Block 1.

Basics of the Business Innovation Strategy

Unit 1

Innovation Management

Strategic-Technological
Analysis of Innovation
Index
Key Ideas 3
1.1. Introduction and Objectives 3
1.2. Innovation, Technology and Competitive
Disruption. Incremental vs Disruptive Innovation 3
1.3. Essential Theoretical Frameworks for Innovation
Analysis: Value Chain, Porter's Five Forces 5
1.4. The Competitive Paradigm Model 11
1.5. Business Life Cycle Analysis 13
1.6. Technology Analysis Models. The Gartner Hype
Cycle Model 17
1.7. Technological Convergence and its Implication in
Innovation (Exponential Technologies, Exponential
Organizations) 21
1.8. Bibliographical References 31

In Depth 33

Test 34
 Key Ideas

1.1. Introduction and Objectives

In this unit we will introduce the key concepts related to the theory of innovation
strategy and familiarize ourselves with the terminology, the analysis methodology
and the relationship between strategy, innovation, and technology. We will also
cover the concepts of exponential organization and technology to explain adaptation.

 To introduce the essential theoretical frameworks related to innovation strategy:

competitive paradigm, business life cycle, business value chain, competitive
disruption.
 To approach the concept of technology as an enabler of competitive disruption
and innovation, monitoring its evolution through specific methodologies (Gartner
Hype Cycle).
 To understand the way in which companies and agents in competition adapt to
the new competitive factors caused by an environment of constant innovation and
competitive disruption.

1.2. Innovation, Technology and Competitive

Disruption. Incremental vs Disruptive Innovation

A given industry undergoes a disruption process when there is a profound change in

the existing rules of competition, caused by the emergence of a new type of business
model that uses one or more new technologies or, failing that, existing technologies
that had not previously been applied in that industry (Christensen, 2011). Any
disruption, therefore, always has a basis in technology. In section “The Competitive

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 Paradigm Model” we will learn how to identify disruption using the competitive
paradigm method.

Starting from the concept of disruption, we will speak of disruptive innovation as

that type of innovation capable of causing a disruption in the industry in which it is
applied, and of disruptive technology as that which, in a general way, has the
potential capacity to be used to convey disruptions (Mc Grath, 2019). As explained in
sprint 1.1 of the digital transformation project, disruptive technologies have a
transformational impact on organizations. Several such technologies have been
identified. In Workshop 3 of sprint 1.1 you can review five current technology trends
that you can easily associate with disruptive technologies.

We can also say that not all technologies or innovations have disruptive potential or
objectives. There is, therefore, a type of innovation called incremental innovation
that aims to optimize the current competitive paradigm (see point “The Competitive
Paradigm Model”), and therefore the current customer-product/service solution.

Table 1. Characteristics of incremental and disruptive innovation. Source: Created by the author based on Porter, M.,
1987.

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1.3. Essential Theoretical Frameworks for
Innovation Analysis: Value Chain, Porter's Five
Forces

Business Value Chain

A business value is defined as the sequence of all the agents that intervene in it and
add value to the products and services found in between. It is important to
differentiate it from the concept of the company's value chain, an analytical model
that seeks to identify the internal activities responsible for generating profit for the
company.
The value chain is an essential concept in competitive strategy for several reasons:

 It increases understanding of how an industry is structured based on the

characteristics of its different agents.
 It expands the idea of competitiveness beyond the boundaries of the company by
looking at the different types of agents that interact in the creation of open value
ecosystems.
 It is the framework on which analysis methodologies are applied, such as Porter's
five forces model, the business life cycle or the Competitive Paradigm model,
among others.

The value chain is constructed on the basis of the identification of agents (e.g.,
suppliers) and not of business functions (e.g., marketing), since the latter form is
misleading (most of the competing agents perform marketing functions, for
example). Within a value chain, we can distinguish between the so-called central part
and that of the frontier agents.

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 Central value chain: typically formed by the sequence suppliers-producers-
distributors-customers. Depending on the type of industry, each of these
categories will have a specific nomenclature and characteristics (for example, in
the smartphone industry, the application developer is a type of supplier), just as
there may be different types of agents in each category (various types of
distribution channels, online/offline, direct/indirect, for example, or various levels
of customers).

 Frontier agents (or external agents): categories of agents that influence the
competitiveness of an industry, despite not strictly fitting into any of the previous
categories, and without being native to that industry. Some examples are
(governmental or private) regulators in industries with specific legislation (e.g.,
pharmaceuticals, car insurance) or financial institutions in industries with constant
and high capital needs (e.g., banks or venture capitalists).

Figure 1. Industry Value Chain Source: Compiled by the author based on Porter, M., 1987.

Porter's Five Forces

One of the most widely used tools to analyze the business environment is Porter's
five forces model. In this model, the attractiveness of an industry and the
opportunities and threats to a company are identified by analyzing five forces.

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 Figure 2. Porter's competitive forces model. Source: Porter, M., 1987.

Although it was originally developed to determine the attractiveness of an industry,

in practice it is used to evaluate the key factors that a company must consider in order
to compete in that industry. This approach is most useful for the strategic design
process of the company.

First force: threat of new entrants

New entrants are defined as companies outside the industry with an interest in
starting operations in the sector.

The entry of new companies into the sector represents a threat to all those that are
already competing in it and, therefore, they are the first to implement mechanisms
to prevent the incorporation of others. These measures that limit the incorporation
of new companies are called entry barriers. Among The main ones, we can point out
the following:

 Retaliation by companies already established in the sector.

 Reinforcement of brand image, reputation and prestige.

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 Protection of knowledge and possible imitations through patent applications and
licenses.
 Control of distribution channels.
 Leveraging of:
• The existence of economies of scale. Reduction of costs associated with large
production volumes.
• Privileged access to raw materials.
• Experience or learning effect.
• Economies of scope.

The severity of the retaliatory measures to be adopted by the companies installed in

the sector depend on factors such as:

 History of previous retaliation.

 The resources available to these companies.
 The growth of the sector.
 Sector exit costs: associated with the so-called "sector exit barriers", they refer to
the economic, strategic or emotional factors that cause the company to remain
in a sector. These can arise from:
• The existence of specialized assets (facilities, machinery, etc.) that are not
useful for other activities and sectors, so their value in the market would be
very low.
• The existence of political and social barriers: social cost associated with their
elimination.
• Emotional barriers: the sector is associated with the origin of the company.
• Strategic interrelationships: image and prestige.

Second force: threat of substitute products

This refers to the analysis of whether or not there are products on the market that
satisfy the same requirements as those offered by the company.

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The threat posed by substitute products on the attractiveness of a sector depends on
several factors:

 Price of the substitute products.

 Ease and propensity of consumers to switch products.
 Level of usefulness of the substitute for consumers.

Third force: internal rivalry between the companies installed in the sector.

This force analyzes the direct competition between the companies in the sector. The
intensity of competition between firms will be greater or lesser depending on:

 The structure of the sector: number and size of installed companies, whereby:
• If there are many or few companies, but they are balanced, the rivalry between
them will be very high.
• If there is a leader and a small group of other companies, rivalry will be low.

Growth of the sector: an expanding sector does not generate rivalry since companies
do not need to compete violently with each other to attract customers. In a stable or
declining industry, there will be fierce rivalry among the companies operating in the
industry to attract the customers of the other companies.

Fourth and Fifth Strengths: Bargaining Power of Customers and Suppliers.

These forces analyze the level of influence of suppliers and consumers on industry
pricing.

Customers and suppliers negotiate with the company for a share of the profit margin.
Higher performance in the supplier and customer sectors will translate into lower
profits for the companies in the sector. What is the basis for setting intermediate
prices? The answer is: the bargaining power of the parties involved.

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Among the factors that influence and condition a high bargaining power for a buyer
(customer) we can find the following circumstances:

When the company is unique to the supplier, i.e., the orders of the company
represent most of the sales volume for the supplier.
When the product is highly standardized.
When the cost of changing supplier is very low.
When the buyer knows the supplier's sector well.
When companies operating in the sector have the capacity for backward vertical
integration (upstream).

Stakeholder Analysis

The stakeholders of a company include shareholders, employees, customers,

suppliers, financial institutions, local community, government and competitors.
Stakeholder models are typically used for the following purposes:

 Strategic: they emphasize managerial issues that affect the bottom line of the
company.
 Normative: they stress the moral or ethical implications of managerial decisions.

Normally the first step in stakeholder analysis is to identify all parties that will be
affected by the behavior of the company. For each of them, the company identifies
what their interests are, what resources they contribute to the organization, and
what their claims are.

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1.4. The Competitive Paradigm Model

The theoretical framework of the competitive paradigm establishes the requirements

for identifying disruption in an industry based on the changes proposed by a new
competitive model (e.g., the emergence of streaming platforms concerning the
audiovisual or music sector, that of the smartphone ecosystem concerning the
conventional cell phone sector, the digital video game model in relation to the
traditional children's toys sector, and so on). We define the competitive paradigm of
an industry as the way in which the industry competes in each time frame: the
competitive rules of the industry, in other words. A disruption represents a breach of
the rules of competition, and thus of the competitive paradigm of the industry.

The concept of competition rules is multidimensional (it cannot be explained based

on a number, or a single criterion), and therefore the competitive paradigm is divided
into four competitive dimensions that must be analyzed separately to assess whether
or not a disruption exists. To be considered as such, the new competitive model must
represent a disruption in each of the four dimensions of the competitive paradigm
prevailing at the time. To facilitate the analysis, each of these dimensions consists of
a series of guiding elements whose changes must be verified.

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 Figure 3. The four dimensions of the competitive paradigm. Source: Compiled by the author based on Sansó,
2014.

Table 2. Application of the competitive paradigm analysis methodology. Source: Compiled by the author based
on Sansó, 2013.

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1.5. Business Life Cycle Analysis

Just as technology has the capacity to change the rules of competition inherent to an
industry at a given moment (competitive disruption, as we have seen in section 1.2),
it also conditions the evolution of the life cycle of the business generated within this
industry in four distinct phases. Before differentiating the characteristics of each
phase, let us pause to reflect on the importance of identifying them. Indeed, a correct
identification of the phase of the life cycle in which a given business finds itself
enables us to:

 Understand the competitive dynamics taking place within the business, and
therefore the strategies being developed by the different competing agents.
 Adapt the corporate strategy and objectives according to the competitive
requirements, the will of the company and the existing possibilities.
 Understand the role of the key technologies that are determining the evolution of
the business in its different phases, adapting the competitive strategy to the
possibilities they offer according to the objectives of the company and their
degree of maturity.

The description of the phases of the life cycle must be made from a strategic
perspective, combining quantitative and qualitative data, and based on the analysis
of four factors:

 The aggregate sales volume of the business, either in units or in economic value
(e.g., 2.2 million electric cars were sold in 2019). This data is much more interesting
from a comparative and dynamic perspective (e.g., 2.2 million electric cars were
sold in 2019, up by 18 % compared to 2018. The average annual business growth
has been 57 % since 2011. The 2019 market share of the electric car business in
the overall automotive business was 3 %).

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 Cost structures of competing players. It is important to understand the type of
costs (fixed/variable, direct/indirect) and the degree of control over the cost
structure of the agents in competition (stability and margin control). To this end,
a good strategy is to analyze the economic data of the agents representing the
different stages of the business value chain (e.g., the gross margin of Tesla has
ranged from 17.6% to 27.6 %, with a strong component of R&D and production
costs, compared to a traditional competitor such as Toyota).

 Competitors. Here we try to characterize the number and type of competitors

(research centers, startups, consolidated companies), as well as the concentration
or fragmentation movements that have occurred in recent times (for example, the
number of automotive companies that include electric cars in their portfolio has
increased by 300 % in the last 3 years, and competitors are now no longer only
startups, but consolidated companies).

 Competitive approach. What are competing players trying to do (on each stage of
the value chain)? Example: Can we identify processes of vertical integration,
struggle for standardization of production processes, for control of distribution,
for increasing market share, for technological development, etc.? There are many
options for competitive approaches, but the vast majority are limited to a specific
phase in the life cycle of a business (for example, supplier consolidation usually
occurs at the beginning of the maturity phase, price competition usually occurs in
phases of advanced maturity or decline, basic research usually occurs in very early
stages).

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 Figure 4. Stages of the business life cycle. Source: Compiled by the author based on Sansó, 2013.

Figure 4 depicts the curve with the four classic phases of the life cycle of a business,
namely: introduction, growth, maturity, and decline. The S-curve marks the
progressive flattening and subsequent decline of the aggregate sales of the business
after initial phases of very aggressive growth. Table 3 describes the different stages
according to the factors specified above.

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Table 3. Characterization of the different phases of the life cycle of a business. Source: Compiled by
the author based on Sansó, 2013.

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1.6. Technology Analysis Models. The Gartner
Hype Cycle Model

The hype cycle model by Gartner (one of the world's largest technology consulting
firms) provides insight into the relative maturity of one or more technologies. It
provides not only a benchmark for separating reality from expectations, but also a
model that helps companies understand when they should decide to adopt a new
technology, since business decisions often depend on a solid understanding of the
maturity and evolution of technologies. There are many ways to acquire this
understanding (e.g., using the S-performance curve, or adoption curve models, Figure
5). However, the Gartner model only provides information on the premature stages
of the life cycle of a given technology and not on its evolution once the early maturity
phase has been reached. Detailed information can be found in workshop 2 of sprint
1.1 of the digital transformation project.

Figure 5. Technology life cycle models. Source: Linden & Fenn, 2003.

The Gartner hype cycle model, introduced in 1995, adds a dimension to technology
lifecycle modeling: it characterizes the expected progression of an emerging
technology from user and press hype through a period of disillusionment to the
eventual realization of the relevance of the technology and its role in each market or
industry. The model allows technology analysts to compare their understanding of
the evolution of technologies with the Gartner analysis of their maturity.

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 One of the important conclusions drawn from the Hype Cycle model is that
companies should not invest in technologies just because they are in vogue,
just as they should not ignore them simply because they do not live up to
expectations.

The Gartner Hype Cycle model does not cover You Might Find This Useful
the entire development of a technology (from Cearley, David W; Burke, Brian,
Searle, Samantha and Walker,
conceptualization to decline), but focuses on
Mike J. “Top 10 Strategic
the early development stages (Figure 6), when Technology Trends for 2018”,
expectations are at their highest levels. These Gartner Trends
Review:
stages are caused by events directly related to https://bit.ly/2Xa5xIQ
market development.

Gartner identifies five initial stages in the development of a technology:

Figure 6. The Gartner Hype Cycle. Source: “Gartner hype cycle,” 2021.

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Technology trigger

A technological breakthrough is represented by a public demonstration, a press

launch or any other event that generates significant publicity and garners industry
interest in an emerging technology. At this point, there is still no usable product, but
only laboratory prototypes (thus no commercialization). Venture capital funds and
other agents involved in this type of financing usually provide seed funding to
companies working on the development of the technology immediately after launch.

Peak of inflated expectations

As we approach the peak of inflated expectations, press articles explain more and
better how the technology works and discuss its potential impact on an industry and
on society in general. The first generations of products appear, which are usually
highly specialized, expensive and generally still underperforming. Products have a
very high profit margin because suppliers are still trying to depreciate R&D costs.
Near the peak, the number of suppliers of the technology increases greatly, forming
an ecosystem essentially made up of startups that leverage on the over-expectations
generated by the technology to consolidate. Progressively, the problems inherent in
the first generation of products naturally become visible because of the immaturity
of the technology; this causes the progressive entry into the phase of the technology
known as the through of disillusionment.

Through of disillusionment

As the technology has not been able to live up to the expectations of companies and
the media, it begins to suffer a process of discredit (in fact, some of the first pilots
end up in widely publicized public criticism). This is the time of consolidation of some
suppliers and the disappearance of many others, but also of the entry of large
volumes of venture capital interested in the discount at which they are being offered
participation in companies that develop this type of technology. The surviving

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suppliers use the information acquired in the first pilots to solve the problems
detected and advance in the consolidation of the technology, in the same way that
some users clearly identify the benefits derived from its use. The remaining
technologies slowly begin to enter a phase of cost efficiency and to enable the
creation of interesting products for certain market niches: we are entering the phase
known as the slope of enlightenment.

Slope of enlightenment

Applied research and empirical validations by a growing number of companies allow

a better understanding of the potential applications of the technology, its risks and
the most reliable suppliers. The providers of the technology are looking for advanced
rounds of financing to cover marketing and commercialization costs for the second
and third generations of the product. The most technologically aggressive companies
are beginning to adopt the technology, while the rest still maintain conservative
positions. At the beginning of the curve, barely 5% of the potential market has already
adopted the technology, a percentage that will rise steadily to around 30% as the
technology enters the so-called plateau of productivity.

Plateau of productivity

This phase represents the beginning of mainstream adoption of the technology, when
companies and users are already benefiting from the accepted and proven benefits
derived from its use. The technology begins to be used in increasingly diverse
applications, as the development of ecosystems in the industry value chain is
consolidated. The final height of the plateau (visibility) varies according to the
potential scope of the technology, differentiating between technologies with a broad
scope or those aimed at a specific market niche. In the post-plateau phase, the hype
around the technology gradually disappears and only a few specialized publications
continue to cover aspects related to the development and maintenance of the
technology.

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In Depth

Strategic Technology Management

The Gartner Hype Cycle model talks about the evolution of technologies
in the pre-maturity phase, but there are other models that deal with their
strategic management from different perspectives and evolutionary
moments.
One of the processes in which technologies make a more direct
contribution to company growth is their use in the context of new
product launches.
You can check the In Depth section to expand your knowledge on this
subject.

1.7. Technological Convergence and its

Implication in Innovation (Exponential
Technologies, Exponential Organizations)

The introduction and use of technology has changed our lives, and also the jobs
offered by companies.

The effect of technology and its impact is linked to Moore's law, a computer science
term originating in the 1960s that states that the processor speed or total processing
power of computers doubles every twelve months.

Gordon Moore, co-founder of Intel, worked on the development of memory chips

and microprocessors. About fifty years ago he predicted the digital revolution, or
Industry 4.0.

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What Are the Effects of this Law?

Moore's law has an effect in different areas:

 In economics: the use of technology reduces production costs and enables mass
production. For example, China managed to position itself globally and experience
an accelerated development of its economy.

 In the technology sector: the effect of this law refers to technology as a universal
product available to all. For example, Facebook is a social network with 1.39 billion
active users.

 In society: the introduction of technology in our daily lives has changed our habits
and behaviors. For example, the emergence of e-learning platforms, or online
teaching, coupled with the MOOC format delivered by prestigious academic
institutions, has changed the traditional way of teaching and receiving knowledge.

Scientific and technological advances have provided new solutions to the problems
that humanity faces, turning them into simple problems to solve.

The application of information technology to scientific knowledge for supporting the

discovery of new solutions is called exponential technology, and references the
development of innovations born from initiatives that were launched for a specific
purpose.

The application of this kind of technology to business activities and economics has
created an opportunity for organizations to create more value through their
activities, and to increase their profits and social impact.

Exponential technologies are classified into five fields:

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 Biotechnology: a recently created area linked to medicine that allows the
detection of genetic diseases for any person at a very low cost. This makes it
possible to develop treatments on an individual basis to prevent and treat possible
diseases.

 Robotics: robots can now incorporate functionalities such as image identification,

gathering and sorting of information and decision making. For example, the
industrial robot by Fanuc.

 Artificial intelligence: makes it possible to perform operations typical of the

human mind, making it feasible to reduce process times or improve productivity.

 Nanotechnology: allows new materials, machines and devices with unique

properties to be produced at a lower cost than by the traditional method. For
example, the latest nanofabrication techniques make it possible to obtain steel
that is ten times stronger than what has been achieved so far. Corannulene, a
recently discovered carbon molecule, has already been dubbed "the new
graphene" due to its properties, which will allow manufacturers to produce
electronic circuits the size of a molecule (Cornella, 2016).

 Neuroscience: facilitates the work of professionals in this field by developing drugs

to treat the human psyche.

Digital technologies contribute to the exponential progress of innovation.

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 Figure 7. Basis of exponential technology. Source: Own work.

The speed at which technologies are advancing today is historically unprecedented,

nor does it appear that they will stagnate or slow down as has happened in other
situations when innovations have appeared throughout history.

The advances we are witnessing have a

Did You Know…
significant impact on economic activity, 3D printers are currently being used to
which is increased when exponential produce genetically engineered meat for
the third world, without the need for
technologies interact and are combined
animals.
in innovative ways. You can now read the mood and medical
or professional history of a person with
special glasses, without the patient
This innovative combination of the use knowing.
of technology, together with the use of Solar energy is now cheaper than oil.
You can now follow a diet depending on
open platforms, makes it possible to
your genetic code.
bring people and institutions together In 2025, it will be hard to tell a robot from
a person.
and continuously generate new
business models, products, or services, i.e., it allows companies to continuously
reinvent themselves.

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Exponential Organizations

The fourth industrial revolution requires new rules: machines are replacing people
and changing the structure and organization of companies, which see their
productivity increase through the use of technology.

This new situation, for many experts, is synonymous with moving from linear growth
to exponential growth, with linear growth being understood as that which implies a
proportion between the increase in resources used and the increase in results
proportional to this increase in resources.

Exponential growth, on the other hand, is that which does not have a proportional
relationship associated with the increase in the use of resources, instead, with these
same resources, the growth is ten times higher than expected, which means that
those companies whose business model is exponential are ten times better, faster
than those that use traditional business models, receiving the name of exponential
organizations.

The term exponential organization (ExO) first appeared in the book Exponential
Organizations, written by Salim Ismail, Michael S. Malone, Yuri van Geest and Peter
H. Diamandis. This type of organization causes disruption in them.

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 Figure 8. Summary of the foundations of exponential organizations. Source: Own work.

To identify an exponential organization, one can use the six Ds model:

Digitalization

The first step towards an exponential organization is the transformation of their

business model from physical to digital.
If we look at some industries such as the literary industry, we can see that the digital
transformation through e-books results in a reduction of costs and, thus, of the selling
price for the customer.

Therefore, the first thing we must ask ourselves is: What can we digitize in our
business, product, or service? How can we do it? And how much time would it take?

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Disappointment

The second step in the process is to overcome the frustration generated by low
results and poor growth, derived from the initial change in the business model. These
organizations are called exponential precisely because their growth and results are
obtained through different means than in traditional models.

Figure 9. Linear vs. exponential organization. Source: Edited from Tobiassen, 2020.

Disruption

The third step to achieve an exponential organization is disruption or, in other words,
to generate change, which translates into a modification of the established rules,
distancing this type of business from traditional ones.

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For example, the photographic industry imposed the digital model over the analog
one, which forced the great leaders of this sector to make changes in their businesses
and adapt to the new situations, although it is true that some companies such as
Kodak were not able to do so.

Dematerialization

The fourth step is to establish a level of digitalization that allows dematerialization or

decoupling of the functionality of the product/service.

For example, today we no longer use cameras to immortalize our best family or travel
moments; instead, we tend to carry other types of devices that are more versatile
and cover more functions, such as cell phones or tablets.

Demonetization

We reach a decrease in production costs derived from the use and implementation
of technology without affecting its quality.

Democratization

The last step is democratization or, in other words, making the product available to
the general population on equal terms. Democratization universalizes products.

Characteristics of Exponential Organizations

There are three:

 Massive transformation purpose (MTP).

 Extensive use of non-owned resources.

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 Information as the main asset, so they are subject to the exponential growth
described in Moore's law and in Raymond Kurzweil's Accelerated Returns (2001).

Let us take a closer look at each of them:

Massive transformation purpose

Exponential organizations are characterized by thinking big; in fact, their mission is to

transform a sector or an industry. Who would have thought that a company like
Airbnb, without owning any real estate, would surpass the value of leading traditional
hotel chains?

Extensive use of resources that are not their own

Airbnb, Uber, etc., are viable because they have detached a given industry from its
physical aspect and have become digitized. Their motto is: “If you do not know what
the product is, then you are the product.”

Information as the main asset

Exponential organizations achieve far superior results to traditional companies, with

a smaller number of employees and causing exponential growth instead of the linear
growth typical of the traditional business model.

For example, if a traditional hotel chain wants to double its revenues, it will have to
double its number of hotels (linear vs. exponential growth). Exponential
organizations double their revenue without doubling their size.

This means that organizational forms such as “matrix structures” and “classic
organizations” do not function at the right pace in an exponential, information-based
world, and that, as David S. Rose states, “any company designed to succeed in the
20th century is doomed to fail in the 21st century” (cited in Singularity, n.d.).

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To be able to identify whether a company is exponential, Ismail created a very simple
formula made up of:

Figure 10. Parts of the Formula to Identify if a Company is Exponencial. Source: Compiled by the author from
Ismail, 2014.

According to Ismail, for an organization to be considered an exponential organization

it must have a clear M.T.P. and at least four S.C.A.L.E. or I.D.E.A.S. characteristics.
The Exponential Organizations website has a questionnaire so that anyone can find
out the exponential coefficient of their organization.

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1.8. Bibliographical References

Chesbrough, H. (2006). Open Innovation: the new imperative for creating and
profiting from technology. McGraw-Hill Education.

Christensen, C M. (1997). The Innovator's Dilemma: When New Technologies Cause

Great Firms to Fail. Harvard Business School Press.

Creative H. G. (2019). What is Exponential Technology?

https://creativehq.co.nz/blog/what-is-exponential-technology/

Fenn, J. & Raskino, M. (2008). Mastering the Hype Cycle: How to Choose the Right
Innovation at the Right Time. Harvard Business School Press.

Gartner hype cycle. (2021, September 29). In Wikipedia.

https://en.wikipedia.org/wiki/Gartner_hype_cycle

Ismail, S. (2014). Exponential Organizations: Why new organizations are ten times
better, faster and cheaper than yours (and what to do about it). Diversion Books.

Le Merle, M. (2017). Corporate Innovation in the Fifth Era: Lessons from

Alphabet/Google, Amazon, Apple, Facebook, and Microsoft. Cartwright Publishing.

Linden, A. & Fenn, J. (2003, May 30). Understanding Gartner’s Hype Cycles. Gartner.
http://www.ask-force.org/web/Discourse/Linden-HypeCycle-2003.pdf

Mc Grath, R. (2019). Seeing Around Corners: How to Spot Inflection Points in Business
Before They Happen. Houghton Mifflin Harcourt.

Porter, M. (1987). Competitive Advantage: Creating and Sustaining Superior

Performance. Simon And Sch UK.

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Unit 1. Key Ideas
Sanso, M. (2014). The Value Trail: How to Effectively Understand, Monitor and Deploy
Successful Business Models. Gower Publishing Limited.
Singularity. (n.d.). David s. rose. Retrieved 11 November, 2021, from
https://www.su.org/experts/david-s-rose#:~:text=David%20S.,-
Rose%2C%20the%20founding&text=Famous%20for%20his%20dictum%20that,the%
20cutting%20edge%20of%20innovation.

Speights, K. (2013, February 28). Big Pharma's Blockbuster Battle. Which big pharmas
look best in the battle for blockbuster drugs? The Motley Fool.
https://www.fool.com/investing/general/2013/02/28/big-pharmas-blockbuster-
battle.aspx

Tobiassen, B. (2020, March 18). Coronavirus proves we don’t understand exponential

growth. Finstart. https://finstart.co/coronavirus-proves-we-dont-understand-
exponential-growth/

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 In Depth
Strategic Technology Management within global value Systems

Kvedarien, A. (2019). Strategic Technology Management within global value Systems.

Open Economics, 2(1), 43-52. https://doi.org/10.1515/openec-2019-0005

Innovation is the most important driver for the prosperity of companies, so they must
have a defined strategy for the development of new products and their
organizational structure clearly aligned to a culture of innovation.

Emerging Technologies

Bryan, J. (2020, September 8). 5 Emerging Technologies Explained by Gartner Experts.

Smarter With Gartner. https://gartner.com/smarterwithgartner/5-emerging-
technologies-explained-by-gartner-experts/

New technologies that are currently being developed or will be developed in the next
5 to 10 years and will substantially alter the business and social environment.

The critical factor in disruption is the speed at which consumers or businesses adopt
a new product or service.

Innovation Management
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Unit 1. In Depth
 Test
1. Identify which are the differences between incremental and disruptive innovation.
A. Differences are in terms of objectives, effects, technologies involved, and,
typically, driving agents.
B. Differences only in terms of objectives and driving agents.
C. Differences only in terms of objectives, the resulting products are typically
the same.
D. Differences related to the type of technology involved.

2. Disruptive innovation:
A. Causes a change in the rules of competition based on a new business model-
technology relationship.
B. Aims at improving the operating margins of the current solution.
C. Aims to open up new markets and products.
D. Generates cost advantages relative to the base product.

3. The introduction of credit cards in the banking sector is considered to be:

A. An incremental innovation.
B. A disruptive innovation.
C. A new technology.
D. A new value chain.

4. An industry value chain:

A. Reflects the interactions between competing agents in that industry.
B. Reflects the primary and secondary activities that firms engage in to gain
profit.
C. Is a method of analysis that consists of understanding how business models
are structured in an industry.
D. All the previous statements are true.
5. According to the competitive paradigm model:

Innovation Management
34
Unit 1. Test
 A. Disruption is a phenomenon that causes the rupture of some dimension of
the paradigm, it can involve any dimension.
B. Each dimension of the paradigm is broken during the disruption process,
which represents the consolidation of a new way of competing.
C. the previous answer is true, and it also happens in the case of incremental
innovation.
D. The dimension of the value chain can be analyzed using Porter's five forces
approach.

6. The business model dimension of the competitive paradigm:

A. Analyzes basically qualitative parameters related to how a company makes
money.
B. A is true, and it can also include a quantitative breakdown.
C. B is true, and it also determines the innovation strategy of companies.
D. It combines quantitative and qualitative elements to give an overall picture
of how a standard is set in terms of how to monetize competitive advantage,
cost structure characteristics, and quantitative market perspective.

7. The life cycle of a business:

A. Presents four phases in relation to the evolution of sales of a product in an
industry.
B. Determines the way in which companies innovate in an industry.
C. Presents four phases in the evolution of a business, which we can define
based on different parameters. The type of innovation can be one of them.
D. Analyzes the competitive paradigm relative to the different stages.

8. The Gartner Hype Cycle model

A. Sets the evolution of the maturity phases of technologies.
B. Determines the leading companies in relation to the development of a
particular technology.
C. Relates expectations and public visibility of a technology to its degree of
early-stage development.

Innovation Management
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Unit 1. Test
 D. It is a method developed by the McKinsey consulting firm.

9. Point out which is not one of the phases to achieve an exponential organization:
A. Digitalization.
B. Massive transformation.
C. Demonetization.
D. Democratization.

10. Mark the correct statement:

A. Innovation without value generation is innovation.
B. Innovation is synonymous with invention.
C. Innovation is synonymous with creativity.
D. Innovation does not mean research and development.

Innovation Management
36
Unit 1. Test