Technique 2.99 Landscape Innovation Technique/Map

Introduction

This shows changes over time in cumulative, independent, uncoordinated actions for hundreds of companies, products and services. They can be used to reveal great insights for testing innovation patterns.

It can characterises innovation along 2 dimensions, ie the degree to which it involves a change in

i) technology

ii) business model

Process

When creating an innovation strategy, organisations have to choose how much focus on innovation in technology and/or business model. The below matrix can help determine how much potential innovation fits within organisations' existing business models and technical capabilities

  Disruptive*a Architectural*a
requires a new business model i) Google (with android operating system for mobile devices that disrupts competitors because of its business model, not technical differences)

ii) Software companies (open-source software)

iii) DVD rental services (video on-demand)

iv) Taxi and limo operators (ride-sharing services)

v) Hotels (short-term rental accommodation)

i) Digital photography*b

ii) Pharmaceutical companies (personalised medicines)

iii) Newspapers (Internet)

 

  Routine*a Radical*a
leverages existing business model i) Intel (continuing to launch more powerful micro-processors that allowed the firm to maintain high margins and keep growing for decades)

ii) Microsoft (with Windows)

iii) Apple (with iPhone)

iv) Automobile Manufacturers (next generation models)

v) Vanguard (new index fund)

vi) Pixar (new 3-D animated movies)

i) Pharmaceutical companies (genetical engineering and biotechnology approach to drug discovery (starting in the 1970s)*c

ii) Aircraft manufacturers (jet engines)

iii) Telecommunications companies (fibre-optic cable)

  leverage existing technical competencies requires new technical competencies

Notes

a) Definitions of innovations

- routine (builds on organisation's existing technological competencies and fits with existing business model including customer base; as this is the least effective form of innovation, it should have low priority)

- disruptive (requires a new business model but not necessarily technological breakthroughs; it challenges or disrupts the business models of other companies)

- radical (challenge is purely technological; polar opposite of disruptive technology)

- architectural (combines technological and business model disruptions; the most challenging form of innovation)

b) "...for companies such as Kodak and Polaroid, ending the digital world meant mastering and leading the new competencies in solid-state electronics, camera design, software, and display technology. It also meant finding a way to earn profits from sales of cameras rather than from 'disposables' (film, paper, processing chemicals, and services)..."

Gary Pisano, 2015

c) the established pharmaceutical companies with decades of experience in chemically-synthesised drugs were challengers in building competencies in molecular biology. Fortunately, drugs derived from bio-technology were a good fit with their business models

What proportion of resources should be directed to each type of innovation? There is no one correct answer to this question as

"...The answer will be company-specific and contingent on factors such as the rate of technological change, the magnitude of technological opportunity, the intensity of competition, the rate of growth in core markets, the customers needs are being met, and the company's strengths. Businesses in markets where the core technology is evolving rapidly (like pharmaceuticals, media, and communications) will have to be much more keenly oriented toward radical technological innovation - both in opportunities and its threats. A company whose core business is maturing may have to seek opportunities through business model innovation and radical technological breakthroughs. But a company whose platforms are growing rapidly would certainly want to focus most of the resources on building and extending them..."

Gary Pisano, 2015

Another use of landscaping

The below example shows the results of 11 years of data on the evolution of the mobile communications industry's elements such as cellphones, pagers, PDAs to multifunctional devices (access to the Internet, cameras, etc) as they have become more appealing as status symbol.

An example is personal communication and media devices, 1994 - 2004

personalcommunication.jpg

 

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