Chapter 11

Corporate Entrepreneurship
and Innovation
Chapter 11
Encouraging concept development
1
CEI
Layers of differentiation
Design
Functional
Emotions of
core of
aesthetics of
brand
product
Apple
Design thinking
1. Define - Identify the real problem to solve & define
design brief unconstrained by existing solutions
2. Research - Observe how people deal with problem &
how similar problems in different contexts are handled
3. Ideate - Think ‘outside the box’. Look at problem from
different perspectives & come up with as many options
as possible - do not close down options too early
4. Prototype - Experiment with prototype solutions to see
which work
5. Choose - This is a process of synthesis which helps
select the one(s) that work best
6. Implement - Try out solution(s). Prototypes need to be
tested & refined
7. Learn - Always learn from both success & failure
Explained
Principles of design thinking
 Empathy with users

 Discipline of prototyping
 Tolerance of failure
Dyson
The double diamond design process
Divergent Divergent
Convergent Convergent
Phase 1 Phase 2 Phase 3 Phase 4

Discover Define Develop Deliver
3M
CASE
insight
Zound Industries
1. Describe who you think are the target market

customers for each of the four brands. How
are they distinctive & different? How are their
emotional (right-brain) and practical (left-
brain) needs different? What are the
implications for how each brand is marketed?
2. If this is a fashion brand, is it sustainable? If
so, how?
Products
CASE
insight
Apple (3)
1. Why & how did the original iMac change customers’
views about home computers?
2. Why are sales of iPhones declining in China?
3. Does physical design create sustainable
competitive advantage?
4. What is the relationship between virtual products &
the physical product on which they operate? How
do you decide on pricing policies when sales of one
product such as iPhones impact on the sales of
another such as the App Store?
5. What other factors might be ‘designed’ into product
innovations?
HBR case
Lean start-up cycle
Launch as a ‘minimum
viable product’ with just
enough features to satisfy
Plan Implement Evaluate
Experiment Market test Integrate

results
Restart cycle
Use customer
feedback to validate
learning
Dyer
Lean start-up & affordable loss
1. Set ‘affordable loss’ – amount you are willing to lose
2. Launch product in its ‘minimum viable’ state & tailor it
to the specific needs of customers using feedback
Risk
Advantages:
Step 1: Step 2:
 Cost minimization Set Push to
 Market risk reduction affordable maximise
loss (risk) information
 Fast – first-mover advantage
Stages giving
more information
Key to success:
 Close customer relationships with mechanisms to
receive & act on their feedback
Eric Ries
1
Risk and time to launch
High
Risk Best time to

launch
Low
Time to market
1
Metrics
Performance metrics
Quantifiable measures of performance
Key performance indicators (KPIs)

Performance metrics for key activities
Which performance
metrics are critical?
1
SMART performance metrics
Specific
Measurable
Achievable
Relevant
Time constrained
1. Identify process
2. Establish quantifiable
outputs
3. Establish targets
1
Concept development cycle

Operational
Market/
relatedness
industry
& strategic
Commercial research Go/no-go
importance
viability decision
6 point
1 4 5 Business
Idea MVP Market model & Product
Initial
generation screening development testing strategy launch
formulation
2 3
Concept Product
development Measurement against
specification
performance metrics & feedback
Concept testing
and feedback
1
1. Initial screening
 Commercial viability
 Operational relatedness &
strategic importance
1
Commercial viability checklist

 Identified market need or gap in market
 No, few or weak existing competitors
 New or growing market
 Clearly identified customers
 High profit margins
 Not easily copied
 Identifiable risks that can be monitored
& mitigated
 Scalability
 Viable business model
1
2. Concept development
3. Product/service specification
4. MVP prototype development
1
CASE
insight
FBR (Fastbrick Robotics)
1. What events were

pivotal in taking this
project forward? Were
they predictable?
What lessons are
there in this for
creativity &
innovation?
2. Why was building a working commercial prototype
so important?
3. Why is FBR seeking partnerships, rather than just
rolling out the Hadrian X itself?
FBR
1
2. Concept development
3. Product/service specification
4. MVP prototype development
5. Market testing
6. Business model development
1

Operational
Market/
relatedness
industry
& strategic
Commercial research Go/no-go
importance
viability decision
6 point
1 4 5 Business
Idea MVP Market model & Product
Initial
generation screening development testing strategy launch
formulation
2 3
Concept Product
development Measurement against
specification
performance metrics & feedback
Concept testing
and feedback
2
CASE
insight
Dropbox
1. How have lean start-up

methodologies helped Dropbox?
2. How much can these methodologies
tell us about monetization & the
financial return from the product?
3. Can the lessons from Dropbox be
transferred to other start-ups not
based on the internet?
2012 2017
2
Market size definitions

Size of a general
market that might be Size of your specific
interested in buying target market segment
Potential market within the TAM
a product
Total Available Market (TAM)
Size of Served Available Market

prospective (SAM)
market
– those in Size of the
potential SAM you
market who actually
might be Penetrated
market capture
interested in
buying this type
of product
2
Activities
1. For the product/service ideas you used for Activity 6 in Chapter
10, apply the criteria listed in Table 11.1 to try to assess their
commercial viability. What does this tell you at this stage? How
might you go about obtaining any information you need?
2. Select any recently introduced new product/service & apply the

criteria listed in Table 11.1 to try to assess its commercial
viability. What does this tell you? How did the company go
about obtaining the information it needed to have sufficient
confidence to launch the product/service?
3. Select a product or service market &, using desk research,

estimate the TAM. Select the three major competing products or
services within that market & estimate the SAM for each.

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Corporate Entrepreneurship

 Empathy with users

Phase 1 Phase 2 Phase 3 Phase 4

1. Describe who you think are the target market

Plan Implement Evaluate

Experiment Market test Integrate

Risk and time to launch

Risk Best time to

Key performance indicators (KPIs)

SMART performance metrics

Concept development cycle

Concept development cycle

Commercial viability checklist

Concept development cycle

1. What events were

Concept development cycle

Concept development cycle

1. How have lean start-up

Market size definitions

Total Available Market (TAM)

Size of Served Available Market

2. Select any recently introduced new product/service & apply the

3. Select a product or service market &, using desk research,

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