Management of Innovation and Product Development: Integrating Business and Technological Perspectives

Description

This textbook provides a unique and original understanding on innovation and on product design and development, and on their tight interconnections. It presents an integrated and holistic perspective on these two fields, allowing readers to understand how the phenomenon of innovation occurs – and must be managed – at different and interacting levels, from corporate strategy to design decision-making. This book explores these themes in a scientifically rigorous manner, associating academic findings with examples from business. It provides readers with the conceptual and decision-making tools required to understand and manage the process of innovation at different levels, from the analysis of industry-wide phenomena to the formulation of a strategy, and from the planning of operations to the management of technical choices. Chapters cover innovation as an economic and social phenomenon, the formulation of innovation strategy, the management of product development processes and projects and the technical design of products and services. Offering an invaluable resource to postgraduate students in economics, management and engineering, this book is also intended for managers and entrepreneurs. The book's topics are covered by associating academic findings with examples from business. For this new second edition of the book, case studies are made available through a companion LinkedIn page that is continuously updated by authors and by readers, while pointers to complementary content available on the internet are provided throughout the text. Preface Acknowledgements Contents Understanding Innovation and its Dynamics 1 Innovation in Business and Society Abstract 1.1 Defining Innovation 1.2 The Innovation Process and Its Actors 1.3 The Geography of Innovation 1.4 The Impact of Technological Innovation on Society 1.4.1 Innovation, Employment and Economic Disparities 1.4.2 Innovation, Ethics and the Law References 2 Technological Knowledge and Organizational Learning Abstract 2.1 Knowledge in Technology and in Science 2.2 An Evolutionary Theory of the Firm 2.3 Competitive Advantage Explained 2.4 Organizational Learning 2.5 Technological Knowledge and Creativity 2.6 Data, Technological Knowledge and Innovation References 3 The Many Types of Innovation Abstract 3.1 The Determinants of Innovation 3.2 Technological Paradigms 3.3 A Taxonomy for Technological Innovation 3.4 The Puzzling Nature of Disruptive Innovation 3.4.1 The Inability to Join an Emerging Paradigm 3.4.2 Incumbents Tend to Neglect Emerging Markets 3.4.3 Incumbents’ Need for Ambidexterity 3.5 When Radical Innovation Does not Disrupt 3.5.1 The Existence of Markets for Technology 3.5.2 S-curves Can Be Misleading 3.5.3 Localized Technological Change 3.5.4 Appropriability Regimes and Complementary Assets 3.6 Strategies for Incumbents, Strategies for Entrants References 4 The Dynamics of Innovation Abstract 4.1 Technological Lifecycles and Diffusion 4.2 Diffusion s-curves and Customer Segments 4.3 The Dominant Design Model and Its Implications 4.3.1 Dominant Designs and the Technology Lifecycle 4.3.2 The Emergence and Lock-in of Dominant Designs 4.3.3 Dominant Design and Vertical Integration 4.3.4 Dominant Designs in Process Industries and in Services 4.4 The Limitations of Abernathy and Utterback’s Model 4.5 The Incubation Period 4.6 Reverse Innovation 4.7 The Many Types of Innovation, Beyond Performance 4.8 Standards and the Dynamics of Innovation 4.8.1 Defining a Standard 4.8.2 How Do Standards Arise? 4.8.3 Strategies for Imposing Proprietary Standards 4.9 Timing of Entry and Firm-Mover Advantage References 5 Fundamentals of Technology Forecasting Abstract 5.1 Forecasting Revolutionary Change 5.2 Forecasting Evolutionary Change References Formulating an Innovation Strategy 6 The Many Approaches to Innovation Strategy Abstract 6.1 Choosing an Approach 6.2 Innovation and the Product Portfolio Management Strategy 6.3 Innovation and the Theory of Competitive Advantage 6.3.1 Competitive Advantage, the Five Forces and Generic Strategies 6.3.2 Competitive Advantage and Innovation Strategy 6.4 Intellectual Property Rights and Competitive Advantage 6.4.1 Patents 6.4.2 A Strategy for Intellectual Property 6.4.2.1 Patenting Decisions 6.4.2.2 Alternatives to Patenting 6.4.3 Patent Scanning and Industry Landscaping 6.4.4 Emerging Issues in Intellectual Property Management 6.4.4.1 Patentability of a ‘Critical’ Technology 6.4.4.2 The Fragmentation of the Technological Landscape 6.4.5 Alternative Policies to Patenting 6.5 Shaping and Blue Ocean Strategies 6.6 Innovation and the Resource-Based View 6.6.1 The Basics of the Resource-Based View in Corporate Strategy 6.6.2 Bridging the Core Competencies and Competitive Advantage Approaches 6.7 The Formulation of an Innovation Strategy References 7 Business Model Innovation Abstract 7.1 What is a Business Model 7.2 The Business Model Canvas 7.2.1 The Main Elements of the Business Model Canvas 7.2.1.1 Customer Segments (CS) 7.2.1.2 Value Propositions (VP) 7.2.1.3 Channels (C) 7.2.1.4 Customer Relationships (CR) 7.2.1.5 Revenue Streams (RS) 7.2.1.6 Key Activities (KA) 7.2.1.7 Key Resources (KR) 7.2.1.8 Key Partnerships (KP) 7.2.1.9 Cost Structure (CS) 7.2.2 Using the Canvas in Practice 7.2.2.1 Using the Canvas in New and in Existing Firms 7.2.2.2 Unbundling a Business Model 7.2.2.3 Competitive Benchmarking 7.2.2.4 Scenario Analysis 7.2.3 Understanding the Coherence of the Business Model 7.3 Representing a Business Model from the Perspective of a Value System: e3value 7.4 The Design of a Business Model References 8 Innovation Strategy as the Management of Competencies Abstract 8.1 Mapping and Planning a Competency Portfolio 8.2 Internal Research and Development 8.2.1 The Uncertain Relationship Between R&D Expenditure and Corporate Performance 8.2.2 Some Typical Features of R&D Activity 8.2.3 Positioning R&D Activity in Large Firms 8.3 Technology Acquisitions 8.4 Corporate Venturing 8.5 Hiring Human Resources 8.6 Non-equity Strategic Alliances 8.7 Equity-Based Alliances and Joint Ventures 8.8 Co-development 8.9 Sourcing R&D Activity from Other Parties 8.10 Licensing 8.11 Complete Outsourcing 8.12 The Framework of Open Innovation References 9 Innovation Strategy as Project Portfolio Management Abstract 9.1 Project Portfolio Management in a Strategic Perspective 9.1.1 Categorizing Projects and Defining Roadmaps 9.1.2 Platform Product and System Development 9.1.3 Technology Road Mapping 9.2 Defining a Process for Project Evaluation 9.3 Project Selection 9.3.1 Top-Down Versus Bottom-Up Selection 9.3.2 Financial Methods for Project Selection 9.3.2.1 Net Present Value 9.3.2.2 The Option Value of Projects 9.3.3 Optimization Methods 9.3.4 Multicriteria Methods 9.3.5 Mapping Methods 9.4 Best Practice in Project Portfolio Management References Making innovation happen—The Product Development Process 10 Organizing Product Development Activities Abstract 10.1 What We Know of Organizations Engaged in Innovation 10.1.1 The Role of Literature and Formalized Knowledge 10.1.2 The Role of Interpersonal Communication 10.2 Gatekeepers and Innovators 10.2.1 The Role of Technological Gatekeepers 10.2.2 The Role of Innovators 10.3 Physical and Virtual Spaces 10.4 Organizational Design for Innovation Activities 10.5 Project Staffing References 11 The Product Development Process Abstract 11.1 The Main Phases of the Product Development 11.2 The Peculiar Managerial Complexity of the Product Development Process 11.3 Tradeoffs in the Product Development Process 11.3.1 The Key Concern of Reducing Time to Market 11.3.2 Product Performance and Customer Satisfaction 11.3.3 Managing Costs in Product Development 11.4 Information Technology Support to Product Development Processes 11.5 From Traditional Managerial Approaches to Concurrent Engineering 11.6 From Concurrent Engineering to Approaches Based on Flexibility 11.7 Lean Product Development and Agile Project Management 11.8 Agile Product Development References 12 Project Management for Product Development Abstract 12.1 Activities and Resources in Product Development Projects 12.2 Management of Activity Precedence Networks with Iterations 12.2.1 Identifying Circuits and Iterations 12.2.2 Managing Circuits and Iterations 12.3 Project Scheduling 12.3.1 Scheduling with Infinite Resources 12.3.2 Project Crashing 12.3.3 Finite Resource Scheduling References 13 From Market Research to Product Positioning Abstract 13.1 Customer-Driven Product Development 13.2 Defining the Market 13.3 Understanding Customers 13.3.1 Identifying Customers, Users and Stakeholders 13.3.2 Identifying the Network of Influences 13.3.3 Eliciting Tertiary Needs from Customers/Users 13.3.4 Organizing Needs into a Hierarchy 13.3.4.1 From Tertiary to Secondary Needs 13.3.4.2 From Secondary to Primary Needs 13.3.5 Perceptual Mapping 13.4 The Different Importance of Needs: Kano’s Model 13.5 Pricing 13.6 Product Positioning 13.6.1 Horizontal Differentiation 13.6.2 Vertical Differentiation 13.7 Demand Forecasting 13.7.1 Product Demand in Stationary Markets 13.7.2 Product Demand Subject to Diffusion Phenomena 13.7.2.1 Bass’ Model of Diffusion 13.7.2.2 Managerial Implications of Bass Diffusion Process 13.7.2.3 Some Variants of the Bass’ Model 13.7.2.4 Other Diffusion Models 13.7.3 Demand Estimation to Evaluate Diffusion of Services 13.7.3.1 Bass-Type Models for Services 13.7.3.2 Choice-Type Models for Services 13.7.3.3 Gray Models 13.8 Market Share References 14 Specifying the Product Abstract 14.1 The Information Required for Developing System Requirements and Specifications 14.2 From Needs to Specifications 14.3 Identifying Requirements According to the User-Centered Design Approach 14.4 Quality Function Deployment 14.5 Product and Lifecycle Costing 14.5.1 Traditional Costing and Target Costing 14.5.2 Cost Estimating 14.5.3 Cost Estimating with Learning Effects 14.5.3.1 The Learning Effect 14.5.3.2 The Boeing-Crawford Experience Curve Model 14.5.4 Lifecycle Costing 14.6 Lifecycle Analysis References 15 Designing Products and Services Abstract 15.1 Some Theoretical Foundations of Design 15.1.1 Design as Problem-Solving—The Cognitive Process of Technology 15.1.2 The ‘Science of the Artificial’ and Decisional Processes 15.1.3 Design Thinking as Investigated by the ‘Science of Design’ 15.1.3.1 Descriptive Models of Design at the Individual Level 15.1.3.2 The Role of Constraints 15.1.3.3 Descriptive Models of Design in Groups and Organizations 15.1.4 The Objects of Design as Determinants of Design Process 15.2 Conceptual Design 15.3 Methods Supporting Conceptual Design 15.3.1 Functional Analysis 15.3.2 The Theory of Inventive Problem-Solving (TRIZ) 15.3.3 Other Methods for Creative Generation 15.3.4 Concept Combination and Classification 15.3.5 Screening and Selecting Concepts 15.4 Linking the Design Process to the Innovation Process References 16 Design and Redesign of System Architecture Abstract 16.1 Product Architecture Defined 16.1.1 Product Performance 16.1.2 Product Change 16.1.3 Product Variety 16.1.4 Standardization 16.1.5 Influence on the Organization and on the Supply Chain 16.2 The Design of the System Architecture 16.3 Designing Platform-Based System Architectures 16.4 Designing Modular System Architectures 16.5 Value Analysis and Value Engineering 16.5.1 Phase 1—Obtaining the Same Product at a Lower Cost 16.5.2 Phase 2—Obtaining the Same Functions at a Lower Cost 16.5.3 Phase 3—Obtaining the Required Functions at a Low Cost 16.5.4 Phase 4—Extending the Results Horizontally 16.6 Design to Value 16.7 Variety Reduction References