Innovation management and business modelling:
examen
1. Introduction
What is the difference between innovation and invention?
Invention: A new idea or a novel creation (e.g., first light bulb).
Innovation: Bringing that idea to market or use (e.g., commercially
producing and distributing light bulbs).
Innovation = Invention + Implementation
Innovation solves real-world problems and creates value
Understanding innovation: the intersection of 3 key elemenets:
Customer desirability:
Who needs it?
What are their preferences?
What is the market gap?
o Unmet needs
Customers have goals - they want to get something
done.
A market gap exists when no one is helping them do it
well.
If a product isn’t desirable to users, it won’t succeed - no
matter how advanced or profitable it could be.
E.g.: Uber made getting a ride easier and faster,
ChatGPT helps people generate ideas quickly, Spotify
lets users access music instantly, without owning it.
o Market Gap is a definition of a job that people would
like to get done that is not being done satisfactorily
“People don’t want to buy a quarter-inch drill. They want
to buy a quarter-inch hole!” (Levitt, 1960)
, “What the customer buys and considers value is never a
product; it is always utility- that is what a product does
for him.”
Business viability:
Can you make money with it?
Technology feasibility:
Can we make it?
Is it unique? Protectable?
-> also social value creation through innovation
Innovation vs invention
Why innovation matters:
1. Source of Competitive advantage (for innovating firms)
2. Meeting customer needs better or differently
3. Retain Customer Relevance (for incumbents)
4. Environmental changes can make products, models, or entire
industries obsolete:
Main external drivers:
Technological advancements (e.g. AI, blockchain, IoT, renewable
energy tech)
Social trends (e.g. plant-based food, ethical brands)
Economic Pressures (e.g. recession -> Freemium models)
Regulatory & Policy Changes (e.g. climate regulations -> clean
tech)
Global Crises & Shocks (e.g. COVID-19 -> remote work tech)
, Demographic Shifts (e.g. aging population -> elderly care)
Failure examples:
Kodak
Nokia
Succes examples:
Netflix
o Original Business Model (1997):
DVD rental by mail
Competing with Blockbuster’s physical rental stores
o Key innovations:
Subscription Model
Introduced monthly subscription
Streaming Revolution (2007)
Disrupted its own DVD business
Became a leader in on-demand digital
streaming
Original Content (2013 → House of Cards)
Adobe:
o Business Model Shift:
From one-time software sales to Subscription-based
model (Adobe Creative Cloud)
overcome threats fromm piracy and cheap/ free
alternatives (e.g. Canva)
why technological innovation matters:
Technological innovation is the single most important driver of
competitive success in many industries
o Many firms earn over one-third of sales on products developed
within last five years
o Product innovations help firms protect margins by offering
new, differentiated features
o Process innovations help make manufacturing more
efficient
o Data about processes or customers can be turned into a
profitable business
Google Ads
IoT based data analytics analyzing your car
, driving behavior (Tesla) or machine optimization of
industrial customers in B2B
Advances in information technology have enabled faster innovation.
o CAD/CAM systems enable rapid design and shorter production
runs.
o ChatGPT: Rapid access to cognition / knowledge à What is
important?: Not what you know but how you acquire
knowledge and how you use it for your own goals
Importance of innovation and advances in information technology
have led to:
o Shorter product lifecycles (more rapid product obsolescence).
o More rapid new product introductions.
o Greater market segmentation.
o Algorithms are restructuring many business activities (e.g.
inpatient scheduling for radiologists)
Impact on society:
Innovation enables a wider range of goods and services to be
delivered to people worldwide.
o More efficient food production, improved medical technologies,
better transportation, etc. Increases Gross Domestic Product
by making labor and capital more effective and efficient.
However, may result in negative externalities
o For example, pollution, soil erosion, antibiotic-resistant
bacteria.
o And they may become prohibitively expensive:
Medical care in the USA (but digital health may offer
solutions) Isolation techniques and climate neutral
houses are imposed by the government in Belgium, but
they make houses expensive.
Innovation cycles:
Innovation cycles or waves = historical patterns where clusters of
breakthrough technologies reshape the economy and society. Each
wave brings new business opportunities, reorganizes industries, and
eventually matures before being replaced by the next.
o Nikolai Kondratiev’s long waves (1925): Long-term (40–60
year) economic cycles linked to clusters of innovations
examen
1. Introduction
What is the difference between innovation and invention?
Invention: A new idea or a novel creation (e.g., first light bulb).
Innovation: Bringing that idea to market or use (e.g., commercially
producing and distributing light bulbs).
Innovation = Invention + Implementation
Innovation solves real-world problems and creates value
Understanding innovation: the intersection of 3 key elemenets:
Customer desirability:
Who needs it?
What are their preferences?
What is the market gap?
o Unmet needs
Customers have goals - they want to get something
done.
A market gap exists when no one is helping them do it
well.
If a product isn’t desirable to users, it won’t succeed - no
matter how advanced or profitable it could be.
E.g.: Uber made getting a ride easier and faster,
ChatGPT helps people generate ideas quickly, Spotify
lets users access music instantly, without owning it.
o Market Gap is a definition of a job that people would
like to get done that is not being done satisfactorily
“People don’t want to buy a quarter-inch drill. They want
to buy a quarter-inch hole!” (Levitt, 1960)
, “What the customer buys and considers value is never a
product; it is always utility- that is what a product does
for him.”
Business viability:
Can you make money with it?
Technology feasibility:
Can we make it?
Is it unique? Protectable?
-> also social value creation through innovation
Innovation vs invention
Why innovation matters:
1. Source of Competitive advantage (for innovating firms)
2. Meeting customer needs better or differently
3. Retain Customer Relevance (for incumbents)
4. Environmental changes can make products, models, or entire
industries obsolete:
Main external drivers:
Technological advancements (e.g. AI, blockchain, IoT, renewable
energy tech)
Social trends (e.g. plant-based food, ethical brands)
Economic Pressures (e.g. recession -> Freemium models)
Regulatory & Policy Changes (e.g. climate regulations -> clean
tech)
Global Crises & Shocks (e.g. COVID-19 -> remote work tech)
, Demographic Shifts (e.g. aging population -> elderly care)
Failure examples:
Kodak
Nokia
Succes examples:
Netflix
o Original Business Model (1997):
DVD rental by mail
Competing with Blockbuster’s physical rental stores
o Key innovations:
Subscription Model
Introduced monthly subscription
Streaming Revolution (2007)
Disrupted its own DVD business
Became a leader in on-demand digital
streaming
Original Content (2013 → House of Cards)
Adobe:
o Business Model Shift:
From one-time software sales to Subscription-based
model (Adobe Creative Cloud)
overcome threats fromm piracy and cheap/ free
alternatives (e.g. Canva)
why technological innovation matters:
Technological innovation is the single most important driver of
competitive success in many industries
o Many firms earn over one-third of sales on products developed
within last five years
o Product innovations help firms protect margins by offering
new, differentiated features
o Process innovations help make manufacturing more
efficient
o Data about processes or customers can be turned into a
profitable business
Google Ads
IoT based data analytics analyzing your car
, driving behavior (Tesla) or machine optimization of
industrial customers in B2B
Advances in information technology have enabled faster innovation.
o CAD/CAM systems enable rapid design and shorter production
runs.
o ChatGPT: Rapid access to cognition / knowledge à What is
important?: Not what you know but how you acquire
knowledge and how you use it for your own goals
Importance of innovation and advances in information technology
have led to:
o Shorter product lifecycles (more rapid product obsolescence).
o More rapid new product introductions.
o Greater market segmentation.
o Algorithms are restructuring many business activities (e.g.
inpatient scheduling for radiologists)
Impact on society:
Innovation enables a wider range of goods and services to be
delivered to people worldwide.
o More efficient food production, improved medical technologies,
better transportation, etc. Increases Gross Domestic Product
by making labor and capital more effective and efficient.
However, may result in negative externalities
o For example, pollution, soil erosion, antibiotic-resistant
bacteria.
o And they may become prohibitively expensive:
Medical care in the USA (but digital health may offer
solutions) Isolation techniques and climate neutral
houses are imposed by the government in Belgium, but
they make houses expensive.
Innovation cycles:
Innovation cycles or waves = historical patterns where clusters of
breakthrough technologies reshape the economy and society. Each
wave brings new business opportunities, reorganizes industries, and
eventually matures before being replaced by the next.
o Nikolai Kondratiev’s long waves (1925): Long-term (40–60
year) economic cycles linked to clusters of innovations
