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Published on March 30, 2008

Author: Rosalie


Box Case 1.1: Metro AG’s ‘Future Store’, Germany:  Box Case 1.1: Metro AG’s ‘Future Store’, Germany World’s fifth largest retailer joined forces with Intel and SAP to build a fully working ‘prototype’ supermarket RFID ‘smart-tag technology’ used on all products Shopping trolleys have touch screen computers and scanners Smart tags cost 0.5 Euros each and are currently too expensive for every item in very supermarket Box Case 1.2: Gillette:  Box Case 1.2: Gillette Gillette ‘Mach 3’ razor is a first-to market product Developed at a very high cost A UK supermarket chain was quickly able to produce a good copy at a fraction of the original cost Gillette have been more dependent therefore on expensive television advertising to protect sales of their product When products are easy to copy, competitors can ‘leapfrog’ original features and Wilkinson Sword Company have now introduced a 4 blade razor Photos taken from Box Case 1.3: Tetley’s Teabags:  Box Case 1.3: Tetley’s Teabags Tetley is a market leader and the originator of the round teabag Advertising was based around a better cup of tea that would result from bags where the tea could circulate better Knew that competitors would try and copy Hired consultants to develop a new manufacturing line for round teabags When new product was introduced competitors were unable to obtain similar manufacturing equipment and Tetley maintained its lead Photos taken from Box Case 1.4: Les Concierges, India:  Box Case 1.4: Les Concierges, India Targets ‘cash rich, time poor’ segment starting in Bangalore Idea is an in-company ‘help desk’ offering executives 4 categories of support: shopping everyday and special tasks entertainment travel Company philosophy is ‘High tech / High touch’ £1m and over 350 staff Box Case 1.5: Singapore Airlines:  Box Case 1.5: Singapore Airlines Voted world’s best airline in surveys by travel magazines First-to-market strategy for many years More modern aircraft offering: larger than average seating first in-flight phones and faxes Led in the introduction of electronic tickets Flexible for flight confirmations by phone, fax or email Staff receive longer and more detailed training Visit senior citizens’ homes Case Study: DoCoMo:  Case Study: DoCoMo How can partnerships and alliances help a company in the service sector achieve its innovation strategy? How can service and product strategies of different companies be aligned to target specific customers segments? How can a service provider make it harder for competitors to copy innovations? Figure 1.11: DoCoMo i-Mode Collaboration:  i-modeCollaborationConceptv2.ppt Figure 1.11: DoCoMo i-Mode Collaboration Box Case 2.1: Australian Medical Care:  Box Case 2.1: Australian Medical Care Healthcare is a major part of the service sector ARCHI supports implementation of effective and quality improvements through: seminars, publishing reports, producing case studies and communicating new ideas to healthcare professionals Treatment being improved not only by drugs and medical technology but also through suitable use of quality management techniques Culture of medical profession changing Box Case 2.2: Dutch Government Policy and R&D:  Box Case 2.2: Dutch Government Policy and R&D Many governments have used relaxation of taxation as a means to stimulate innovation In Holland, where companies deduct income tax and social security payments directly, they have been allowed to pay lower tax amounts on behalf of their R&D staff Proved popular with SMEs, who receive 60% of the budget allocated to the scheme Nearly 15,000 organizations benefited in 1999 Research has shown that both R&D expenditures and the number of R&D employees has increased Box Case 2.3: Repsol YPF, Argentina:  Box Case 2.3: Repsol YPF, Argentina Distributes natural gas to over 9 million clients in Spain and Latin America In partnership with VW, introduced the Polo CHG in 2002 Now nearly 1 million gas-powered cars on the roads Over 1000 petrol stations offering gas supplied by Repsol YPF in 205 towns and cities in Argentina Average annual saving per year = one month’s average salary Repsol YPF and VW offer a full service (inc. installation and registration) Box Case 2.4: Extricom GmbH, Germany:  Box Case 2.4: Extricom GmbH, Germany Small company near Stuttgart Competing in the ‘twin-screw extruder’ market Original twin-screw extruder developed in the 1950s Today, there are over 100 companies worldwide offering twin-screw technology Technology has largely become a commodity Margins are relatively narrow Led to the market leaders to also produce replacement parts for their competitors’ machines Extricom has developed the latest technology – 12-screw extruders – which allow materials to be processed more efficiently through improved flow dynamics Photos taken from Box Case 2.5: Dvorak versus QWERTY:  Are the best innovations always adopted? Box Case 2.5: Dvorak versus QWERTY Case Study: Richardson:  Case Study: Richardson How can successful companies avoid being trapped with one technology or product concept? How can links between the innovation strategy and new product development be made effective? How can the product concepts be selected that are most likely to be successful? Should new technologies be developed parallel to new products? Figure 2.4: Case Study: Richardson:  Core business review Mission corporate objectives Marketing audit Objectives Market penetration New product development Market extension Diversification Strategic screen List of potentials S.W.O.T analysis Technology push Blue Sky Research Customer pull Review Development Reject Hold File: Richardson1.ppt Figure 2.4: Case Study: Richardson Box Case 3.1: Boeing and Airbus:  Box Case 3.1: Boeing and Airbus Boeing and Airbus have been challenged to provide more innovative cabin designs Within the limitations of costs and space available Focus is to be on the spatial layout, i.e. more comfortable seating and cabins that give impression of space Innovation s such as luggage bins that lift out of the way provide extra space Décor, mirrors, dividing walls and lighting can all give the impression of more space Size of windows has also been found by psychologists to have a strong influence on passenger well-being Photos taken from Box Case 3.2: Dial-a-Flight:  Box Case 3.2: Dial-a-Flight Successful European Internet retailer of travel and tourism services Strategy to improve customer contact and provide customization Fast search engine, high personal contact for confirmation (‘your representative’) Employees are skilled, personable and enthusiastic about their products Box Case 3.3: Malaysia Airlines:  Box Case 3.3: Malaysia Airlines One third of the dollar value of all goods shipped globally is air freight, growth rate over 6% for next 20 years Shipments from Asia include high value electronics and perishables, e.g. seafood Prompted by the Gap Model Malaysia Airlines management conducted interviews. In-depth discussions with 19 airfreight managers revealed a total of 44 attributes of airfreight Information gained allowed them to decide on how to enhance service augmentation and how to price it Box Case 3.4: Innovating in Healthcare:  Box Case 3.4: Innovating in Healthcare In many healthcare systems, waiting times are long, staff members are overworked and drab décor is not unusual The role of the augmented service, in particular the servicescape, has been linked directly to the ‘bottom-line’ in recent research in the US Hospitals that had been decorated in pastel shades and where attractive artwork was hung on the walls were found to have a higher level of well being in their patients These departments found that dosages of self-administered painkillers were up to 45% lower, subsequently leading to significant savings Box Case 3.5: Halifax Building Society:  Box Case 3.5: Halifax Building Society Focuses on the fast development of new service products, including new lending packages for house purchasers Reduced time to develop and introduce new mortgage packages from six months to a few weeks Four main steps to development process: Concept development Trial Delivery system definition Introduction Case Study: AXA Insurance:  Case Study: AXA Insurance What sort of ideas lead to the most important innovations? Are they ‘brainwaves’ that lead to radical products or are they more pedestrian? How can the best ideas be selected? How can the nature of innovation be effectively communicated within a service organization? Figure 3.5: AXA Innovation Quadrant:  Create new customer- focused opportunities (10%) Improve existing products, services and processes (40%) Eliminate non-value adding activities (40%) Re-use AXA global success stories (10%) Figure 3.5: AXA Innovation Quadrant Box Case 4.1: Allianz Versicherung:  Box Case 4.1: Allianz Versicherung Hauspannenversicherung – House 24 hour ‘breakdown service’ Covers most important house emergencies for 4,86 EUR a month Covers up to 300,- EUR per callout Single call and qualified tradesmen will be sent out Allianz organizes the payments Developed by cross-functional, dual company team Box Case 4.2: Formule 1 Hotels, France :  Box Case 4.2: Formule 1 Hotels, France Launched in 1985, new concept for low-cost hotels Customers just wanted a good nights’ sleep Just provide basic facilities – no traditional features, e.g. lounges, eating facilities, receptionist, spacious rooms, etc Market leader in the sector Within 10 years market share exceeded that of its 5 nearest rivals combined Box Case 4.3: Fiat IVECO:  Box Case 4.3: Fiat IVECO Mass-customization has influenced many companies Fiat have designed a matrix for engineers to analyze the trade-offs between cost and customization of components in car design Compares cost of variety against the importance to the customer of variety of car components Variety that has low value is eliminated where possible Components whose variety can add high perceived value are given high priority Box Case 4.4: Betamax and VHS:  Box Case 4.4: Betamax and VHS Sony launched Betamax, the first video recorder designed for the home market, in 1975 JVC followed with the VHS a year later Sony was first-to-market but their 1-hour recording length was felt to be too short VHS offered 2 hours from the start and many major companies decided to wait for it Sony launched a 2-hour machine only 5 months after the launch of the VHS The market for VCRs grew dramatically – from around 20,000 units a year in 1975 to nearly 20M in 1983 and 40M in 1987 Sony’s sales grew until 1984 but dropped when VHS arrived JVC gave greater emphasis to signing up partners and distributors The better range of pre-recorded films in turn made VHS more popular with buyers Box Case 4.5: Hewlett-Packard:  Box Case 4.5: Hewlett-Packard When it first emerged, inkjet could not rival the quality of laser printing But it was low cost, low noise and low power consumption HP set up a separate division tasked with exploiting inkjet in whatever applications it could find Strategy paid off when the quality of inkjet printing eventually rose high enough to displace laser from much of the desktop market However, HP would still have had a profitable, if modest business, without this improvement Case Study: Domino Printing Sciences:  Case Study: Domino Printing Sciences How can companies recognize that their technological basis is facing a technical limit? Do such technological limits necessarily matter? What issues face a company adopting a new technology that fully replaces their current one? What issues face a company adopting a new technology that overcomes deficiencies of their current one but does not fully replace it? What problems may a single-technology company expect to face when it adopts new, overlapping products? Box Case 5.1: PA Consulting Group, UK:  Box Case 5.1: PA Consulting Group, UK Around 200 engineers, scientists and technicians Technical Director perceives his role as tending his ‘garden’ in which creativity can flourish ‘Creativity is a free spirit… it is an elusive subject to harness effectively into the delivery of business benefits’ Division has been responsible for a number of hugely successful product innovations for well-known companies Box Case 5.2: Equant:  Box Case 5.2: Equant Major data network provider Used repertory grid interviews to spot emerging customer needs Found that customers’ perceptions are not just based on technical measures Box Case 5.3: Clarks:  Box Case 5.3: Clarks Company planned to enter the walking boots segment Conducted ethnographic market research into both the usage of walking boots and the buying decision: “I needed to understand the buying habits, end use and expectations of our new customer” (Product Manager) Identified that potential buyers will try on only about 2-3 pairs of boots Designed the tongue of the boot so that potential buyers perceived the boots to be particularly comfortable Box Case 5.4: Micro Scooters:  Box Case 5.4: Micro Scooters The urban scooter was smash hit and continues to be popular today. Wim Obouter recognized that when he wanted to go out for a drink or a meal in the evening, it was often too far to walk but not far enough to warrant getting his bicycle out of the cellar, or to drive. He found a partner company to fund the tooling and a Japanese retail partner —with an opening order of 20,000 scooters. These sold immediately and the market grew quickly to sales of 75,000 units per week—almost an instant success. ‘the product was great but it… [needed] a strong brand to maintain a market leadership position’. With hindsight, Wim sees two issues with patents: the time required before cover is achieved and the investment needed to enforce them. Case Study: Texas Instruments:  Case Study: Texas Instruments How does the chosen innovation strategy impact the management of ideas? If end users do not understand the technology, how can they generate useful inputs for product designers? How can managers match market trends to technological advances? How can customers be encouraged to give ideas that are not simply based on improving current functionality? Box Case 6.1: The World Bank:  Box Case 6.1: The World Bank Aim is to alleviate poverty. Used to avoid funding anything with a high risk, decision process was slow Now project selections projects in the way venture capitalists make funding decisions Spread risks , not ‘just going for the big one’ Initial funding is now available for the first stages Subsequent financing is dependent on defined results being achieved in a set timeframe Experimenting more and running pilot programmes to test radical ideas Range of ‘products’ being considered and the selection process is transparent – ‘Innovation Fair’ Decisions made by panel of judges drawn from industry and a variety of non-profit organizations Source: Chapman Wood and Hamel, 2002. Box Case 6.2: Zara:  Box Case 6.2: Zara Spanish fashion retailer - major part of the Inditex Group 90% of goods made in own factories in northern Spain and Portugal transported to over 600 stores in 30 countries 15% return on sales – 5 times the typical level in the sector – and still growing strongly Described as “possibly the most innovative and devastating retailer in the world” Key to Zara’s success is the speed with which it can get new designs to market – 2-3 weeks, the norm in the sector being 5-10 months Box Case 6.3: Laserco:  Box Case 6.3: Laserco A manufacturer of laser systems based in the US and Germany It was clear that managers in the two parts of the company had different tolerances of risk. The two teams also tended to emphasize different aspects of the market, the Americans being more used to seeking high volume opportunities while the Germans tended to pursue applications with lower volume but higher margins. we discussed the facts of each project and then scored them individually. Then we discussed the scores. At the end we recorded the range of each score as well as the mean. People felt much more comfortable not trying to force a consensus’. Box Case 6.4: Agilent Technologies:  Box Case 6.4: Agilent Technologies Financial controlling took wider role: champions and drives the portfolio for maximum return Became a ‘business partner’ Developed portfolio tools and techniques (e.g. scoring for attractiveness/risk diagrams) with top management “The value is in the discussion and less in the absolute value of the scores” Senior managers all measured on the performance of the whole portfolio (not just, for example, R&D progress) “Team learnt to have the courage to say ‘no’” Box Case 6.5: Fruit of the Loom:  Box Case 6.5: Fruit of the Loom Used a bubble diagram to summarize all of the process innovation projects within the company Process innovation portfolio management has been very successful for Fruit of the Loom Case Study: Britannia Building Society:  Case Study: Britannia Building Society What difficulties face a company trying to create an innovation culture? Can innovation be imported into an organization from outside or must it grow from within? How does innovation management differ in service and manufacturing enterprises? What criteria are appropriate for evaluating projects in the service sector? Figure 6.15: Britannia’s Project Scoring System:  Figure 6.15: Britannia’s Project Scoring System Box Case 7.1: NZ DoC, New Zealand:  Box Case 7.1: NZ DoC, New Zealand Invasions of rats from overseas on many south Pacific islands killing indigenous birds NZ DoC looked at eliminating rodents entirely (‘impossible…’) - the ‘Pest Eradication Programme: Restoring the Dawn Chorus’ Development of new poisons and experiments on small islands to eliminate a single rodent Moved to larger and more complex islands and multiple species 13 species of rodent had been eradicated from 60 islands by 1990 ; 20 by 2001 Other countries are now copying the DoC’s success Key success factors? Box Case 7.2: Pizza Hut:  Box Case 7.2: Pizza Hut 7-stage NPD process called the FRPP – the ‘Field Ready Product Process’ Defines the steps that are necessary to develop the recipe, select suppliers, test ‘manufacturability’ and ensure positive customer reactions Ensures that employees are adequately trained on the new product before its release Essential to have a reliable but flexible NPD process Key success factors? Box Case 7.3: Organon:  Box Case 7.3: Organon Organon creates, produces and markets prescription drugs mainly for reproductive medicine, psychiatry and anaesthesia. The main risks related to the uncertain demand for pharmaceuticals are over- capacity and lost sales. Organon product launch plans include different sales scenarios: best, expected, and worst cases. Based on these sales scenarios, a number of supply chain design options are prepared. Each supply chain design option is quantitatively evaluated on 5 criteria: finance, risk, available resources, flexibility to scale production up and down, and the confidence in the assumptions. It is important not only to have an excellent product but also to match it with the best supply chain design. Box Case 7.4: Bank of America:  Box Case 7.4: Bank of America Bank of America realized that testing new services and delivery mechanisms is just as important as physical prototypes for tangible products. 20 test branches were equipped with new systems and the staff received training on the test services that would be offered. Staff members are normally paid on a commission basis and so they found that their incomes were dropping significantly because of the time that they spent on new services. This was solved by putting the staff on a fixed salary It shows that the motivation of employees can be a key consideration in the design of new service products. Box Case 7.5: Fiat Iveco:  Box Case 7.5: Fiat Iveco Box Case 7.6: Cruise Liners:  Box Case 7.6: Cruise Liners World cruise business is 8 million guests per year, approx 150 cruise liners sailing the world’s oceans Typical guest spends $2,500 for 7 nights New concepts often encounter problems (e.g. Cunard) Safety deposit boxes missing Lack of drawer space in staterooms Lack of drinks stations in “Food Court” slowed the service Waste outlets and air inlets Blueprints discussed Case Study: Wipro Technologies:  Case Study: Wipro Technologies What are the issues when new product development is conducted at multiple sites? How can these issues be addressed? How can the product development process be optimized through learning from each project? What should companies do to stimulate learning that is not just related to specific new product development projects? Box Case 8.1: United Parcel Service – Culture and Innovation:  Box Case 8.1: United Parcel Service – Culture and Innovation One of 16 Fortune 100 companies from 1900, 350,000 employees Culture perceived as ‘myths, rituals, language, ideas, goals and values Policy Book and Code of Business Conduct documentation First logistics company to experiment with air freight (in 1925) Focus on cost-effective package shipping led them to trail Fedex Now offer choice of services (options on delivery and price) Box Case 8.2: Texas Instruments:  Box Case 8.2: Texas Instruments There can be a downside to inventiveness if it becomes the strongest component of R&D culture - it can lead to the proverbial reinvention of the wheel. R&D engineers do not always need to start from scratch. Unfortunately the not invented here (NIH) syndrome, where researchers do not adopt or adapt existing ideas, instead insisting on developing their own original solutions, wastes resources. Texas Instruments (TI), the developer and manufacturer of integrated circuits, has taken steps to avoid NIH as part of their ‘Vision 2005’ initiative. This includes an annual ‘NIHBWDIA prize’ for the R&D employee who takes an idea from somewhere else and makes a significant contribution to product or process innovation Box Case 8.3: QB Shell, Japan:  Box Case 8.3: QB Shell, Japan Hairdressing chain in Asia Addressed ‘time poor’ segment ‘Process flow’ analysis conducted and service augmentation optimized: Ergonomic shells No payments Waiting lights Locations Major success Box Case 8.4: 3M:  Box Case 8.4: 3M There are three levels at which 3M has taken steps to stimulate more innovation: at the company, team and individual level. At the company level these goals were 30 per cent of revenues must be from products less than four years old and ten per cent from products less than one year. ‘Action Teams’ were introduced for NPD. 3M found that not only the Action Teams needed training but also top management needed coaching to ‘back off’ and really empower the team. At the individual level, 3M have taken steps to promote and reward innovation. The rule that development people can spend up to 15 per cent of their time on investigating their personal ideas is almost as famous as the Post-it. Box Case 8.5: Lockheed:  Box Case 8.5: Lockheed Sometimes large organizations can stifle innovation through their control systems and routines. Mimicking the advantages of a small start-up is a popular approach that is normally referred to as starting a skunk works. The original skunk works was created to accelerate the design of a new jet fighter in 1943. Lockheed assigned a team of 23 engineers to the project and freed them from the bureaucracy and the official R&D process. The results for Lockheed were dramatic; the ‘Shooting Star’ jet was designed in 43 days and was the first American-designed aircraft to exceed 500 miles per hour. Box Case 8.6: Fischer GmbH:  Box Case 8.6: Fischer GmbH Manufacturer of industrial fixing devices based in southern Germany The company has a tradition of innovation—it has filed hundreds of patents—and so there has always been a strong focus on R&D generating ideas for new products. Employees’ contributions to innovation are assessed in annual appraisals using a 1-5 scale. Although the rating is subjective, it stimulates discussion between employees and management about innovation. Box Case 8.7: Zenith Electronics:  Box Case 8.7: Zenith Electronics The US-based Zenith Electronics Corporation normally used ‘after the event’ awards, given to teams or individuals for top performance. A multi-million dollar contract with a heavy delivery time penalty clause led to a new approach. It was decided to create a ‘share scheme’ for the project with a sum of several hundred thousand dollars reserved for rewarding the large team Dedicated team members were allocated 200 shares and part-timers received 50. The initial value of the shares was zero but the successful achievement of each milestone and quality target, led to set increases in the share value, whereas each day of delay would lead to a defined loss in share value. Zenith has recognized the need to regularly update their reward system. Box Case 9.1: Evotec OAI:  Box Case 9.1: Evotec OAI Leading provider of biological, chemical and screening services, 600 employees Clients include BASF, GlaxoSmithKline, Pfizer and Roche 5 years ago OAI conducted an innovation audit: Interviews held with all functions and levels Results were revealing: staff rated OAI low on creativity; innovation was not perceived as customer-led; knowledge not optimally applied; not enough communication between the two divisions; clearer rewards needed Audit showed that management and employees viewed potential for innovation differently. Management quickly set about making some significant changes Box Case 9.2: Cobra, Thailand:  Box Case 9.2: Cobra, Thailand Based in Chonburi in Thailand, founded in 1985. Manufacturer of windsurf and surfboards and a range of other items for recreational sports. Cobra is constantly developing the ‘combination of methodologies and materials’ says Pierre Olivier Schnerb, Vice President of Technology. ‘For example, Cobra Tuflite technology applies techniques learnt from windsurfing to surfing’. The employees’ have intimate knowledge of the sports for which they manufacture equipment. In order to stay innovative, employees are given the power to create, experiment, and decide. Box Case 9.3: Fiat Iveco:  Box Case 9.3: Fiat Iveco Massimo Fumarola says, ‘in my opinion there are three challenges in managing innovation. one has to do with the organization and there is a dilemma. On the one hand we want employees to work in structured, methodical ways to produce products in a timely, in fact a very disciplined way. On the other hand, we want people to challenge the established ways of thinking and working. Getting enough people with the right experience is something we need to work on. Thirdly, it’s about getting everyone involved. Box Case 9.4: Synectics:  Box Case 9.4: Synectics Leading innovation management consultancy, founded in 1960 Founders taped thousands of hours of new product development meetings and analysed how people interacted Tools and techniques were developed for generating creative product ideas: ‘springboards’ – generating thoughts that lead to new thinking ‘excursions’ – process to enable the power of the subconscious to be released onto a problem ‘itemized response’ – process for protecting ideas These techniques have been applied in a diverse range of companies. Key successes include: helping Liptons turn iced tea from a summer product to a popular year-round drink improving the logistics processes for a major shipping line Case Study: Sidler GmbH & Co:  Case Study: Sidler GmbH & Co What roles can outsourcing play in a company’s innovation strategy? What criteria should be used for selecting partners? How can confidentiality be managed for innovation projects involving interorganizational collaborations? Box Case 10.1: Automotive:  Box Case 10.1: Automotive The concept is to assemble cars in retail parks from kits shipped in from low-cost manufacturers in India or China. By using plastic panels the company would be able to customise the vehicles to a high degree so as to be able to follow fashions. Crucially, the vehicles would be leased, not sold, so that returned cars could be refurbished and leased again at a reduced rate. Since there would be no second hand market, theft would be little or no problem (why would you steal a car that cannot be resold?) so insurance would be cheap. Box Case 10.2: The lotus effect:  Box Case 10.2: The lotus effect Biologists from the University of Bonn in Germany investigated the ‘lotus effect’, the apparently smooth leaves of this plant repel water and almost all dirt and grime. Nanotechnology has now enabled this surface to be mimicked and ‘easy-to-clean’ products are now entering the marketplace these include coatings for bathroom ceramics, paint for walls, and coatings for surgical devices. Easy-to-clean technology promises to save time. Box Case 10.3: Vodafone Group Plc:  Box Case 10.3: Vodafone Group Plc World’s largest mobile telecomm company with 146 million customers Group R&D consists of 7 research and development centres around the world German centre in Munich has 34 permanent employees, 20 contract staff and 20 students Analyze trends, new technologies, build visions, monitor ‘players’ and track the business environment to derive ideas for tomorrow’s competitive products and services Present ideas at the Annual Conference attended by 150 Chief Technology Officers and Strategy Directors worldwide Box Case 10.4: The Jaipur Foot:  Box Case 10.4: The Jaipur Foot Bio-medical engineers have long studied the workings of the body and designed artificial limbs, some of which incorporate microprocessors. It is estimated that 500 people per day are killed or lose a limb as a result of land mines However, these civilians do not have the money or access to the high-tech devices The Jaipur Foot is the solution and it is made of simple materials – rubber, wood and aluminum - which are not only readily available but also can be worked by local craftsmen. Typically it takes 45 minutes to build, lasts five years and costs about $30. Box Case 10.5: Microsoft:  Box Case 10.5: Microsoft Microsoft had little competence in the design of many of the key elements that go to make up a games console. For a successful entry into this established and competitive market Microsoft would have to assemble a coalition of suppliers, whose work would make or break the project. Microsoft had one technical card to play: a suite of software called Direct X that made it easy to write games. Microsoft now provides only the business and design concept, the finance, the styling, and the core operating software .All the key components and the manufacturing were subcontracted. The X Box was launched in November 2001, by mid 2004 they had sold 14 million units Source: Takahashi, 2002. Case Study: Hewlett-Packard BITS:  Case Study: Hewlett-Packard BITS What will be the challenges in the future in managing innovation? Which aspects of the customer relationship are essential to a business model? What are the key differences between managing innovation in small and large organizations?

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