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Many companies thrive during the early stages of their life cycle, only to fall slack during periods of inertia and die out while others surge ahead. But as Geoffrey Moore shows, some notable companies have figured out how to deal with ...
Many companies thrive during the early stages of their life cycle, only to fall slack during periods of inertia and die out while others surge ahead. But as Geoffrey Moore shows, some notable companies have figured out how to deal with Darwin in their mature years—making changes on the fly while fending off challenges from every quarter.
Business is becoming increasingly competitive - globalization, deregulation and commoditization have taken their toll everywhere you look. Companies are forced to innovate or fold; it's a constant pressure that goes beyond mere competition - it's about survival. Who will the survivors be? The ones that win the scarce resources of customer purchases; the ones that gain customer preference because of their innovation; the ones creating next-generation offers and raising the bar for the future. It's evolution in every sense of the word. Survival of the fittest. In this summary, bestselling author and consultant Geoffrey A. Moore puts into clear relief the fact that innovation is not an optional "nice-to-have" in business - to innovate forever is a design specification. It's no longer a strategy; it's a requirement.
The economic argument in favor of innovation focuses on pricing power - avoiding commoditization and the resulting vendor price wars brought about by consumers simply searching for the best deal. Over time in these situations, the market stabilizes at prices at or below cost, creating returns for investors below the cost of capital. Investors do not stay in marketplaces like these very long. When innovation is applied, however, offers become more and more differentiated from one another, leading to different ones becoming the preferred choice for different market segments. Vendors in those segments then have pricing power, and the markets stabilize at prices well above cost, creating returns above the cost of capital, attracting more investment.
The Economics of Innovation
In essence, when innovation creates differentiation, it creates attractive economic returns. This is not, however, the only possible outcome from innovation. In addition to differentiation, there are three other possible outcomes: neutralization, productivity improvement and waste.
Types of Innovation
To better understand the various types of innovation, Moore organizes these types into clusters. The innovation types fall into these four clusters or innovation zones: the product leadership zone, the customer intimacy zone, the operational excellence zone and the category renewal zone. Beyond these zones, innovation strategies are formed, one that gives every promise of creating the separation you need from your direct competitors, earning the customer preference your profit margins require. Now, says Moore, you must overcome the inertia of your own organization that fosters resistance to making the changes necessary to implement it.
Inertia is not the enemy of innovation, but it does resist it at the point of change. Therefore, at that very point, management must learn to deconstruct inertia in order to reconstitute it elsewhere. You must extract resources from context in order to repurpose them for core. Context includes most of the things you do to meet commitments to key stakeholders and to comply with industry laws and standards. Core is that which differentiates your company to create sustainable competitive advantage. Extracting resources from context to repurpose for core accomplishes three key objectives:
Natural selection is a game with no time-outs. It does, however, allow for unlimited substitutions. Resource recycling not only delivers efficiency; it also provides refreshment. There is respite for the weary as long as it is followed by an energized willingness to re-engage. Communities need abiding sources of employment. Customers need stable sources of supply. Governments need a vital tax base. Investors need opportunities to create attractive returns. We are all more or less strategically aligned. We are just being asked to execute at a new level of competitiveness. Copyright © 2006 Soundview Executive Book Summaries
|Preface : what this book is about and how it came to be|
|1||The economics of innovation||5|
|2||Innovation and category maturity||13|
|3||Innovation and business architecture||29|
|4||Types of innovation||61|
|5||Managing innovation in growth markets||73|
|6||Managing innovation in mature markets||110|
|7||Managing innovation in declining markets||168|
|8||Managing innovation in your enterprise||192|
|9||Extracting resources from context||209|
|10||Repurposing resources for core||235|
|11||Managing inertia in your enterprise||256|
Posted December 12, 2011
Posted February 3, 2011
All companies need some form of differentiation to grow, and this book provides a logical, step-by-step way to determine the most promising paths and executing them. Current examples are provided from Cisco, for whom the author has spent years consulting, and many other industries. An invaluable tool for anyone responsible for planning strategy of a product, division, or corporation.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted September 13, 2006
In a competitive, capitalist economy, nothing is more prized than the whiz-bang invention, the why-didn¿t-I-think-of-that product or service that defines a market, delights consumers and gushes profits. Yet for all the ink spilled over innovation, remarkably few businesspeople understand exactly how to mint revolutionary new products. Innovation expert Geoffrey A. Moore delves under the hood of the new economy to create this roadmap to creative thinking. Although the text at times bogs down in jargon and a dizzying degree of detail, he cites plenty of sharp real-world examples, including an inside view of Cisco Systems. We recommend this user¿s manual to innovation to anyone who thinks that survival is not an end goal, but just a place to get started.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted September 20, 2009
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Posted January 17, 2010
No text was provided for this review.