Assessment-1 (20%): Apple Case Study

Case Study Has the Apple Innovation Machine Stalled? Read this case
from the textbook (p.35) and discuss all the assessment questions in prep.

Which Apple product represents disruptive innovation and discuss its

value proposition, resources, processes and profit formula.

Discuss one of the Apples new product failures from the case using
various adoption and diffusion theories?

For this task, YOU are expected to be able to demonstrate how disruptive
innovation was practised in Apple. It is crucial that your research shows
true understanding of the concepts provided within the literature. It is
expected that a significant variety of resources will be used in order to
write this report and appropriate referencing in the body is a necessary
component of your report.
Slide 1.2

Format guidelines
Max. 1200-1600 Words

Font size: 12

Space: 1.5-spaced.

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
 Slide 1.3

Disruptive Innovation

Jason Hwang, and Clayton M. Christensen Health Aff

2008;27:1329-1335

2008 by Project HOPE - The People-to-People Health Foundation, Inc. Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.4

Disruptive Innovation

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
 The Four Components Of A Business Model.

Jason Hwang, and Clayton M. Christensen Health Aff

2008;27:1329-1335

2008 by Project HOPE - The People-to-People Health Foundation, Inc.

Disruption in Healthcare Institutions
Disruption in Healthcare Professionals
Slide 1.8

What is disruptive innovation?

1. Disruption is a process

2. Disrupters often build business models that are very different from those
of incumbents.

3. Some disruptive innovations succeed; some dont.

4. The mantra Disrupt or be disrupted can misguide us.

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
 9
Models of Technological Change: Disruptive Change

Fixed line telephony Mobil telephony

Credit decisions based upon the Automated lending decisions based

personal judgment of bank lending upon credit scoring systems
officers
Bricks & mortar retailing On-line retailing

Electric utility companies Distributed power generation (gas

turbines, micro turbines, fuel cells)
Classroom and campus-based Distance education, enabled by the
instruction Internet
Traditional textbooks Custom-assembled, modular digital
textbooks
etc etc

Source: The Innovators Dilemma, C.Christensen, HBS Press, 1997.

Slide 1.10

Q2.
Discuss one of the Apples new product failures from the
case using various adoption and diffusion theories?

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.11

Technology Adoption Model (TAM)

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.12

Unified Theory of Acceptance and Use of

Technology

Source: Venkatesh, V., Morris, M.G., Davis, G.B. and Davis, F.D., 2003. User acceptance of information technology: Toward
a unified view. MIS quarterly, pp.425-478.

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.13

Innovation Diffusion Theories

Diffusion theory of Rogers (1962)

Diffusion of innovation model. Source: Rogers (1995)

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.14
MARK101@UOW
14

The influence of product characteristics on rate of adoption

1. Relative advantage (e.g., finger print

security)

2. Compatibility (e.g., operating systems)

3. Complexity (e.g., perceived ease of use)

4. Trialability (e.g., test before buy).

5. Observability (e.g., perceived usefulness)

Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.15
MARK101@UOW 15

Five categories and profiles of product adopters

Early adopters
13.5%
Laggards
Innovators 16%
2.5%
Early majority Late majority
34% 34%

Time

3. Early majority: 5. Laggards:

1. Innovators:
Deliberate, Distrustful, Nervous,
Venturesome, highly
many informal Wary of new products or
educated, risk takers
social contacts ideas.

2. Early adopters:
Leaders in social 4. Late majority:
setting, slightly above Skeptical & cautious
average education
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 1.16

Bass Diffusion Model

Equation is read "The portion of
The Bass Model principle is the potential market that adopts at
t given that they have not yet
adopted is equal to a linear
function of previous adopters."

The other variables in the Bass

The three Bass Model parameters Model principle above, which are
(coefficients) that define the Bass Model for calculated from M, p, q and t, are:
a specific product are: f(t) -- the portion of M that adopts
at time t.
M -- the potential market (the ultimate
number of adopters) F(t) -- the portion of M that have
p -- coefficient of innovation and adopted by time t,
q -- coefficient of imitation.
a(t) -- adopters (or adoptions) at t

A(t) -- cumulative adopters (or

adoptions) at t.
Source:
http://www.bassbasement.org/BassModel/Default.aspx
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013