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