This book is concerned primarily with the early stages of conceptualizing new ideas that can enhance existing business models and subsequently lead to the creation of new businesses (see the following figure). The material in this book has been in development over the last 10 years in a course on technology management and development. One purpose of the course is to understand how technologies unfold and how they guide the strategic direction of contemporary business. The course involves reading and discussing over a dozen cases of a wide variety of successful, emerging, and unsuccessful businesses. The cases used in the course are usually matched to chapter topics. The case studies and class dialog coupled with the reading of the book chapters are part of the learning-about process. The learn-by-doing part of the course involves the development of a business plan for a start-up company.
The Focus of This Book Is On Early Stages of Product Development
- Concepts in the Context of Monopolistic Competition introduces the fundamental concepts related to understanding innovation, diffusion, technology life cycles, R&D, and entrepreneurship within the context of monopolistic competition. The importance of learning-about and learning-by-doing for developing innovative products and services is discussed.
- Fundamentals of Product and Price Differentiation illustrates the importance of product and price differentiation and how they relate to a consumer's willingness-to-pay and to price sensitivities. The chapter also describes first-, second-, and third-degree price discrimination strategies and how they can be implemented.
- Differentiation in Action illustrates why product differentiation and price discrimination can generate additional revenues. The chapter focuses on the use of versioning to aid in product differentiation. A spreadsheet is dashboard presented that can be used to assist in product versioning. The importance of complementary and substitute goods and their impact on revenues is also examined.
- Dynamic Tension in Versioning and PD Curves illustrates a model for constructing product differentiation curves that draws on the dynamic tension that exists between developing high-end Midas products and low-end Hermes products. The results of this dynamic tension between Midas versioning and Hermes versioning are Atlas products and services. Atlas products and services are designed for mainstream consumers.
- Examples of Product Differentiation & Versioning Curves shows a variety of product differentiation and versioning strategies that have been used by businesses. Some businesses focus on versioning at the high end, some businesses focus on price-sensitive consumers, and some businesses try to offer products across the entire demand curve.
- Facilitating Creativity and Innovation discusses the concepts of creativity and innovation. Fostering creativity and innovative activity can be accomplished by dialog and discussion, learning-about, encouragement, time, solitude, experimentation, construction, and by having a supportive environment.
- Conceptualizing Products/Services Using FAD introduces the FAD (features, attributes, and design) template. The FAD template is used to identify the features and attributes that can be used for product and service differentiation. The FAD template incorporates concepts from meaning-driven design (MDD), user-driven design (UDD), and technology-driven design (TDD) and also uses a classification scheme that can be used to ascertain whether attributes and features are increasing or declining in importance.
- Strategic Planning and Ten–Ten Planning presents a brief overview of the more popular approaches for strategic planning. This chapter also sets the stage for the Ten–Ten planning process, a simplified yet robust approach to planning that will be detailed in The Ten-Ten Planning Process: Crafting a Business Story.
- The Ten-Ten Planning Process: Crafting a Business Story details the Ten–Ten planning process. The Ten–Ten planning process contains two templates: an Organizational and Industry Analysis template and the Business Plan Overview template. The idea behind the Ten–Ten approach is that once you have gathered some background data related to the industry and the organization, you should be able to complete the two very quickly. The chapter also describes how the Business Plan Overview template and the Industry and Organizational template in conjunction with the FAD template can be used to develop an executive summary for the business plan.
- Lock-In and Revenue Growth discusses the importance of lock-in from the producer's perspective in achieving revenue goals through network effects. The chapter also highlights how buyers try to avoid lock-in in order to maintain flexibility and avoid switching costs.
- The entrepreneur, the entrepreneur's friends and family, investors, and banks are interested in how much a business is worth. Valuing the Business discusses several approaches for valuing a business and presents several examples of how they can be applied.
- Developing a Business Plan presents a detailed approach for constructing a business plan. The expanded business plan provides additional focus by adding details on the what, why, how, when, and for whom a product or service will be produced. The FAD template, the Organizational and Industry Analysis template, the Business Plan Overview template and the executive summary are used as the basis for developing a full-scale business plan. A variety of issues are also discussed including the plan format, the writing style, investors, and legal issues. This chapter also discusses how to pitch the plan to interested parties.
- Project Management for New Products and Services presents an overview of the essential tools and techniques for project management. Once the initial business model has been created, the hard work begins. In most situations, everything is new and needs to be built up from scratch. The entire supply chain has to be built and tested to insure that orders for products and services can be accepted, filled, and supported. Project management is a critical tool in the never-ending process of business growth and renewal. It allows the entrepreneur to minimize and mitigate inherent risks and increase the potential for the successful launch of the enterprise and the ensuing business renewal.
- Re-priming the Business Using Real Options Concepts is about business renewal. It does not matter how innovative or how much money the current business is making. There is a life cycle for products and technologies, and eventually the business will decline unless it can find new opportunities. This chapter focuses on how real options concepts can be used as the foundation for continually reinventing the business.
- Wrap-Up discusses the importance of being entrepreneurial in renewal. If a business does not make little and big tweaks to products and services, it will become a business footnote. The ideas presented in this book will not guarantee success, but they can be used to confront and also to ignore the competition by identifying and creating opportunities that supersede the competition.