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A dramatic example of the importance of process innovation for a product's success is mentioned in Section 1: 1.1 of this unit. What is it?
Section 1: 1.1 notes that the early ballpoint pens were on sale for approximately half the weekly wage of the time. A key contribution to this product made by Baron Bich was to develop a manufacturing process capable of reducing production costs and sales price significantly. The BIC disposable ballpoint pen now costs a few pence.
Rogers gives five characteristics of an innovation that affect how well it will sell and how quickly it will diffuse. Briefly use these characteristics to explain the rapid diffusion of the mobile phone.
Would you classify the following as examples of sustaining innovation or disruptive innovation?
(a) cordless domestic phones
(b) mobile phones
(c) Edison's electric light
(d) compact fluorescent lamps.
(a) Cordless domestic phones – largely sustaining.
Cordless domestic phones offered an improvement to the performance of existing handsets. The ending of BT's monopoly had already led to the appearance of more companies offering a variety of handsets. The arrival of cordless handsets on the market continued this process rather than launching a new wave of innovation.
(b) Mobile phones – disruptive.
The development of mobile telephones led to a new way of operating in the telecommunications market. Mobile telephony challenged existing companies to decide whether to ignore or embrace such new developments. Many new companies arose to exploit the market at the expense of existing telephone providers.
(c) Edison's electric light – disruptive.
As well as establishing a completely new industry based around the provision of ‘electric candles’ Edison's invention required the creation of systems for the delivery of electricity to homes and businesses. This in turn enabled an outlet for the invention of a wide range of products designed to make use of this delivered electricity. Entire new industries grew up around this principle, making the electric light a truly disruptive innovation.
(d) Compact fluorescent lamps – sustaining.
Compact fluorescents offered technical improvements to an existing product. They've created a new market niche rather than opening up an entirely new market.
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