Topics

Innovation Management is the systematic planning and control of innovations in organizations. In contrast to creativity techniques that focus on the development of ideas, innovation management also deals with the commercial exploitation of ideas and their implementation in economically successful products and services.

Innovation management is part of the corporate strategy implementation and can relate to products, services, manufacturing processes, organizational structures and management processes. While product innovation and service innovation are typically designed to better serve the needs of customers, process innovation tends to focus on improving the effectiveness and efficiency of in-house processes. Business model innovation, on the other hand, is a deliberate change of an existing business model or the creation of a new business model for an existing organization.

Corporate Entrepreneurship describes entrepreneurial behavior within medium and large enterprises. Objective is to create an entrepreneurial operating innovative organization.

The term Entrepreneurship is not clearly defined in the scientific literature. It leads back to the French word “entreprendre” which means “do something” or “take something into your own hands”. Innovation and entrepreneurial opportunities characterize entrepreneurship. Entrepreneurship is an entrepreneurial process of the implementation of innovative products and production methods. The general understanding of entrepreneurship refers not only to the newness of the products, but it is based on attitude, action and the willingness of entrepreneurs to take risks. The German words “Unternehmertum” and “Unternehmer” are often used for the terms entrepreneurship and entrepreneur, but they are not identical.

Value Proposition Design is a method to design innovative products and services that exactly meet the needs and desires of the customers.

Value Proposition Canvas allow a structured presentation and visualization of value propositions and customer segments that are used as building blocks in Business Model Canvas. They consist of a Value Map and a Customer Profile.

Business Model Canvas allow a structured representation and visualization of business ideas and business models. They represent graphically the following building blocks of a business model:

1. Customer Segments
2. Value Propositions
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resources
7. Key Activities
8. Key Partnerships
9. Cost Structure

Design Techniques are methods to promote creativity and generating new ideas targeted to develop visions or solve problems. They can help to design better and more innovative business models. Design techniques are primarily used in workshops where a group of people often explores unfamiliar terrain while designing business models. Well‐known design techniques for business models are:

• Customer Insights
• Ideation
• Visual Thinking
• Prototyping
• Storytelling
• Scenarios

Design Thinking is an approach designed to solve problems and develop new ideas. It starts from the assumption that problems can be better solved if people from different disciplines work together in a creativity-boosting environment to find the optimum solution from the customer’s point of view.

The Design Thinking Process is based on the workflow of designers and consists of 6 phases:

1. Understand the challenge
2. Observe the users
3. Define a point of view
4. Find ideas
5. Develop prototypes
6. Test

The Lean Startup method is a method for the iterative search for a viable business model in several steps:

1. Founders translate ideas into business model hypotheses, test assumptions about the needs of the customers and create a minimal functional product to try out the solution to customers.
2. The company continues to test all other hypotheses and attempts to validate the interest of the customer through early orders or the use of the product. If there is no interest, the company can re‐align by changing one or more hypotheses.
3. The product will be revised to the extent that it can be sold. Based on its proven hypotheses, the company generates demand by boosting up marketing and sales quickly and expanding the company.
4. The company slowly leaves the startup mode, in which a team for customer development seeks answers, and forms functional departments for the implementation of the business model.

Open Innovation is a paradigm that assumes that firms can and should use external as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. Alternatively, it is “innovating with partners by sharing risk and sharing reward“. The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward.

The central idea behind open innovation is that, in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e. patents) from other companies. In addition, internal inventions not being used in a firm’s business should be taken outside the company (e.g. through licensing, joint ventures or spin‐offs). Open innovation offers several benefits to companies operating on a program of global collaboration:

• Reduced cost of conducting research and development.
• Potential for improvement in development productivity.
• Incorporation of customers early in the development process.
• Increase in accuracy for market research and customer targeting.
• Potential for viral marketing.

The open innovation paradigm can be interpreted to go beyond just using external sources of innovation such as customers, rival companies, and academic institutions, and can be as much a change in the use, management, and employment of intellectual property as it is in the technical and research driven generation of intellectual property.

Corporate Venturing refers to venture capital provided by industrial companies, where investors pursue not only financial but primarily strategic goals. Venture Capital refers to a temporary transfer of financial resources to companies in the form of equity shares.

Corporate Venturing can be divided into internal, cooperative and external corporate venturing. Internal Corporate Venturing refers to the financing of internal activities of the company, for example as Venture Team or Technology Accelerator. Cooperative Corporate Venturing refers to the financing of activities in cooperation with other companies, for example as Spin-Off or Joint Venture. External Corporate Venturing refers to the financing of external activities of the company, for example by investments in other companies.

Product-Service-Systems (PSS) are a marketable set of products and services capable of jointly fulfilling a customer’s needs.

The initial move to PSS was largely motivated by the need of some traditionally oriented manufacturing firms to cope with changing market forces and the recognition that services in combination with products could provide higher profits than products alone. Faced with shrinking markets and increased standardization of their products, these firms saw service income as a new path towards profits and growth.

PSS can be defined as a system of products, services, supporting networks, and infrastructure that is designed to be competitive, satisfy customers’ needs, and has a lower environmental impact than traditional business models. While not all PSS result in the reduction of material consumption, they are more widely being recognized as an important part of a firm’s environmental strategy.

PSS can be categorized by two distinguishing features: the performance orientation of the dominant revenue mechanism and the degree of integration between product and service elements.