
Size/Growth
 O O 
Unmet Needs
   O
Entry Barriers
   
Competitive
Attractiveness
   
Organizational Fit
O O O 
Profit potential
   
Risk
O  O 
Other: New market
   O
Overall Rating
  O 


Good
O Fair
Poor

19. Growth Strategies
Market Penetration
Strategy
Product Development
Strategy
Market Development
Strategy
Diversification Strategy
Existing Products New Products
Existing
Markets
New
Markets

20. Technology Influence on
Growth Strategies
Existing Products New Products
Existing
Markets
New
Markets
Technology opportunities
lead to new products
And often lead to new
market opportunities

21. Examples
Existing Products New Products
Existing
Markets
New
Markets
IBM/business computer ->Line of bus. computers
Epson/printers -> Color ink-jet printers
Microsoft/PC software -> Word processing SW
Palm/PDA -> Color-enhanced PDA
-Personal computers
-Digital photography
-Home entertainment
-Voice communications

22. Growth: Strategic Questions
Is market saturated?
Can you take share
from competition?
Do you have superior
marketing skills?
Unmet needs in existing
market?
Product line holes?
Do you have superior
R&D skills?
Leverage skills/position
into new markets?
Able to do “battle” with
new competitors?
Rate of diffusion of
innovations? (new to cust.)
Existing Products New Products
Existing
Markets
New
Markets

23. Growth Strategy Wisdom
•Avoid “incumbent inertia” (complacency,
conservatism and conceit)
•Beware of “cannibalization phobia”
•New markets can be shaped
•Early market entrants (first movers or fast
followers) can have enduring advantages

24. First Mover vs. Fast Follower
First MoverFast Follower
Scale economies SignificantNot significant
or acquirable
Firm’s competency InnovationPromotion,
Production
Imitation costs High Low
Protection mechanisms High Low
Preemption of scarce resourcesLikely Not likely
Preferences can be shaped earlyYes No
and endure
Customer switching costs High Not prohibitive
Learning from first mover DifficultEasy

25. Idea Generation Exercise
Please take a few minutes to think
problems you have in your life or
work such as shopping, dining,
phone, grooming, pet
management, transportation, car
maintenance, etc. Then, generate
at least three new product ideas to
solve the problems.
Teams are required to present
ideas generated to class.

26. Source of Ideas
Methods of Idea
Generation
Technology
Market/user solution
Production/service
Competition/other firms
Channels of distribution
Suppliers
Managers/employees
Direct search
Innovation
Exploratory user study
Facilitate lead users
Creative methods
National policy
Alliance acquisition
Idea Generation

27. Idea Generation:
Empathic Methods
Empathic methods are methods which provide an
understanding user needs through empathy with
the user world rather than from user articulation
of needs.
Methods:
-Observation of users’ behaviors
-Ethnographic exploration -NPD designers
immersed user’s environment

28. Empathic Method
1.Critical observation
2.Capture the data
3.Reflection and analysis
4.Brainstorm solutions
5.Develop prototypes of possible solutions
Source: Leonard and Rayport (1997)

29. Empathic Information
1.Triggers of use –what prompts usage
2.Unarticulated user needs
3.Interactions with the user’s environment
4.Customization of products
5.Intangible product attributes
Source: Leonard and Rayport (1997)

30. “Day-in-the-Life”
Experiences
Learn from doing what they do in everyday and extraordinary
situations
Use your own and your competitor’s products
Acquire training and background similar to your customers

31. Lead Users
1. Lead users have needs aheadof the general
marketplace. They face needs that will be
general in a marketplace -but face them months
or years ahead of the bulk of the marketplace.
(and)
2. Lead users expect to benefitsignificantly from a
solution to those needs.

32. Lead Users
Lead users can be any of the following:
1. Lead users in the target application.
2.Lead users in analogous markets.
3.Lead users of important related attributes of
products (e.g. technology experts)

33. Lead-User Process
1.Project Preparation and Planning
•achieve top management support and form cross-
functional team
•background research on product category
2.Identify Trends and Customer Needs
•identify markets and core needs
•identify leading-edge expertise
3.Explore Lead User Needs and Solutions
•identify lead users; interview and screen
•generate concepts in lead user workshops
•test concepts with typical users
4.Refine Concept Solution
•finalize solution and create strategic plan

34. Lead User Examples
Product Trends Lead users Outcome
Wall pipe hangers Easy to install
Actuated interlocking
fasteners
Light non-corrodible
materials
Expert pipe hangers from industrial
plumbing firms who concurred with
the trends and made improvements
to existing products
Advanced new pipe hanger system
rating high on originality, feasibility and
comprehensiveness.
Printed Circuit Board
CAD software
Chip density Expert engineers who performed
more complex designs and often
developed their own systems
Product which had direct links to CNC
machine, easy input interfaces, stored
data centrally, full function simulation,
more board layers, routing thin line.
Snack food Healthy foods
“Weekend” amateur
athleticism
Nutrition scientist with experience in
an elite Navy combat group
National medal winning weightlifter
Competitive bike racer
Novel line of healthy snacks for
weekend athletes

35. Lead User Examples
(cont.)
Hearing aids Cosmetic appeal
(target those in their
50’s)
Customizable, low-
cost tubing
Low acoustical
feedback
Ease of purchase
Cosmetic dentistry specialist
Costume jewelry manufacturer
Medical tubing supplier
Suppliers of amplifiers for prof.
football teams
Video/music industry specialist
Opticians with mass retailer
experience
Retailer of eyeglasses
?

36. Identify Lead Users
Gatorade
White-out fluid
Laser Printer
Sofa
Mountain bikes
Surf boards
Your Businesses

37. Lead User Communities
•“if you want something done right, do it
yourself”
•“Sticky” information is difficult to transfer to
manufacturers
•Needs are changing, and innovation evolves
over time
•Lead users willing to reveal innovations freely
Source: von Hippel

38. Lead Users: Advantages and
Disadvantages
Advantage:
Lead users able to articulate future needs and
possibly solutions for the general market.
Disadvantages:
1) Lead users can be difficult to identify.
2) Lead users may not cooperate.

39. Form FunctionCustomerBenefits
ComputerRecords Office Record concerts
Fax EntertainBusinessmenshow movies
VCR documentsTraveler Show how to cook
TelephoneTeach House wivesshow techniques
TV Train Gardenertransmit
Printer Receive Carpenter
Projector Musician
Copier Kids
Camera Students
Handicam
Idea Generation Matrix

40. Idea Evaluation
I =
T x C x P
D
I: index of attractiveness
T: probability of successful technological development
C: probability of commercial success given that it is
technically successful
P: profit if successful
C: cost of development

41. NEWPROD Scoring Model
Developed by Dr. Robert Cooper
Database of projects from 100 Canadian
industrial firms (2500 new product projects)
Found 8 factors which were significantly related
to product success
Weights for the factors were estimated using
regression analysis
Managers rate projects on each factor, and the
project score is derived from these rating and
factor weights.

42. NEWPROD Example
FactorProjectProject Score
Factors: Weight Scorex Weight
Product superiority/differentiation1.7441.192.08
Overall product/firm/resource compatibility1.138-.16-.18
Market need, growth, and size0.801.880.70
Economic advantage of product to end user0.722-.49-.35
Technological resource compatibility0.342-.19-.07
Product scope 0.2250.900.20
Market competitiveness -.301-1.820.55
Newness to the firm -.354-.240.09
3.02
Relative importance of factors can be judged by comparing their scores.
Score of this project can be compared with alternative projects for funding.
Score of this project can be compared with past successful projects.