Download - Commercial Success from Innovation

© Property of Stefan Stremersch©

Commercial Success From Innovation

Prof.dr. Stefan Stremersch Erasmus University Rotterdam IESE Business School Rotterdam, the Netherlands Barcelona, Spain [email protected] [email protected]

mailto:[email protected]



2

A Great Solution

Unmet

Customer

Needs

$trategy

Generating

Profit$

In Search for Commercial Success…


© Property of Stefan Stremersch© 3

… From a Structure Perspective…

Science Market


1. The Visionary Leader


2. Delegate Responsibility to Functions

R&D has the responsibility to come up with innovative ideas and solutions

Marketing has the responsibility to understand

customer needs

Degree of Involvement in the job

R&D/ Engineering

Marketing


“Highway to Hell”

Discovery (Idea Concept)

Development (Prototyping Manufacturing)

Launch Growth


3. Grassroots Innovation

Grassroots Innovation – emerges from the grassroots.


Grassroots Innovation: Cases


Grassroots Innovation at Alcatel-Lucent

N. Camacho, I. Verniers, C. García-Pont and S. Stremersch (2012), Alcatel-Lucent: Marketing the Cell Phone as a Mobile Wallet, IESE Business School, Case M-1279-E. Link: http://www.iesep.com/es/alcatel-lucent-marketing-the-cell-phone-as-a-mobile-wallet-83845.html

http://www.iesep.com/es/alcatel-lucent-marketing-the-cell-phone-as-a-mobile-wallet-83845.html























iTREK: Open Innovation with Students

Discovery (Idea Concept)

Development (Prototyping Manufacturing)

Launch Growth

Degree of Responsibility and Passion

R&D/ Engineering

Marketing


Symbiosis Between Science and Market

“Stairway to heaven”

Market: Discover unmet customer needs and hypothesize how they can be solved

Science: Discover new technology and hypothesize how it can be used to solve user needs


… From a Process Perspective…

The Shortest Distance From Lab to Market


Market Hypothesis

Early Validation

Business Model

Learn and Adapt Learn and Adapt

When you make a business plan, the only thing you know for certain is you will not execute according to the plan

“Everybody has a plan until they get punched in the face.” Mike Tyson

Developing Your Market Hypothesis


Market Hypothesis

Early Validation

Business Model


How Do You Find What’s In the Horizon?


“Prediction is very difficult…”


“…especially if it's about the future.” Niels Bohr

Nobel laureate in Physics (1922)

Hypotheses from Observation


“We found Koreans are the second hardest working people in the world. So we devised a way to have the store come to the people.”


Few

Many

Customer Intimacy, Not Customer Surveys.


Early Validation of Your Market Hypothesis


Market Hypothesis

Early Validation

Business Model


Early Validation: Can Only Be Done by Doing It!



“If you shipped your product and you’re not ashamed of it, you’ve probably shipped too late.”

Reid Hoffman Executive Chairman and co-Founder of LinkedIn

Vista Support Group.wmv


Validation from Experimentation...

Procter _ Gamble _ Tide-to-Go.mp4


Validation from Experimentation…

“Blockbuster” Roll-Out “Controlled” Roll-Out

Business Model


Market Hypothesis

Early Validation

Business Model


Business Model for Mobile Payment


Consumer’s Bank (Card Issuer)

Payment Card Network

Merchant’s Bank

Merchant Consumer

N. Camacho and S. Stremersch (2012), Rabobank Corporate Netherlands: Turning the Smartphone into an Engine of Bottom-Line Growth, IESE Business School, Case M-1286E. Available from: http://www.iesep.com/


http://www.iesep.com/es/rabobank-corporate-netherlands-turning-the-smartphone-into-an-engine-of-bottom-line-growth-83811.html

http://www.iesep.com/es/rabobank-corporate-netherlands-turning-the-smartphone-into-an-engine-of-bottom-line-growth-83811.html

Business Model for Mobile Payment


App-based Model

A Full Solution for Merchants

Software-as-Service

44 65 94 106.6

235 267

324 Avgerage Fare (EUR)

How Can Ryanair Fly You So Cheap?


35

30

2 4 6

5.5 1

0

10

20

30

40

50

60

70

80

90

Advertising revenue per passenger

Subsidies

Credit card handling fee

Priority boarding

One bottle of water

Checking-in bagagge

Ticket price

Cost = EUR 70

Profit

Ryanair Economics: London-Barcelona


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In Summary: The Hot Spot of Commercial Success


Market Hypothesis

Early Validation

Business Model


A Great Solution

Unmet

Customer

Needs

$trategy

Generating

Profit$

No Profit Failure

No-Customer Failure

Competitive Failure

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In Summary: The Hot Spot of Commercial Success


Learn and Adapt

Learn and Adapt

Market Hypothesis

Early Validation

Business Model

A Great Solution

Unmet Customer

Needs

$trategy Generating Profit$

In Summary: Conclusions

37 © Property of Stefan Stremersch©

• Grassroots innovation: essential in a firm’s innovation strategy to fuse market and science

• Formalize functional co-operation: Avoid highway to hell

• The only thing you know for certain is you will not execute according to the plan

• In innovation, prepare for failure. Otherwise, you are not innovative enough

• Learn & ADAPT!

• Customer Intimacy, not customer surveys • Validate quickly by doing it on limited scale • Pricing and costing is an integral part of the innovation

process not the job of specialists

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Prof. Dr. Stefan Stremersch

Follow me on Twitter: @StStremersch

https://twitter.com/

Download - Commercial Success from Innovation

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