I NNOVATION M ODELS AND S TRATEGIES

I NNOVATION

Innovation is the process and outcome of creating something new, which is also of value.

Innovation involves the whole process from opportunity identification, ideation or invention to development, prototyping, production, marketing and sales.

I NNOVATION M ODELS

1. L INEAR M ODEL

Also known as Traditional Phase Gate Model

Under this model, product or service concept is frozen at an early stage so as to minimize risk. It involves a series of sequential phases arranged in such a manner that the preceeding phase must be cleared with the permission of a gatekeeper before moving to next succeeding phase.

The gatekeeper examines whether the stated objectives for the preceeding phase has been properly met or not and whether desired development has taken place or not.

The model works only when :

Time required to innovate is shorter than rate of change in environment Quality, reliability and safety requirements sre critical It is safe and suitable for a first time beginner

Weakness/ Limitations

Low gatekeeper knowlegde may lead to poor judgements, delayed evaluation, or rejection of good projects Time consuming The concept is frozen too early, hoever customer needs/ market requirements may undergo change at a later stage It is focused on control through gates, not on customer It has a long review preparation time There is more focus on attaining target/ maturity, less on learning

S OME L INEAR M ODELS

Technology Push Model

Market Pull Model

First generation linear model It involves series of sequential steps i.e. Fundamental Research, Design, Engineering, Manufacturing, Marketing and Sales Consumer is treated as a passive recipient of output Thus ignores consumer needs and market requirements

Second generation linear model It involves a series of sequential steps i.e. assessing consumer needs/ market requirements, concept / idea generation, refinig idea to meet consumer needs, design, engineering, manufacturing, teast marketing and sales. It includes and integrates user needs in the innovation process

Eg: Menu operated computer software which was rejected by IBM was later on used to define Apple computers,an approach now adopted by almost all popular programmes

Eg: phones, UPS, inverters

2. F LEXIBLE M ODEL

The combination of linear and non-linear approaches has led to the emergence of third generation models which reflect the complexity of the real innovation process. These models include Technology Push + Market Pull combination, R&D + Marketing, Cyclical Model, etc. These models attempt to explain the radical innovation process in a rapidly changing business environment. In these models, phases are overlapped i.e. development in more than one phase can continue at the same point of time. No design is locked down earlier than absolutely necessary so as not to miss a newly emerging technology.

E XAMPLE :
Cyclical Model

According to this model, innovation is cyclical in the sense that it is driven by the product improvement cycle. This cycle often begins with customer needs. Also, an enterprise may be working for new product development simultaneously.

I NNOVATION S TRATEGIES

FACTORS

Government support and policies for technology and innovation

Risk taking abilities of the organization Risk taking attitude of top management

Organisational goals and policies

Degree of technological changes Degree of competition Availability of funds/ budgetary support Age of organisation viz. new vs old organisation

Thus a combination of above factors directly influence innovation strategies of the organisation. Broadly speaking , an organisation may follow two types of innovation strategies, which are:

Innovation Leader Innovation Follower

1. I NNOVATION L EADER

Under this strategy, a firm seeks to be the first to introduce innovations It aims at tapping first mover advantages like increased reputation, pre- empting competition, early profits, new sales, etc. Such strategies focus on radical, open, flexible non- linear innovation process

2. I NNOVATION F OLLOWER

A conscious and active strategy, by which a firm chooses not to be first on innovations. It aims at learning from the experiences of innovation leader by low cost estimation, by bringing better products or services through improvement etc. Such strategies focus on incremental, closed, linear innovation process.