Strategy Chapter 7

The firm which comes up with an innovation has a first mover advantage

An innovation is a novel and useful idea that is successfully implemented

• describes the process by which change agents (enterpreneurs) undertake economic risk to innovate

strategic enterpreneurship: pursuit of innovation using tools and concepts from strategic management

social enterpreneurship: pursuit of social goals while creating a profitable business (triple bottomw line)

• introduce change into the competetive system

1. Introduction: induvidual or companx launches a successful innovation, a new industry may merge
2. Growth: market growth accelerates in the growth stage, innovation has gained market acceptance, demand increases rapidly
3. Shakeout: the rate of groth declines, firms beginto compete directly against one another for market share
4. Maturity: after shakeout few firms remain, industry structure morphs into oligopoly
5. Decline: changes in the external environment (PESTEL) often casue decline, market size shrinks and demand decreases

• exit: bankruptcy or liquidation
• Harvest: fimr reduces investments in product support and other resources
• Maintain: Firm continues investments in product support and marketing despite decline
• Consolidate: firm buys rivals to stake out strong position - possibly approaching monopol

• shows that each industry life cycle is dominated by a different customer group

Innovator: engineering mindset and pursue new technology

Early adopters: demand is sriven by intuition and vision rather than technology

Early Majority: strong sense of practicality, seek reviews before purchase

Late Majority: similar to early majority, lack of confidence, prefer well established firms with strong brand image

Laggers: only adopt new technology if absolute neccessary, dont want new technology

(Chasm is profound difference between people)

• catigorizes innovations along a market and technology dimensions

Incremental: builds on establoshed knowledge base and steadily improves an existing product for existing markets

Radical: draws on novel methods or materials, derives from different knowledge base or from a combination of eisting knowledge. Targets a new market with new technology

Architectual: new product with known components, based on existing technologies for new market

Disruptive: leverages new technology to attack existing markets

A platform business is an enterprise that matches external producers and consumers that it creates value for all participants

3 dimensions:

• a platform is a business that enables value-creation ineractions between external producers and consumers
• its purpose is to consummate matches among users and facilitate the exchange of goods and thereby enables valuecreation for everyone who's involved
• the platform provides an infrastructure for these interactions and sets governance conditions for them

Advantages: 

1. platforms scale more efficiently than pipleines by eliminating gatekeepers
2. platforms unlock new sources of value creation and supply
3. Platforms benefit from community feedback

1. from resource control to resource orchestration
2. from internal optimization to external interactions
3. from customer value to ecosystem value