customers

Synopsis: Entrepreneurship: Start-up resources: Customers:

Open innovation in SMEs Trends, motives and management challenges.pdf

Firmsmaybenefitfromtheir customers'ideasandinnovationsbyproactivemarket research, providingtoolstoexperimentwithand/or develop productssimilartotheonesthatarecurrently offered, orbyproducingproductsbasedonthedesignsof customersandevaluatingwhatmaybelearnedfrom general productdevelopment. External networkingisanotherimportantdimension which isconsistentlyassociatedwithopeninnovation (Chesbroughetal.

Technologyexploration Customer involvement Directly involvingcustomersinyourinnovation processes, forexamplebyactivemarketresearchto check theirneeds, orbydevelopingproductsbasedon customers'specificationsormodificationsofproducts similar likeyours. External networking Drawing onorcollaboratingwithexternalnetwork partners tosupportinnovationprocesses, forexample for externalknowledgeorhumancapital.

counterbalancelackof capacity 1 37513 Market Keepupwithcurrentmarket developments, customers, increasegrowth and/or marketshare 3 1361223614 Utilizationoptimaluseoftalents, knowledge, qualities, andinitiativesofemployees 30 Policy Organizationprinciples, management

Open innovation in SMEs Trends- motives and management challenges .pdf

They have to make systematic use of the competences of suppliers, customers, complementors (Nalebuff and Brandenburger, 1996) and other actors in the value system.

Customers, employees and other firms are the most common sources of new ideas, but the use of venture capital, outsourcing of R&d and the licensing of other firms'IP are also becoming more common nowadays.

by reducing R&d and commercialization costs and by accelerating involving customers into the product development

if customers prefer possible future characteristics of products. However, conventional market research methods may not work well in the instance of many industrial goods and services (Herstatt & Von Hippel, 1992.

Not only customers but also firms'employees can contribute to a firm's overall innovative performance. Both in closed and open innovation paradigms, individual employees play a crucial but different role.

) Additionally, interaction with suppliers & customers can provide missing external inputs into the learning process

Although the use of interorganizational networks, the involvement of employees and that of customers in the innovation processes seems to be equally feasible for both small and large SMES, the extent to

To address the role of customers, respondents were asked to which degree customers were involved in the innovation process,

for instance by doing active market research, deploying new products which were specified by customers themselves, or producing new products based upon inventions by customers of users.

The survey data contained a summary variable indicating customer involvement i e. a dummy coded 1

if firms used input from their customers in recent innovation processes. To measure the role of employees,

respondents had to indicate to which degree employees were stimulated to contribute to innovation processes, e g. by investing in employees'ideas and initiatives, creating autonomous teams with own budgets to carry out innovations,

public knowledge centers (e g. universities), customers, suppliers, and investors (e g. banks, venture capital firms). 20 Finally, we looked at the degree firms participate by equity investments in new or existing companies,

customers and employees in innovation processes is fairly 21 common among Dutch SMES. Licensing IP,

The firms in this cluster rely mainly on the involvement of network partners, customers and employees in their innovation processes.

customers, increase growth and/or market share Utilization*Optimal use of talents, qualities, and ideas of current employees Policy*Organization principles, management conviction that involvement of employees is desirable Motivation*Involvement of employees in the innovation process increases their motivation

and therefore have a better idea than managers or engineers about the potential success of products and the problems they experience with customers.

Open innovationinSMEs Trends,motives and management challenges.pdf

Open-innovation-in-SMEs.pdf

and in this way created value for customers by leveraging their partners'or other organizations'different competencies.

First, we pay attention to how small firms develop strategies to create value for customers. Several firms faced rapidly increasing commoditization in their product markets

companies engage in open innovation to create value for customers in new ways and to create a more profitable business.

A business model defines the way companies deliver value to a set of customers at a profit.

or business model innovation to find new ways to create value for customers. Business success comes from satisfying real,

indeed, the company delivers existing flavours at reduced costs to customers in the flavour and flagrance market.

and that customers would be willing to pay a premium for high-quality sleep. Consequently the two entrepreneurs defined their business as a provider of healthy sleep,

Providing a healthy sleep should be considered the value proposal that the company makes to its potential customers.

QOD offers customers a new meaning to the product of quilts. Quilts have always been considered a product that keep people comfortably warm in bed.

because the customers were not able to envisage that the properties of a functional quilt such as TEMPRAKON could actually benefit their ability to sleep well.

the more rewarding it is for companies to differentiate their product to deliver value to customers in a way they could not anticipate themselves.

always responding to the customers'requirements. Curana competes in a highly competitive market and since the 1960s the market has experienced continuous pressure to consolidate.

what customers might value. Business model innovations start with articulating a customer value proposition. 17 During our interviews

all managers underlined that creating value for customers is the first and most important element in generating new business.

however, that unique customer value propositions are developed by questioning existing customers. In many cases, this would be a good recipe for incremental changes,

the relevance of the experience economy for innovating SMES New offerings can create value for customers in different ways.

the company can offer more convenience to the customers; or the company can reduce costs and thus the price of a product or service.

several of the successful SMES we analysed preferred to offer genuine experiences to their customers as a new source of value.

experiences have emerged as a next step in creating value for customers. Commoditization makes it increasingly difficult for SMES to operate profitably in established markets where scale

one of its major customers. Although growth and profitability were exceeding the expectations of the company,

producing accessories according to specifications and prices customers set. Moving from an OEM to an ODM allowed Curana to set its own price

and create value for its customers producing products with a customized design. Being an ODM would not differentiate Curana from other ODMS, however.

Their innovation adds value to customers and helps retailers reduce costs. In fashion rent is the most important cost factor.

if customers could experience shopping and buy fashion in a novel way. Nor is optimized shopping from a customer's perspective.

Finally, customers cannot check whether the clothes they are buying in the shop really coordinate with those they have at home.

After scanning, customers see themselves on large screens as a virtual, three-dimensional model dressed in clothes from various collections that the shop offers.

Customers can also be welcomed by a stylist with whom they discuss their personal style, but the software also can make choices for the customer depending in the skeleton, weight, age,

and evaluate the clothes the customers selected before they purchase. This process is called‘istyling'.'It creates new ways to change shopping

Customers experience an additional advantage: purchases are stored in a personal, virtual wardroom, which can be consulted any time.

Moreover, customers can see online at home how they might look in a new collection. This innovation is all about experiencing fashion;

Stylists even guide their customers through a transforming or restyling experience, subsequently changing, adapting, or upgrading prior dressing habits to professional standards So,

and service oriented into more profitable business models based that generate experiences for customers The role of open innovation is not in business model innovation is discussed not here.

This change in strategy created value for its customers and was highly profitable for the company.

and lead-customers. New technologies thus offer opportunities for small firms even in the so-called low-tech industry such as textiles

changes in customers'needs, and in offering customized products and services to clients (particularly in business-to-business industries).

Segers & Balcaen (see p 35) is a small Belgian plastics packaging company that continuously identifies new packaging needs among its customers. 33 For many other companies,

not amidst the mainstream. 22 Mainstream customers will only buy a technology product when the new technology has been proven,

what customers need from technology that is available from different types of knowledge partners. Small firms are successful as innovation champions

because they know how to bundle the right expertise of different technology agencies to solve a problem for their customers.

and about customers'self-image. Similarly, the founders of Quilts of Denmark intended to be providers of a healthy sleep, not quilts-makers.

what customers might value. Business model innovations start with articulating a customer value proposition. Creating customer value through game-changing

and highly profitable business models will usually not be developed by questioning existing customers. Sometimes the business model is straightforward.

they can create more convenient products for the customers. SMES may also wrap additional services around their product or offer genuine experiences to the customers.

Turning businesses under the threat of commoditization into genuine experiences for customers is a difficult target for SMES

but it is one of the most profitable strategies in the long term and a way to gain more power in the industry.

and therefor offer opportunities for SMES to pursue embryonic markets that are too small to attract large companies. o SMES have greater capability to specialize than large firms to offer customized service to customers. o Small companies may offer completely new

experiences for customers. These radically new ways of offering value for customers takes time to develop

and there are too many unknowns at the outset to guarantee a market big enough to attract big companies. 35 Figure 4:

We pay special attention to the role of customers and innovation partners in this process. Finally, several SMES have built a corporate reputation or brand as part of their strategy as a way to fight commoditization.

The customers (manufacturers) determined the prices, and the company could not add value because the product was easy for other bike accessory manufacturers to imitate, often at the same price.

and price reverted to Curana based on the premium customers want to pay for a unique and exclusive design.

Customers started to realize that Curana was becoming an important partner for their own success. Over the years,

Curana organized information sessions to promote its new ideas among potential customers. In this way, the company received valuable feedback from potential customers.

Realization is the fourth step. For Curana, this step started with 39 developing a high-end, three-dimensional model of the concept in collaboration with an (external) engineering partner.

It is driven a vision approach where direct interaction with potential customers is delayed until a later stage in the process.

Customers are still important, but they are not driving the company's innovation strategy. Through this strategy, Curana created bike accessories that were unique to the industry.

Only at that point did the company realize that it could increase the uniqueness of its designs (and the value for customers) further by switching to a proactive innovation strategy.

This change in strategy gave the company more degrees of freedom to act (customers were no longer taking the initiative)

Philips spent significant energy educating customers about how to make the fries tasty and crispy in an Airfryer;

essentially, customers had to learn to fry again because hot air frying differs from frying in regular fryers.

With Philips communicating with customers via its My Kitchen Web site, different customers are already experimenting with new ingredients, meals, and so on.

and the Airfryer, explaining to customers how they could optimize the device for several frozen snacks.

The food separator allows customers to fry an entire meal and can inspire snack producers to develop different combinations with the same frying time as a ready-to-eat meal.

The new possibilities the Airfryer and its Rapid Air Technology present only emerged after customers started to use the device and when other players in the market, such as snack producers, envisioned new market opportunities.

Each firm stayed focused on its product markets and customers. The most interesting example in this respect is Curana.

including its customers. Outside that open innovation network, the company cannot rely on its reputation and it has to start from scratch to build its network of partners

and customers. 27 Open innovation networks thus enable a company to deliver value in completely new ways to its customers.

however keep the company tied to the existing innovation partners and customers. In a phrase, innovation networks enable,

The race into ever more complex applications of chemicals coincided with a continued focus on the same type of customers and applications.

They stick to their value chain partners or customers. In several cases, the innovation network is one of the factors that limit the options to change over time.

which is granted to European companies that use design to create added value for their customers

They stick to their markets, customers, and partners. Open innovation networks enable a company to deliver value in a completely new ways to its customers,

but they also keep the company tied to the existing innovation partners and customers. Innovation networks enable,

but they also bind. Small companies must use relatively inexpensive but credible ways to develop a reputation or brand.

Examples as we have seen in Chapter 2 are reducing costs for customers (e g.,, Isobionics), increasing time efficiency, solving problems (e g.,

, DNA Interactif Fashion), increasing the attractiveness of the customers'products or services (e g.,, Curana), and providing new functionalities and increasing emotional value (e g.,

Each firm we examined started its open innovation adventure with a new concept about how to serve customers better.

In some cases, customers identified a problem themselves; in other cases, the entrepreneur devised a new concept.

Later on, Curana established strong bonds with suppliers, the designer community, knowledge centers, and customers. Working with external partners over the length of the value chain (from design to production and sales) leveraged the business to new opportunities that could not have been seized without collaboration.

which it could transform into extraordinary solutions for its customers. The network was a powerful tool in speeding up the innovation process and in combining novel designs with new materials.

PROF members (Patient Room of the Future)( see p 59) jointly created value for customers in yet another way.

and with lead customers on the other hand is essential for understanding how the company can continue to make profits in this way.

if they could offer customers the experience of a healthy sleep by adding new functionalities.

Eco-radiators appeal to some customers because they reduce the carbon-footprint of heating houses and buildings.

because some customers value a nicely designed radiator such as the Heatwave (see figure 6). This radiator is developed by an artist, Joris Laarman, and Jaga.

because customers make a clear distinction between companies that offer the authentic experience and those that are copying it 34.

First, they gain direct access to potential customers although they are not in a sales mode in PROF

In addition, a showroom presents the brand new idea of a patient room to potential customers.

Visiting the showroom has the additional advantage that potential customers can invite different manufacturers at the same time.

and that Curana would try to pass part of the price increase to its customers. In an innovation network, partners are interconnected

Take for instance, the example in which a company grants exclusive designs or products to its customers.

If direct customers are the target customer, then the innovation network will most likely be small and easy to manage.

thus changing the relationship with customers profoundly. The combination of different fields of expertise to develop a new offering can lead to attractive profits

It still took two years to develop a prototype that could be demonstrated to potential customers.

Most customers and health authorities perceive that the Airfryer is a highly innovative product that drastically reduces the need for oil

which the company brings to potential customers (not necessarily existing ones). A radically new value proposition may offer customers new meaning to the product or service offering.

The network of partners: Common in all cases is that the SMES establish a network of external partners.

the customers'reaction is not easy to predict. In addition, the SME depends significantly on its partners'commitment.

market sources (suppliers of equipment (i), customers (ii), competitors and other firms with similar activities (iii), commercial labs, private R&d organizations, and consultants (iv;

Isobionics'customers, notably food manufacturers, can use Biovalencene--the first commercialized flavour by Isobionics to create natural citrus flavours and fragrances for their products without worrying about quality issues that plague natural extracts.

Marketing and selling technology products to mainstream customers, Harpercollings Publishers, New york. Chapter 3 23 See previous chapter for a more detailed description how Curana developed the B Lite.

and computer engineers called Bellkor's Pragmatic Chaos. The group developed software that is at least 10%more accurate than Netflix's current software (Cinematch) at predicting which movies customers will like based on their past preferences.

Oxford_ European competitiveness in information technology and lon term scientific performance_2011.pdf

and between companies and large (public and private) customers. On the side of industry, what is crucial is the working of mechanisms that also permit largescale experimentation,

that US companies in the IT industry started to work with large service firms as potential customers as early as the 1960s.

Policies in support of high growth innovative smes.pdf

fast-action and internationally focused business development programme for small companies and entrepreneurs in Denmark. 68 Its objective is to provide knowledge, tools and access to networks of customers,

The process includes contacts to customers and industry experts as well as support to find the necessary resources, above all funding and employees.

while the final pitch includes validated information for customers and industry experts, an actionable operational plan,

It also tracks baseline data for its performance, such as employees, revenue growth and number of customers.

potential customers and partners to accelerate the growth of the target companies. The Accelerators select their target companies

The business model is focused often on unique solutions for pilot customers. With this business paradigm high growth is rarely achievable.

Management often does not understand how to make the transition from customised products for pilot customers to scalable products for larger markets.

partners and customers in other countries. Internationalisation may first of all refer to sales, i e. to offering products and services in other countries.

The lowest level of agreement was for the statement that legislation ensuring that ICT companies can sell to customers EU-wide needs to be improved (29%each for

In keeping with the growing demands of its customers, Greenpac expanded its analysis and consultation services,

and Wuxi (China) headquarters that serve the global market of international polymer customers in the electrical and electronics,

lost customers (four times), financial crisis and automobile market crisis (four times), raw material costs (three times), deliberate drawback or consolidation (three times) and difficult infrastructure (twice.

The program gives you insights into your customers, competitors and markets. The goal is to give you the knowledge

During an intensive five-month process you will be in contact with customers and industry experts and we will help you find the resources necessary for your success-no matter

Policies in support of high-growth innovative SMEs - EU - Stefan Lilischkis.pdf