Opportunities identificationLecture 3

Andrea Schiffauerova, PhD.

INSE 6411Product Design Theory and Methodology

Chapter 3

Additional materials

Opportunity identification• Opportunity is an idea for a new product development:▫ A newly sensed need▫ A newly discovered technology▫ A rough match between a need and a possible solution▫ A product description in embryonic form

• Opportunity classification based on:▫ The extent of the familiarity with the solution (technology)▫ The extent of the familiarity with the need (market)

• Types of opportunities:▫ Horizon 1: improvements, variants, and cost reduction of existing

products for existing markets▫ Horizon 2: new territory of one or both of the market and

technology dimensions▫ Horizon 3: New category of product/service with great

uncertainty.

Types of opportunities

PlanningConcept

Development

System-Level

Design

Detail

Design

Testing and

Refinement

Production

Ramp-Up

Opportunity Tournament

Exceptional Opportunities

• Some opportunities ultimately become new products.

Opportunity identification

50 opportunities

7selected

3 explored

1 mission

statement

1 PD process

1 product launch

FroliCatOpportunity Funnel

Opportunity identification example

Swinging ball

Pharmaceutical Drug Development

Hollywood Film Studios

The Funnel in Various Industries

Where do opportunities come from?

Survey of 524 managers in diverse service and product industries, 2006.

Techniques for generating opportunities

• Follow a personal passion▫ List your passions and consider how new technologies, trends,

etc. might influence them

• Compile bug lists▫ List unmet needs of users, any annoyance or frustration, any

problem, customer complaints, etc.

• Pull opportunities from capabilities (resources).▫ Capabilities must be:

Valuable Rare Not easy to imitate Non-substitutable

Techniques for generating opportunities

• Study customers

▫ Deeper understanding of the true customer needs

▫ Observations better than surveys

Simple, easy to ride and easy to get on/off bicycle designed based on

the observations of customers

Light bicycle with many gears designed based on the surveys of customers

Techniques for generating opportunities

• Consider implications of trends▫ Consider environmental, technological and social trends

• Imitate but improve▫ Take successful product of another firm and improve it

Alternative solutions addressing the same need Alternative needs using the same solution

▫ Sources of imitation: Media/marketing activities of firms (trade shows, patent filings, etc.) De-commoditize a commodity

Commodity is a good without qualitative differentiation Consider differentiating the inexpensive undifferentiated items

A common coffee Starbucks coffee

Techniques for generating opportunities

Drive an innovation “down market”

Create much cheaper versions providing the same benefits

Import geographically isolated innovations

Krating Daeng – Red BullEnergy drink consumed by truck drivers in Thailand

Electric toothbrush for $100 $6 dollar toothbrush

Red BullEnergy drink sold around the world

• Imitate but improve (continued)

Techniques for generating opportunities

• Benefit from external sources▫ Lead users – creative consumers

Lead users have needs before the public experiences them

Lead users are creative consumers

▫ Ideas through social networking

▫ Universities and governmental labs

▫ Crowdsourcing

Crowdsourcing is the process of obtaining services, ideas or solutions from a large group of people, especially online

Solicit your opportunities online

InnoCentive - - Crowdsourcing example

Global community of solution providers

Internal R&D staff and conventional external collaboration

The best solution is awarded a cash prize

The solvers come from all the world

InnoCentive is a crowdsourcing company that accepts by commission any problems and posts them online for anyone to solve them and gives cash awards for the best solutions

How to increase the number of great opportunities:

How to generate exceptional opportunities?

Generate a large number of great opportunities

Seek high quality of the opportunities generated Use better methods,

better sources

Create high variance in quality of the opportunities Quality level

BAD GOOD

Mean

How to generate exceptional opportunities?

High mean quality of the opportunity identification process.

High variance in quality of the opportunity identification process.

High number of “draws” from the opportunity identification process.

High accuracy of discerning the best subset of opportunities generated.

Opportunity identification process

• Establish a charter▫ The innovation charter articulates PD process goals and

establishes the boundary conditions for an innovation effort

▫ E.g. FroliCat: “Create a physical product in the cat toy category that we can launch to the market within about a year through our existing retail sales channel.”

• Generate and sense many opportunities▫ Consider both internal and external opportunities

• Screen opportunities▫ Voting through web-based surveys, workshops

Opportunity identification process

• Develop promising opportunities▫ Select a few promising opportunities, search for existing

solutions, discuss/test with users and/or customers, complete financial analysis, estimate market size, etc.

• Select exceptional opportunities▫ RWW (Real-Win-Worth-it) framework:

Is there a real market and a real product?

Can we win?

It is worth doing it?

• Reflect on the result and process

• Next lecture, on January 29, each student will make a short presentation for the class including 2 opportunities

• Opportunities will be evaluated by others

• Try to be inventive!

Opportunity Statement

• An opportunity statement is a 1- or 2-sentence description of a product or market opportunity

• Should not imply the use of any particular technology

• Should not imply a specific product concept

• Example:▫ “Create a simple bedside device that displays internet

weather forecasts so you can see what the weather will be when you wake up in the morning.”

How to identify opportunities

• Potential sources:▫ Think about the frustrations and complaints you or

your friends have about existing products

▫ Think about inefficiencies in your daily routine

▫ Scan the Table of Content of Proc. IEEE for the past few months to get an idea of emerging trends

Opportunities Identification

• Each student should come with 2 opportunities

• Each student should make a short presentation in the session of January 29

• For each opportunity there should be a few slides:▫ Explain problem, need, or motivation

▫ Explain necessary elements in solution

▫ Summarize with opportunity statement

• The whole presentation including both opportunities should be around 5 minutes.

Opportunities Presentation

Next lectures

• January 29▫ Presentations of opportunity statements

▫ Design project description and discussion