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Innovation describes the discovery and development of new knowledge in a four-step process captured in the 4-I's:
- Idea
- Innovation
- Invention
- Immitation
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May be presented in terms of abstract concepts or as findings derived from basic research
Idea
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This describes the transformation of an idea into a new product or process, or the modification and recombination of existing ones
Invention
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This concerns the commercialization of an invention by entrepreneurs (within existing companies or new venture)
Innovation
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Copying a successful innovation
Immitation
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Describes the process by which change agents undertake economic risk to innovate - to create new products, processes and sometimes new organizations
Entrepreneurship
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Describes the pursuit of innovation using tools and concepts from strategic management
Strategic entrepreneurship
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Describes the pursuit of social goals by using entrepreneurship, use a triple bottom line approach to assessing performance
Social Entrepreneurship
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Entrepreneurs are the change agents fro
Creative destruction
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Innovations frequently lead to...
The birth of new industries
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What are the four stages of the predictable life cycle that industries follow
- Introduction
- Growth
- Shakeout
- Maturity
- Decline
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How do competitors and consumers change during the life cycle?
The number and size of competitors change with each stageDifferent types of consumers enter the market at each stage. Supply and demand changes as it ages
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Each stage of the industry life cycle is dominated by a different customer group, which responds differently to a new technological innovation
The core argument of the crossing-the-chasm framework
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The distinct difference in customer groups that enter in the early stages and customer groups that enter later leads to
A big gulf or chasm which companies and their innovations frequtly fall into
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How can you overcome the chasm
Manager need to formulate a business strategy guided by the "who-what-why-and-how" questions of competition
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Excited by the possibilities of the product rather than the "cool technology" of technology enthusiasts
Early adopters
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Base purchasing decisions on practicality can generate a herding effect
Early majority
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Type of innovation that steadily improves a product or service, often from incumbent firms
- Incremental
- Existing market / existing technology
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Type of innovation that uses novel methods or materials serving new markets, often from new firms
- Radical
- new market / new technology
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Type of innovation that reconfigures known components to create new markets
- Architectural
- new market / existing technology
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Type of innovation that uses novel technologies serving existing markets from bottom up
- Disruptive
- existing market / new technology
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A business model in which companies can obtain a significant part of their revenues by selling a small number of units from among almost unlimited choices
Long tail
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Framework for R & D that proposes impenetrable firm boundaries, firm must discover, develop and commercialize new products internally
Closed innovation
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Framework for R&D that proposes permeable firm boundaries to allow firms to benefit from internal and external idea's and innovations.
Open innovation
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A firm's ability to understand external technology developments, evaluate them, and integrate them into current products or create new ones
Absorptive capacity
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Competitive benefits that accrue to the successful innovator
first-mover advantages
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A firm's embeddedness in a complex network fo suppliers, buyers, and complementors, which requires interdependent strategic decision making.
Innovation ecosystem
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The positive effect (externality) that one user of a product or service has on the value of that product for other users
Network effects
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A firms resistance to changes in the status quo
Organizational inertia
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Roughly 80% of effects come from 20% of the causes
Pareto principle
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An agreed-upon solution about a common set of engineering features and design choices
Standard
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A situation in which transactions are likely not to take place because there are only a few buyers and sellers who have difficulty finding each other
Thin markets
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