Innovative ideas into products
1-The first stage in the innovation process is to find the “new” ideas and insights to commercialize. The first stage in the innovation process is to find the “new” ideas and insights to commercialize.
2-To enable successful innovation, CEOs need to create both an innovation agenda and a culture tolerant of risk.This includes setting expectations for innovation, and developing methods to measure the success of innovation activities.
3- Transforming ideas to novel products, processes and services Effectively transforming ideas to commercially useful applications is not easy, and many innovations fail in this stage of the process.
4- Scaling value creation CEOs can realize value from innovations when they scale to successfully help to create significant revenues or generate substantial savings.

Process vs Product innovation
Product innovations are embodied in the outputs of an organization—its goods or services. For example, Honda's development of a new hybrid electric vehicle is a product innovation. Process innovations are innovations in the way an organization conducts its business, such as in the techniques of producing or marketing goods or services. Process innovations are often oriented toward improving the effectiveness or efficiency of production by, for example, reducing defect rates or increasing the quantity that may be produced in a given time. For example, a process innovation at a biotechnology firm might entail developing a genetic algorithm that can quickly search a set of disease-related genes to identify a target for therapeutic intervention. In this instance, the process innovation (the genetic algorithm) can speed up the firm's ability to develop a product innovation (a new therapeutic drug).

Globalization on innovation he increasing importance of innovation is due in part to the globalization of markets. Foreign competition has put pressure on firms to continuously innovate in order to produce differentiated products and services. Introducing new products helps firms protect their margins, while investing in process innovation helps firms lower their costs. Advances in information technology also have played a role in speeding the pace of innovation. Computer-aided design and computer-aided manufacturing have made it easier and faster for firms to design and produce new products, while flexible manufacturing technologies have made shorter production runs economical and have reduced the importance of production economies of scale.2 These technologies help firms develop and produce more product variants that closely meet the needs of narrowly defined customer groups, thus achieving differentiation from competitors. For example, in 2009 Toyota offered 17 different passenger vehicle lines to the U.S. market under the Toyota brand (e.g., Camry, Prius, Highlander, and Tundra). Within each of the vehicle lines, Toyota also offered several different models (e.g., Camry, Camry LE, Camry SE, Camry XLE, Camry Hybrid) with different features and at different price points.

Research and Development
Research can refer to both basic research and applied research. Basic research is effort directed at increasing understanding of a topic or field without a specific immediate commercial application in mind. This research advances scientific knowledge, which may (or may not) turn out to have long-run commercial implications. Applied research is directed at increasing understanding of a topic to meet a specific need. In industry, this research typically has specific commercial objectives. Development refers to activities that apply knowledge to produce useful devices, materials, or processes. Thus, the term research and development refers to a range of activities that extend from early exploration of a domain to specific commercial implementations.

Innovation partnerships
Firms' research and development is considered a primary driver of innovation. In the United States, firms spend significantly more on R & D than government institutions spend on R & D, and firms consider their in-house R & D their most important source of innovation.
Firms often collaborate with a number of external organizations (or individuals) in their innovation activities. Firms are most likely to collaborate with customers, suppliers, and universities, though they also may collaborate with competitors, producers of complements, government laboratories, nonprofit organizations, and other research institutions.
Many universities have a research mission, and in recent years universities have become more active in setting up technology transfer activities to directly commercialize the inventions of faculty. Universities also contribute to innovation through the publication of research findings.
Government also plays an active role in conducting research and development (in its own laboratories), funding the R & D of other organizations, and creating institutions to foster collaboration networks and to nurture start-ups (e.g., science parks and incubators). In some countries, government-funded research and development exceeds that of industry-funded research.
Private nonprofit organizations (such as research institutes and nonprofit hospitals) are another source of innovation. These organizations both perform their own R & D and fund R & D conducted by others.
Probably the most significant source of innovation does not come from individual organizations or people, but from the collaborative networks that leverage resources and capabilities across multiple organizations or individuals. Collaborative networks are particularly important in high-technology sectors.
Collaboration is often facilitated by geographical proximity, which can lead to regional technology clusters.
Technology spillovers are positive externality benefits of R & D, such as when the knowledge acquired through R & D spreads to other organizations.

Technology S curve pg 55
Many technologies exhibit an s-curve in their performance improvement over their lifetimes.21 When a technology's performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then accelerated improvement, then diminishing improvement (see Figure 3.1). Performance improvement in the early stages of a technology is slow because the fundamentals of the technology are poorly understood. Great effort may be spent exploring different paths of improvement or different drivers of the technology's improvement. If the technology is very different from previous technologies, there may be no evaluation routines that enable researchers to assess its progress or its potential. Furthermore, until the technology has established a degree of legitimacy, it may be difficult to attract other researchers to participate in its development.22 However, as scientists or firms gain a deeper understanding of the technology, improvement begins to accelerate. The technology begins to gain legitimacy as a worthwhile endeavor, attracting other developers. Furthermore, measures for assessing the technology are developed, permitting researchers to target their attention toward those activities that reap the greatest improvement per unit of effort, enabling performance to increase rapidly. However, at some point, diminishing returns to effort begin to set in. As the technology begins to reach its inherent limits, the cost of each marginal improvement increases, and the s-curve flattens.

Impact of technology adoption on competitive advantage pg76
Firms can also attempt to influence the selection of a dominant design by building coalitions around a preferred technology.17 This is aptly illustrated in the opening case. While the preceding has emphasized the emergence of dominant designs through market forces, occasionally a dominant design is put in place through government regulation.
Government Regulation
In some industries, the consumer welfare benefits of having compatibility among technologies have prompted government regulation, and thus a legally induced adherence to a dominant design.
The Result: Winner-Take-All Markets

All these forces can encourage the market toward natural monopolies. While some alternative platforms may survive by focusing on niche markets, the majority of the market may be dominated by a single (or few) design(s). A firm that is able to lock in its technology as the dominant design of a market usually earns huge rewards and may dominate the product category through several product generations. When a firm's technology is chosen as a dominant design, not only does the firm have the potential to earn near-monopoly rents in the short run, but the firm also is in a good position to shape the evolution of the industry, greatly influencing what future generations of products will look like. However, if the firm supports a technology that is not chosen as the dominant design, it may be forced to adopt the dominant technology, effectively forfeiting the capital, learning, and brand equity invested in its original technology. Even worse, a firm may find itself locked out of the market if it is unable to adopt the dominant technology. Such standards battles are high-stakes games—resulting in big winners and big losers.

Increasing returns to adoption also imply that technology trajectories are characterized by path dependency, meaning that relatively small historical events may have a great impact on the final outcome. Though the technology's quality and technical advantage undoubtedly influence its fate, other factors, unrelated to the technical superiority or inferiority, may also play important roles.19 For instance, timing may be crucial; early technology offerings may become so entrenched that subsequent technologies, even if considered to be technically superior, may be unable to gain a foothold in the market. How and by whom the technology is sponsored may also impact adoption. If, for example, a large and powerful firm aggressively sponsors a technology (perhaps even pressuring suppliers or distributors to support the technology), that technology may gain a controlling share of the market, locking out alternative technologies.

Role of complementary technologies on tech adoption and success.
Furthermore, as firms develop complementary technologies to improve the productivity or ease of utilization of the core technology, the technology becomes more attractive to other firms. In sum, learning effects suggest that early technology offerings often have an advantage because they have more time to develop and become enhanced than subsequent offering.
When new technologies are introduced to a market, important complements may not yet be fully developed, thus hindering adoption of the innovation. The development of vehicles powered by hydrogen fuel cells (see the above Theory in Action) provides an excellent example of how a lack of complementary technologies and infrastructure can pose serious obstacles for early movers.

Core Competencies pg 122 tacit resources - Resources of an intangible nature (such as knowledge) that cannot be readily codified. socially complex resources - Resources or activities that emerge through the interaction of multiple individuals. core competencies:
Definition of 'Core Competencies'
The main strengths or strategic advantages of a business. Core competencies are the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. Theoretically, a core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers. It should also be hard for competitors to replicate.
Investopedia explains 'Core Competencies'
A business just starting out will try to first identify - and then focus on - its core competencies, allowing it to establish a footprint while gaining a solid reputation and brand recognition. Using, and later leveraging, core competencies usually provides the best chance for a company's continued growth and survival, as these factors are what differentiate the company from competitors.

1. Is it a significant source of competitive differentiation? Does it provide a unique signature to the organization? Does it make a significant contribution to the value a customer perceives in the end product? For example, Sony's skills in miniaturization have an immediate impact on the utility customers reap from its portable products. 2. Does it transcend a single business? Does it cover a range of businesses, both current and new? For example, Honda's core competence in engines enables the company to be successful in businesses as diverse as automobiles, motorcycles, lawn mowers, and generators. 3. Is it hard for competitors to imitate? In general, competencies that arise from the complex harmonization of multiple technologies will be difficult to imitate. The competence may have taken years (or decades) to build. This combination of resources and embedded skills will be difficult for other firms to acquire or duplicate.

Quantitative and qualitative methods for choosing a project.
QUANTITATIVE METHODS FOR CHOOSING PROJECTS

Quantitative methods of analyzing new projects usually entail converting projects into some estimate of future cash returns from a project. Quantitative methods enable managers to use rigorous mathematical and statistical comparisons of projects, though the quality of the comparison is ultimately a function of the quality of the original estimates. The accuracy of such estimates can be questionable—particularly in highly uncertain or rapidly changing environments. The most commonly used quantitative methods include discounted cash flow methods and real options.
The most commonly used quantitative methods of evaluating projects are discounted cash flow methods such as net present value (NPV) or internal rate of return (IRR). While both methods enable the firm to create concrete estimates of returns of a project and account for the time value of money, the results are only as good as the cash flow estimates used in the analysis (which are often unreliable). Both methods also tend to heavily discount long-term or risky projects, and can undervalue projects that have strategic implications that are not well reflected by cash flow estimates.

Qualitative methods of assessing projects.
One commonly used qualitative method of assessing development projects is to subject the project to a series of screening questions that consider the project from multiple angles. These questions may be used merely to structure the discussion of a project or to create rating scales that are then utilized in an approach that combines qualitative and quantitative assessment.
Q-sort is a qualitative method of assessing projects whereby individuals rank each project under consideration according to a series of criteria. Q-sort is most commonly used to provide a format for discussion and debate.
Conjoint analysis is a method of converting qualitative assessments of a choice into quantitative weights of the different criteria underlying the choice. It is most often used for assessing how customers value different product attributes.
Data envelopment analysis (DEA) is another method that combines qualitative and quantitative measures. DEA enables projects that have multiple criteria in different measurement units to be ranked by comparing them to a hypothetical efficiency frontier.