Unit 2

Topic Innovation Strategies/Models

Innovation models provide structured frameworks that organisations use to
develop, test, and implement new ideas. Each model has a unique approach suited
for different types of innovation, helping businesses minimize risks, optimize
resources, and improve market success.
Below is a detailed overview of key innovation models:

I. Lean Startup Model

The Lean Startup Model was developed to address the challenges startups face
when launching new products, but its principles have since been adopted by
organisations of all sizes. The core idea is to minimize wasted effort by testing
product assumptions quickly and iteratively.
Key Components:
a) Minimum Viable Product (MVP): Rather than fully developing a product
from the start, companies launch a basic version that captures the
essential features. This MVP is used to validate the market need.
b) Build-Measure-Learn Cycle: The process involves building a simple
product, measuring user interactions and feedback, and learning from
these observations to improve the product.
c) Pivot or Persevere: Based on feedback, companies decide whether to
change the direction (pivot) or continue refining their existing idea.
Example in Action:
• Dropbox began with an MVP in the form of an explainer video that
demonstrated its file-sharing concept. The strong positive response helped
validate the product concept, guiding further development and inv
Implementation Benefits:
• Speed to Market: Quickly validate ideas, reducing the time to market.
• Cost Efficiency: Save resources by avoiding full-scale product development
until the concept is proven.
• Customer-Centric Development: Direct feedback ensures that the final
product better meets customer needs.
II. Stage-Gate Model
The Stage-Gate Model provides a structured framework that divides the innovation
process into clear stages, with decision points (gates) where progress is evaluated.
Key Components:
a) Stages: These are phases such as idea generation, concept development,
feasibility studies, development, testing, and launch.
b) Gates: At each gate, decision-makers review progress against set criteria
(technical feasibility, market potential, financial viability) before allowing the
project to continue.

Example in Action:
a) Procter & Gamble leverages this model to systematically filter ideas
through various stages, ensuring that only projects with strong potential
receive full-scale development and resources.

Implementation Benefits:
a) Risk Mitigation: Regular checkpoints help identify potential issues early,
reducing the risk of major failures.
b) Resource Optimisation: Focus resources on the most promising projects.
c) Increased Accountability: Clear metrics and milestones ensure that
projects remain aligned with strategic goals.
III. Design Thinking
Design Thinking is a user-centric approach to innovation that focuses on
understanding user needs, defining problems, ideating solutions, prototyping, and
testing. This iterative process emphasises empathy and creativity, aiming to
develop products and services that truly resonate with users.
Key Components:
➢ Empathise: Engage with users to understand their experiences and
challenges.
➢ Define: Clearly articulate the problem based on user insights.
➢ Ideate: Brainstorm a range of creative solutions.
➢ Prototype: Develop low-cost, simple prototypes to test ideas.
➢ Test: Solicit user feedback to refine solutions.

Example in Action:
➢ IDEO [https://www.ideo.com/offers] is renowned for using Design Thinking
to develop innovative products by deeply involving users throughout the
creative process, ensuring that the final solutions are both innovative and
highly relevant to user needs.
➢ Airbnb: Airbnb disrupted the traditional hotel industry by applying Design
Thinking principles to create a platform that connects travellers with unique
accommodations worldwide. It conducted in-depth user research by
staying in their own listings and collecting feedback from both hosts and
guests. This empathetic approach allowed them to design a platform that
 not only met the needs of travellers but also empowered hosts to provide
personalized experiences, as highlighted in several Design Thinking Books
on user-centered design. Airbnb's intuitive website and mobile app
interface, along with its robust review and rating system, instil trust and
transparency, making users feel comfortable choosing from a vast array of
properties.
➢ Netflix: Netflix, the global streaming giant, has revolutionised the way
people consume entertainment content. What sets Netflix apart is its
commitment to understanding its audience on a profound level.
Netflix recognised that its success hinged on offering a personalised,
enjoyable viewing experience. Through meticulous user research, data
analysis, and a culture of innovation, Netflix constantly evolves its platform.

Implementation Benefits:
a) Enhanced Innovation: By centering on the user, companies can create
more meaningful and differentiated products.
b) Rapid Iteration: Quick prototyping and testing cycles allow for agile
adjustments based on real-world feedback.
c) Cross-Functional Collaboration: Encourages diverse teams to work
together, bringing multiple perspectives to the problem-solving process.

IV. Open Innovation Model

The Open Innovation Model encourages organizations to collaborate with external
sources—such as customers, startups, and research institutions—rather than
relying solely on internal resources.
Key Components:
a) External Collaboration: Engaging with partners outside the organisation to
gather new ideas, technologies, and perspectives.
b) Technology Scouting: Systematically seeking out emerging technologies
that can be integrated into new products or processes.
c) Trend Management: Continuously monitoring market trends and
consumer behavior to adapt to changing conditions.
 Example in Action:
a) P&G: P&G’s open innovation with external partners culminates in their
Connect+Develop website. Through this platform, P&G communicates
their needs to innovators that can access detailed information related to
specific needs and submit their ideas to the site. P&G recruits solutions
for various problems all the time. Connect+Develop has generated
multiple partnerships and produced relevant products.
b) Hewlett Packard: It has developed labs where open innovation thrives.
It has created an open innovation team that links collaborators that are
researchers and entrepreneurs in business, government and academia,
to come up with innovative solutions to hard problems with a goal of
developing breakthrough technologies
c) Telegram: Telegram is a messenger application that works on computers
and smartphones very much like WhatsApp. However, what makes
Telegram different is how much users can contribute to its content
openly. Users with any developing skills can create their stickers and
bots on the Telegram platform. Telegram also promotes the best stickers
updating an in-app list of the trending stickers.

Implementation Benefits:
➢ Diverse Perspectives: External input can provide fresh ideas and help
overcome internal biases.
➢ Faster Innovation Cycles: Tapping into existing external research and
development can accelerate time-to-market.
➢ Cost Reduction: Sharing the innovation process with external partners can
lower development costs and spread risks.

5. Blue Ocean Strategy

Blue Ocean Strategy is about venturing into uncharted market spaces where
competition is minimal or non-existent, rather than battling competitors in
crowded markets.
Key Components:
➢ Market Reconstruction: Identify and create new market spaces by
 redefining the boundaries of an existing industry.
➢ Value Innovation: Focus on both differentiation and cost reduction to
open up new demand.
➢ Targeting Non-Customers: Instead of fighting over a slice of the existing
market, identify and attract non-customers who are currently
underserved.
Example in Action:
a) PayTm created a new market in India by providing a convenient and
accessible way to pay for goods and services via mobile phone. Before
PayTm the concept of digital and mobile payments was fairly non-existent
or ill-adopted.
b) Byju's (EdTech Sector): BYJU'S first entered India's test preparation
industry in 2007 with technology-enabled learning, when the market
was uncontested, allowing the company to grow steadily until 2015.
Prior to Byju's rise, the Indian education system was heavily reliant on
traditional, classroom-based learning. Students faced significant
challenges in terms of limited access to quality teaching resources,
particularly in rural areas. By offering a unique, engaging, and
personalized learning experience using mobile apps and tablets, Byju's
tapped into the vast untapped demand for high-quality education in a
market where traditional systems were not meeting the diverse needs
of the population. From 2007 to 2015, BYJU'S was creating high levels
of value and innovation, before switching to a growth strategy of rapid
and numerous acquisitions, leading to cash crunches and financial and
innovation challenges.

Implementation Benefits:
➢ New Revenue Streams: By creating a blue ocean, companies can unlock
untapped markets and diversify revenue sources.
➢ Competitive Advantage: Reducing the focus on traditional competitors
allows companies to innovate without the pressure of immediate
competitive response.
 ➢ Sustainable Growth: Unique market spaces often offer more sustainable,
long-term growth opportunities.

6. TRIZ (Theory of Inventive Problem Solving)

TRIZ is a methodology that draws on patterns of invention across various
industries to solve complex problems. It is based on the idea that innovation
follows certain universal principles that can be applied systematically.
Key Components:
a) Contradiction Resolution: TRIZ helps identify and resolve contradictions
that typically hinder innovation.
b) Pattern Recognition: By analyzing thousands of patents, TRIZ extracts
common patterns and inventive principles.
c) Systematic Problem Solving: Instead of random brainstorming, TRIZ
offers a structured approach to generating inventive solutions.
Example in Action:
a) Tata Motors faced a significant challenge when developing a new
generation of electric vehicles (EVs). The automotive industry was
undergoing a major transformation, and Tata Motors wanted to innovate by
creating an affordable, efficient, and sustainable EV. The company’s
engineers were tasked with designing a car with long battery life, superior
performance, and reduced costs for manufacturing—all while keeping it
eco-friendly. With the help of TRIZ principles, Tata Motors launched the
Nexon EV, successfully addressing these technical contradictions, making it
affordable, efficient, and competitive in the Indian market. The vehicle
became a leader in the electric vehicle segment in India, demonstrating the
effectiveness of TRIZ in solving complex automotive design problems.

Implementation Benefits:
a) Systematic Approach: Provides a structured framework for tackling
complex problems.
b) Enhanced Creativity: Encourages thinking beyond traditional solutions by
leveraging universal inventive principles.
c) Cross-Industry Learning: Insights derived from various industries can be
applied to generate breakthrough innovations.