Innovation Management

Torino, September 25 2007

Han van der Meer

Content

1. Personal introduction2. Introduction and definition3. Project, process, organisation

What is your definition of innovation ?

Innovation:

Durchsetzung neuer Kombinationen

Schumpeter, 1912

Defendable competitive advantage

innovation

Defense (minimum 3 points)

Intellectual property rights

• patents

• trade mark

• copy right

Cost leadership

• (secret) production knowledge

• special machinery

Entrance barrier (investments)

• development costs

• production costs

• established brand

• high margin for distribution channel

Exclusive relations

• raw materials

• distribution / sales

Circle of success

Defendable competitive advantage

marketshare

%

profit

reinvestment

innovation

Example

Jade

pillows

Pillow

low price,

low interest

Jade Excellent

Innovation is multifunctional

Source: Arthur D. Little, 1992

0% 10% 20% 30% 40% 50% 60%

social

finance

production

marketing

product

In distress you learn to pray

Nood leert bidden

Wooden neck support

Sylvana support

Beautysleeper

The whole of activities aimed

at the making of products,

the implementation of production methods,

as well as serving markets,

that each apart or in combination

are new for the considered organisation.

During

Industrial innovation

Can innovation be controlled

Source: A. D. Little Management Perspectives on Innovation, 1985

controllable but unusual

72%

uncontrollable12%

as usual16%

Are not ‘controllable’

Breakthroughs

Most innovations are

and controllable

incremental

index cash flow

100

200

300

400

500

600

700

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Innovation pays off

Source: (v.d. Zwan, 1992, Cobbenhagen, 2000)Year

invest in market and product innovation (substainable competitive advantage)

invest in cost reducing technology (efficiency)

• Laggards

• Fore runners