1. Different approach of Innovation: Open vs Closed Innovation
2. Implementation of Innovation in different industry
3. Technical Viability – Firm & Project related factors
4. Intellectual Property and Counterfeiting
5. Different types of Strategic Alliances and the Risk Associated
6. Management of R&D
7. Brand Strategies – including brand extension
8. Services product development and the role of consumers
Session 2 BHO2259 PRODUCT & SERVICES INNOVATION Please turn your camera on Welcome to Dr Evi Lanasier
[email protected] FINAL EXAM WEDNESDAY 21 April Duration : 2 hours (12pm to 2pm) No of questions : 8 questions, each question worth 5 points **please turn your camera on during the test” Sessions for Review Session 1 : Innovation Management Session 3 : Managing Innovation & Intellectual Property Session 5 : Strategic Alliances and Knowledge Transfer Session 6 : Management of R&D Session 7 : Product and Brand Strategies Session 8 : New Product Development Topics to review 1. Different approach of Innovation: Open vs Closed Innovation 2. Implementation of Innovation in different industry 3. Technical Viability – Firm & Project related factors 4. Intellectual Property and Counterfeiting 5. Different types of Strategic Alliances and the Risk Associated 6. Management of R&D 7. Brand Strategies – including brand extension 8. Services product development and the role of consumers Innovation Management Week 1 – Session 1 What is innovation? • The term comes from the Latin word innovare meaning ‘to make something new’ • Innovation is a process of turning opportunity into new ideas and of putting these into widely used practice. Innovation Process Figure 1.1 Overview of the innovation process Open Innovation "Open innovation” means involving external players in the innovation process in order to acquire information on needs or solutions. • The strategic and systematic opening up of internal innovation processes to include external knowledge can result in significant competitive advantages. Internet has been a catalyst for open innovation Open vs Closed Innovation Closed Innovation Open Innovation The smart people in our field work for us Not all smart people work for us. We need to work with smart people inside and outside the company To profit from R&D, we must discover it, develop it and ship it ourselves External R&D can create significant value. Internal R&D is needed to claim some portion of that value The company that gets innovation to market first will win Building a better business model is more important than getting to market first If we create the most and the best ideas in the industry, we will win. If we make the best use of internal and external ideas, we will win. We should control our IP, so that our competitors cannot profit from it. We should profit from other’s use of our IP (license out) and we should license in other’s IP whenever it advances our business model. We will own all results from contract research with universities We will partner with universities to create knowledge and encourage use outside our field Source: http://www.innovationtoolbox.com.au Managing Innovation and Intellectual Property Session 3 Organisations and Innovation Innovation within Firms • Innovation is typically centred within firms • Long-term success is associated with innovation • The dilemma of innovation management Figure 4.1 Managing the tension between the need for creativity and efficiency Organisations and Innovation Dilemma of Innovation Management • Firms need to make room for creativity and innovation and they need to manage it. • Firms need to exploit and explore • Exploitation is about efficiency gain, increasing productivity, control and managing uncertainty and changes etc. • Exploration is about search, discovery, innovation and embracing variation and changes. • The role of research and development (R&D) is crucial for innovation • Spending a lot of money does not guarantee new innovations and financial success stories Organisations and Innovation Investing in R & D and Innovation • The elements that make up a truly innovative company are many: • a focused innovation strategy, • a winning overall business strategy, • deep customer insight, • great talent, and • the right set of capabilities to achieve successful execution. • Crucial issue is the corporate culture — the organisation’s self-sustaining patterns of behaving, feeling, thinking, and believing — in tying them all together. • Source: Booz & Company Facilitating Innovation Organisational Characteristics that Facilitate the Innovation Process • Research by van der Panne et al. (2003) on innovation management literature examined a wide range of factors that contributed to success and failure of innovative projects within firms. • These factors where classified into four major groups 1. FIRM related factors 2. PROJECT related factors 3. PRODUCT related factors 4. MARKET related factors • The critical factors for innovation success model by van der Panne et al. (2003) is the core analysis basis for your strategy report. • You need to evaluate how the factors contributed to a successful marketable new or innovative product/service for your selected company • So thoroughly read the article and this book section and analyse your selected company based on the critical factors Facilitating Innovation Organisational Characteristics that Facilitate the Innovation Process Figure 4.6 Critical factors for innovation success Source: van der Panne et al. (2003). Tools for Innovation Management Tools for Innovation • Management tools and principles does not solely focuses on big R&D investments, or using latest technology • Key challenges faced by managers today • The urge to do new things and spotting opportunities • Redefining customer value • Courage to take and manage risks • Shift in mindset from business optimisation to business creation • Well established management principles can help sustain organisational innovation Managing Intellectual Property • IP’ refers to unique, value-adding creations of the human intellect that results from human ingenuity, creativity and inventiveness • IP can include a logo or slogan, a product or service, or a business name or a production process • Patents, Copyright, Registered designs, trademarks are various types of IP • IP in Australia: www.ipaustralia.gov.au • Protecting and managing your IP assets is critical when establishing your product or service in the market and is often the difference between an organisation's success or failure and to remain competitive. • Case eBay vs L’Oreal • Many businesses don't realize the value of their IP and as such, don't protect it properly. • Creative ideas or tangible inventions can be protected by either formal or informal mechanisms. An IP right is thus a legal right. http://www.ipaustralia.gov.au/ Managing Intellectual Property Types of IP Patent Copy right Trademarks A patent for an invention is the grant of a property right to the inventor Provides exclusive rights to creative individuals for the protection of their literary or artistic productions A trademark is IP protection for a single word, phrase, symbol, sound or colours that distinguish one company, product or service from another Right to exclude others from making, using, offering for sale, or selling the invention Copyright is automatic. As soon as you create a work, you have copyright protection Trademarks usually focus on your specific industry rather than general protection A patent will last for twenty years after your application for the patent. (Not renewable) Copyrights for your new work will last for your lifetime, plus an additional seventy years (Not renewable) Trademarks are issued for a finite period of time but can be renewed indefinitely Managing Intellectual Property Alternative Strategies to Patenting Table 6.3 Alternative strategies to patenting Managing Intellectual Property Trademark • A trademark is IP protection for a single word, phrase, symbol, sound or colours that distinguish one company, product or service from another • Establish business image, goodwill and reputation • Helps businesses build and retain demand for their products and services • People rely on trademarks as indicating quality, value for money, luxury, origin etc. • Trademarks have to be unique, non deceptive, not confusing Managing Intellectual Property Brand Name and Trademark Brand names and trademarks are “cousins” as they serve to facilitate identity or origin or quality of a product or service Brand name has value (i.e., brand equity); so trademarks will carry value Brands create loyalty Brands symbolise a certain quality level Brands and trademarks can be licensed to other companies Managing Intellectual Property Copyright • Provides exclusive rights to creative individuals for the protection of their literary or artistic productions • Illegal software copy and music and movie download have serious copyright implications • Napster (2002), Grokster (2005), MegaUpload (2012) Managing Intellectual Property Importance of Copyright • Grants ownership rights to creators of IP, giving them control on how their work can be used • Ensures copyright holders income from their work • Allows for “fair use”. Excerpts of a copyrighted work to be reproduced for purposes of criticism and comment, scholarship and research • Copyright infringements have legal implications Managing Intellectual Property Counterfeit Goods and IP • Counterfeiting is the practice of manufacturing goods, often of inferior quality, and selling them under a brand name without the brand owner’s authorisation. • Counterfeit goods are sold under a trademark that is identical to or substantially indistinguishable from the brand owner's trademark for the same goods, without the approval or oversight of the trademark owner. Managing Intellectual Property Counterfeit Goods Impact • Value of counterfeit products marketed annually in the world is estimated to be over $1.7 Trillion • 7% of all global trade • Largest markets: CHINA & INDIA • Popular products: clothing, jewellery, purses, shoes, CDs, DVDs, software, medications, cigarettes, electronic equipment, toys, parts, baby formula etc https://www.youtube.com/watch?v=KahwPHBrnhw https://www.youtube.com/watch?v=KahwPHBrnhw Managing Intellectual Property Counterfeit Goods • People actually choose to purchase counterfeit products under the assumption that they are paying less for products that are equal in value to the legitimate products they mimic. • People who deliberately choose to buy counterfeit products are not victims. Instead they support the criminally deceptive practices of counterfeiters by creating a built-in market for their goods. • Counterfeiting would disappear if there were no willing consumers of counterfeit products. Managing Intellectual Property International Anti Counterfeiting Coalition (IACC) • Counterfeiting is illegal and purchasing counterfeit products supports illegal activity. • Counterfeiters do not pay taxes meaning less money for your city's schools, hospitals, parks and other social programs. • Counterfeiters do not pay their employees fair