

Competition versus Collaboration

Studying so much about collaboration within and outside the organization made me curious about the competition element. So I tired to find out where does the competition lies when we are talking about Collaboration.Christiansen (2000) says that for ?creativity? and ?innovation?, it is important to consider whether ?collaboration? or ?competition? is valuable. Although there are some downsides with collaboration like: collaborative group working independently, resistance & dispute, ownership problems, Time pressure in members and their activities, etc.. Despite having such downsides ?competition? is beaten by ?collaboration?. Furthermore, competition among individuals within an organization, in idea generation, forces people to shutdown. Who wins and who looses is based on the rules of the game which includes individuals? competencies and other factors. Whereas in the innovation-process, creativity nourishes with new ideas from a variety of sources. In competition individuals hold back information. Furthermore, the individual might not have a clear picture about the problem in-hand or reduce creative thinking or might not give enough time to think about the solution. Thus, increasing the possibility that the outcome is not a best solution or a best idea. Whereas in collaboration, individuals will be synergistically working together towards their objective. Collaboration is an important part of the innovation stages of selecting the ideas, development and commercializing an idea.

In case where competition is outside the organization Nagel (2001) says that Wealth is created by ?competition? and innovation plays a centre role in competition. And ?innovation? is a key which comprises collaboration among competitors.

Innovative companies collaborate externally though joint ventures, alliances or less structured forms of networking. Some innovative companies value internal and external competition, not being cut-throat competition with high secrecy or fierce, only to stimulate higher performance in competing projects where the losing teams are happy to support the winning team on their way forward. In such a company, with a positive competitive culture, to lose is not equal to losing face or missing out on the next potential promotion. In companies that believe in collaboration, people cannot help but to collaborate (Mayle 2006).This concept can be seen apprentin the Ripple Effect (IDEO 2009) project model from IDEO where different organizations collaborate to provide inspiration, deign and business support to entrepreneurs in development of new offering. I have attached a video below showing how companies are collaborating to provide clean drinking water for the poor

The Ripple Effect in India, by IDEO and Acumen Fund from IDEO on Vimeo.


Christiansen J. A., 2000 "Competitive Innovation Management: Techniques to Improve Innovation Performance", Publisher: Palgrave Macmillan

IDEO 2009, "Ripple Effect: Access to safe drinking water for Acumen fund and The Bill & Melinda Gates foundation" [Online], Available:

Mayle D. 2006, "Managing innovation and change", Publisher: SAGE

Nagel S. 2001, "Handbook of Policy Creativity: Creativity at the cutting edge" Publisher: Nova Publishers,

Social Media and Networks

In the last few years, the number of users accessing the internet is expanding and an exponential rate. Users looking for any kind of information are searching the internet. Organizations are shifting or starting businesses online spending a lot of many to get traffic to their site. But with the hype of internet and web 2.0, these companies are using the internet to market and advertise their products and services through social media channels like facebook, twitter, youtube etc. It is the most low cost promotion method available today. Now a day marketers are using social media as their primary advertising platform as it is able to capture mass audiences. It's somewhat similar to TV advertising . In our business plan this social media and networks is playing an important part in advertisement.

Companies' are more concerned about their social graph ranks about products and services then how Google ranks them. The social media channels are creating content for the SEO (Search Engine Optimization) and SEM (Search Engine Marketing) to work for the companies' social media strategy. The content creation strategy should be aligned with the social media strategy to drive users towards taking action ( PR News 2009)

There are three kinds of people who doubt the efficiency of social media.

* Who are unaware about social media.

* Who are interested in it but do not have knowledge to use it

* Who doubts the social media strategy could benefit the business or their website(Jue et al. 2009)

Social media should be included in the brand strategy because it will help consumers in the adoption process, laid out by Rogers (1962), which are (1) awareness, (2) interest, (3) evaluation, (4) trial, and (5) adoption, by spreading the awareness of the brand and answering the questions about the benefits the brand will provide. Social media will communicate the brand at all emotional levels. Furthermore, feedback will help in improving and evolving the brand. Bauknecht (2005) says people are believing and trusting more on peer recommendations than an advertisement.

According to Warner (2008) social media networking might be just waste of time because the amounts of time individuals are spending on it. According to a survey, there is an estimated cost of £6.5 billion per annum for loss in productivity and high bandwidth usage Britain's social media fanatics spent like 12 hours per week on social media websites wasting value time. Young generations are also spending so much time on it. It was already hard to get the video game generation to focus on their studies.

Lets see how much time it takes to spend on social media

I am not a blogger or a social media fan. I did not have a Facebook account. I belonged to the category who doubted that social media could not benefit the business as advertising does. Now for me realizing the potential of social media was a huge eye-opener. I can't imagine how I could be ignoring it even after noticing all the online websites and other friends are on some kind of social media. However, after attending the Presentation of Chris Ramsbottom, former student of LUMS, and listening to his experiences regarding convincing the top managed about the importance of social media made me realize that I am not the only one. Now I have almost all the major social media channels and to expand my knowledge further regarding social media, I just got a book "The Social Media Bible: Tactics, Tools, and Strategies for Business Success' 2009 by Lon Safko, David Brake and a digital copy of 'Social Media Marketing for Dummies' 2009 by Shiv Singh. Also an iPhone to keep in touch with the social media networks

However, it is important to understand how to utilize social media effectively by clarifying what actually is required from the social media either increasing sales or brand awareness of products or services. It will avoid wasting valuable time.


Bauknecht K., Pröll B. and Werthner H. 2005, ?E-commerce and web technologies: 6th international conference, EC-Web? Publisher: Springer Science & Business

Perez S. 2008, ?Real People Don't Have Time for Social Media? [online],

PR News 2009, ?SEO & SEM 3.0: Demystifying Social Media Optimization to Bring Consumers to You?, PR News, April 27, (accessed December 13, 2009).

Jue A.L. , Marr J.A. and Kassotakis M.E. 2009, ?Social Media at Work: How Networking Tools Propel Organizational Performance? , Publisher: John Wiley and Sons

Rogers, Everett M. (1962). Diffusion of Innovations. Glencoe: Free Press.

Warner B. 2008, ?Times Online : Is social networking a waste of time??[Online], Available:

Mass Production

I have been absent from the working log for quite sometime. Was really busy in group meetings, presentations and assignments etc. just finished my toughest assignment for SAP which is due day after tomorrow. I'm relaxed now and having a cup of tea and startedwriting my learning log again...

Mass Production

Honestly when I saw the week 6 questions I thought mass production will be boring and just time consuming, there would be nothing interesting about it except the word "mass production" but after seeing a clip of Charlie Chaplin at the time of lecture actually started my interest. I was fascinated to find out how industrial revolution began and how change actually happened. Most of the people live their lives and don't bother to look at the history like how we, as people, got to current situation. How we, as people progressed. It made me feel proud how we as human beings progressed through passage of time.

The Industrial Revolution consisted a period from 18th to the 19th century where changes on manufacturing, transport and agriculture had an enormous effect on social, cultural and economic conditions first starting in UK. UK is the place, in the 18 century, where first manufacturing operations were specifically designed to reduce production costs by specialized labour and the use of machines appeared ( Then afterwards spread to Europe, North America, and eventually the world.

It was interesting to read about Model T-- a model of car produced by the Ford Motor Company between 1909-27, first car to be successfully mass-produced on an assembly line. I was a little bit curious what is the significance of the letter "T". Just noticed it is 20th letter of the alphabet. So Model T is THE MODEL OF THE 20TH CENTURY. (Babylon dictionary)

The main characteristics of "MODEL T" is the Standardization which lead to economies of scale during production, Division of Task which led to higher productivity.

Specialism which lead to easy training of new workers in different departments

Payment procedure, more parts produced the more money earned, led to overcoming the problem of high labour turnover

Concentration where specialist making the decision instead of Workers

Interest to read more about Model T and suggestion from Mary on "The limits of Fordism" led me to a paper on"The Rise and Decline of Fordism and the 'Sea-Change' in the Technological Advantage of Nations" 2004 by Andrew Tylecote and Giovanna Vertova, who states that in the manufacturing industry there are 3 functions

1. Design

2. Manufacture process of turning inputs into outputs

3. 'co-ordination' management

The larger the firms became, under Fordism production, the more 'co-ordination' was required; the faster technology and products changed and the pace of change was steadily accelerating, the more 'design' was required. It is to be noted that Fordist production methods was actually derived from the transformation of previous organization of production notably Taylorism. It was actually Taylor in his Bethlehem Steel plant where craftsmen were subordinated directly to engineers who allocated tasks to workers. Fordism production, in Kaplinsky's words, had distinct spheres.


Mass production system of Fordism was marvellously efficient and the model can be valued by the concept of ?transformation mechanisation' which has 3 stages referred by Coombs (1983).

Stage 1: The 'dedicated' machine tool, lower labour cost and higher production

Stage 2: The assembly line of continuous flow mechanical moving of materials between different stages of transformation.

What Fordism lacked was the 3rd stage i.e. Control mechanisation which is the substitution of machines for the human brain in the direction and supervision of the productive process.What was needed, for control mechanisation, was machine intelligence and that was the next techno-economic paradigm-- development of ICT. Later on flexible form of mechanisation was made possible by Computer-aided manufacturing. Computer aided manufacturing which later on joined with computer aided design. The use of ICT in the process of coordination was increasingly recognized which led the development and diffusion of internet.

Coming from a family business of clothes manufacturing, for me I understood perfectly about the boredom the workers experience for constant doing the repetitive work in mass production.Even after the policy of wages were based according to the amount of output a worker does i.e. wages paid for each item of work they do, the motivation increases but eventually comes down and the element of boredom re-appears.

By looking at the theory of the law of Diminishing Marginal Productivity of labour (sometimes called the law of diminishing returns). It states that the increase in output due to units increase in labour working hours will eventually decline.(Jacques, Ian 2006)

Which means if a worker is working 10 hours in a day ,His efficiency in the 1st hour will be higher than the 2nd hour. 2nd hour skill of production is more than the 3rd hour. In his last hour that is in the 10th hour his efficiency will be very very low .It may be zero or negative. Which was apparent in the case of Charlie Chaplin in the MODERN TIMES movie clip, that was seen in the class, when he lost his mind after repetitive working of loooooog hours and his productivity became negative

In the book Mathematics for Economics and Business by Jacques, Ian gives an exmple: In the simplest case output, Q, is assumed to be a function of labour, L, and capital, K. Moreover, in the short run the input K can be assumed to be fixed, so Q is then only a function of one input L. (This is not a valid assumption in the long run and in general Q must be regarded as a function of at least two inputs. Methods for handling this situation are considered in the next chapter.) The variable L is usually measured in terms of the number of workers or possibly in terms of the number of worker hours. We define the marginal product of labour,MPL, by


-------- = MPL


Between 0 and L0 the curve bends upwards, becoming progressively steeper, and so the slope function, MPL, increases. Mathematically, this means that the slope of MPL is positive: that is,

d(MPL )

--------- > 0


Now MPL is itself the derivative of Q with respect to L, so we can use the notation for the second derivative and write this as


---------- > 0


Similarly, if L exceeds the threshold value of L0, then Figure 4.17 shows that the product curve bends downwards and the slope decreases. In this region, the slope of the slope function is negative, so that


------ < 0


The law of diminishing returns states that this must happen eventually: that is,


------ < 0


for sufficiently large L.


To increase the productivity of a labourer and to reduce the cost of production. Reducing working hours of a shift is necessary.


Andrew Tylecote and Giovanna Vertova 2004, "The Rise and Decline of Fordism and the 'Sea-Change' in the Technological Advantage of Nations"

Babylon dictionary

Jacques, Ian 2006, Mathematics for Economics and Business, Pearson Education UK, p. 268-271

Kaplinsky (1984) "Fordial Organisation Of Factory Production", p. 24

Perez Coombs. (1983). "Structural Change and Assimilation of New Technologies in the Economic and Social Systems", Futures, 15(5): 357-375.

disruptive technology

It is a term which Christensen described as a new technology in this book "the innovator's dilemma" by categorizing new technology into 2 categories:
Sustaining technology - incrementing improvements in an existing established technology
Disruptive technology - new technology, may not be perfect but appealing to a limited audience. Has initially little value and does not create attention among the dominate players in the industry. Disruptive technology usually targets new areas within the current industry with a new approach and could dominate an existing market.

I will give 2 examples of disruptive technologies. Firstly, in my technology module, I found cloud computing a very disruptive technology. Its potential value cannot be ignored or denied. There were number of phases involved in the evolution of cloud computing, which include application service provision (ASP) and Software as a Service (SaaS) (Velte et al. 2009). In 2006, Amazon launched a commercial web service called Elastic Compute cloud (EC2) allowing small companies and individuals to renting I.T. infrastructure and computing power to run their own computer applications (LaMonica 2006). Cloud computing service is risk free and Easy to use. One does not have to buy anything or invest hugely into it. The technology is flexible; adjusting to the company's requirements and also easily scalable; fulfilling the needs of the company's growing demands.

Just imagine in an industry where customers, had to pay upfront for a technology for which they may get 20-30% use, could use this cloud computing technology model and pay only for what is used and when it is used. It can be seen that the barriers to the entry of customers, around cost and complexity, are going to come down so dramatically that the cloud is going to open up much more usages of IT for small medium businesses. Emerging markets can be seen in countries, where just the cost and complexity have been barriers. Developing countries like Brazil rushing, China, India and beyond are going to end up using the technology in ways they have never been able to use it before and in ways we have never seen before.

The second disruptive technology I found was the Google announcement of Google Navigation Map product for FREE, which was one of the innovation searches in our workshops. This product is used by connecting to the internet to Google cloud computing technology providing all the services of a traditional Sat. Nav and much more. By looking at the stock market of Garmin, one of the leading companies of navigation system providers in the GPS industry, we could actually see the market reaction to such a disruptive technology in just a couple of days from announcement, last year, in October 2009. TomTom and other companies are also affected.

This product is targeted to price sensitive customers with offering excellent features and capabilities for 'FREE'.

With good understanding of the term disruptive innovation and disruptive technology, broadered my view of anticipating whether any new technology, i came accross, will prove disruptive or not.


* Christensen C.M. 1997, 'The innovator's dilemma: when new technologies cause great firms to fail', Publisher: Harvard Business Press

* Gurley B., 'Google Redefines Disruption: The "Less Than Free" Business Model' [Online],Available: [Accessed December 1, 2009 ]

* LaMonica M. 2006, "Amazon servers, starting at 10 cents an hour" [Online], Available:,-starting-at-10-cents-an-hour/2100-1038_3-6109202.html [Accessed December 1, 2009 ]

* Velte T., Velte A. and Elsenpeter R. 2009, "Cloud Computing: A Practical Approach", Publisher: McGraw Hill Professional

disruptive innovation

The term Disruptive innovation is thought up by Clayton Christensen, who describes the term as a process by which a product or service application starts from the bottom of the market and manoeuvres up in the market displacing established competitors. (christensen, 2009)

I read an interesting book "The innovator's guide to growth: putting disruptive innovation to work" by Scott. It describes the disruptive innovation theory: the market consists of customers some of which are at a high end, very demanding, and willing to buy high-performance, expensive products. While others are low end and satisfied with simple and inexpensive products. Customer's lives are not changing as fast as most organization or companies are innovating. These fast innovating companies end up producing goods, "sustaining innovations", that are too good, too expensive and sometimes too inconvenient for many customers.

The disconnect between the capabilities of a product and the customers' ability to use them opens up an opportunity for innovators who brings to a market a disruptive innovation that is simple, convenient, accessible and affordable. Thus, changing the game of the market. The disruptive innovations can be broadly classified into two types: new-market and low-end disruptive innovations. The new-market disruptive innovation, which succeeds because they bring previous non-consumers into the market, whereas a lower-end disruptive innovation is aimed at mainstream customers for whom price is more important than quality.

Disruptive innovations can be generally be divided into new-market and low-end disruptive innovations. A new-market disruptive innovation is often aimed at non-consumption (i.e., consumers who would not have used the products already on the market), whereas a lower-end disruptive innovation is aimed at mainstream customers for whom price is more important than quality. Low-end disruption has occurred repeatedly in retailing.

Disruptive innovation will result in major changes, but they don?t often rely on technological breakthroughs. In fact, many times the technologies are quite trivial. It?s the "Business Model" -- the way a company organises and acts that drives disruptions. Taking the example of Wal-Mart, who opened their first discount retailer in 1962, they didn't start to sell goods that are different from their competitors, they created a new way to organize and act that allowed them to make money at low price points. So it?s not often the technology but is the businesses' model.

I read about many other models that shows the difference between disruption and sustaining innovation like the personal computer, eBay online model etc. the most interesting one is from the video games' industries. Contrast the Sony PlayStation 3 product with the Nintendo's Wii product. The PS3 is a technological marvel. The best game play you can find, great graphics, the blue ray disks in the player. It is aimed at the heart core gamers, the most demanding consumers in the games' industry. Now Nintendo has innovated in a very different way. Instead of introducing games with better graphics Nintendo made it simpler, made it more accessible. The big innovation is the controller. Nintendo is consciously targeting the non-gamer and by doing so it has greatly expanded the market for the video games by reaching people that Sony wouldn't even think about targeting. Not winning it by doing it better but by winning it by doing it differently. (Ali Farhoomand, 2009)

In the EBIN 504 innovation module understanding of the concept of disruptive innovation helped me understand more how to look at the market or industry to Spot Disruptive Innovation Opportunities which had helped me in my EBIN 503: Business Planning Module where we had a workshop for idea generation for starting a business.

I also in thebook "The innovator's guide to growth" I learned that, firstly we had to look for a market or industry where there is some kind of constraint that inhibits consumption where there is something that makes it difficult for people to solve problems in their life. Sometimes they don't have skills, sometimes they don?t have money, and sometimes they can't access the solution and sometimes its just takes too long. Finding one of those barriers to consumption and see how you can obliterate it. Secondly we had to identify where people have important and unsatisfied jobs to be done. Where are problems that a customer faces that they can't adequately solve today. If we can find that frustrated customer and ease their pain we often times have the ticket to disruptive innovation. Then after we have looked for the constraint innovation and targeted that job to be done, then we think thought about how we can play the innovation game differently. With better understanding of the concept of "disruptive innovation" theory, I understood its not about doing it better, its about making it simpler, cheaper, more accessible, more affordable. That is what disruption is all about. (Scott D. Anthony, 2008)


Ali Farhoomand, H. J. (2009) Nintendo's Disruptive Strategy: Implications for the Video Game Industry. Feb 10, 2009, Harvard business publishing.

Christensen, C. (2009) Disruptive Innovation.

John Bessant, J. T. (2007) Innovation and entrepreneurship John Wiley and Sons, p. 229-34, 247

Scott D. Anthony, M. W. J., Joseph V. Sinfield, Elizabeth J. Altman (2008) The innovator's guide to growth: putting disruptive innovation to work, Harvard Business Press


Platform in simple words means pictures of major subsystems and interfaces between these subsystems. The platform innovation is defined as one that leads to the practical application of fundamental innovations. Such innovations normally are launching pads for a new industry

I read a journal "Platform-Innovation drive enterprise growth". It was very fascinating to see how "Platform thinking" for physical products played an important role in the company's transformation of its traditional mainframe business to a Web server business. Also product platforms require accurate operational definition without which it's difficult to achieve progress, but many organizations are lacking in applying this definition. New product strategy must be remodeled to capture the degree to which common architectures and subsystems will be leveraged across existing and new market applications, as well as the timing of product introductions. (Marc H Meyer ad el. 2001)

In the EBIN-521 e-Technology module I have learned that the Internet has evolved from web 1.0 to and Web 2.0 to become an increasingly important platform not just for economic development, communication, educational purposes, and as an area for entertainment, but also as a place for those who wish to express their opinions and ideas freely and is now considered "web as a platform" which doesn't have a hard boundary


from the above figureabovewe can have an idea of "Web as a platform".Web 2.0 can be conceived as blocks of principles and practices that are interconnected system of sites, where software and web applications are built upon the Web as opposed to upon the desktop. The uniqueness of web 2.0 is "customers are building your business for you." (Tim O'Reilly 2005)

"Everything is platform in web 2.0 era. I found this comic very interesting."

In the EBIN-521 e-Technology module and EBIN-503 Business Planning & Finance Planning we are going to plan to have an open API (application programming interface) as part of our e-business. "Open API" is a platform innovation concept, where other developers uses Open API to come up with a new combination for an innovation, which leads to more innovation. Application Programming Interface (API) is an interface that a software program implements in order to allow other software to interact with it; much in the same way that software might implement a user interface in order to allow humans to interact with it. (Wikipedia cited: on Nov 2009).For example In September 2009 announced that ithad 16 new Mashups in their "Mashup Directory" and 28 different APIs were used to build them in different combination ( 2009). At the website link provided below in the reference shows a list of API used in different meshups

An an exampleof a web "" ( is a web application for Managing Social Networks. It is linked with 46 social websites like Twitter, Facebook, myspace,blogger, beboetc. You can create an account with and link it to any social websitefrom the list of 46. And if you want to post something like any news or update you can just post once on and it will posted to you all the LINKED services you added to your account. Now provides OPEN API. Byusing their opi functionality any web-developer or business organization can build their business

In our business plan, we will be having an OPEN DATA API and TRANSACTION API in our eBusiness as a open platform for other developers build or develop their web-application or software , hence building their business using our platform or in other words "building our business for us"


Make platform innovation drive enterprise growth
By Marc H Meyer, Paul C Mugge, Publication title: Research Technology Management. Arlington: Jan/Feb 2001. Vol. 44, Iss. 1; pg. 25, 15 pgs

John Musser - 2009
"28 APIs Used This Week: Open Government, Wikipedia, New York Times, and Football Nerds"

Realinnovation- 2008 2007

Tim O'Reilly
Design Patterns and Business Models for the Next Generation of Software - 2005

understanding Dominant Design

Dominant Design

"a product configuration which endures; a particular combination of product features which appears to satisfy the market and survives, without major change, for some time". (Don Bradmore 2004)

Often in dominant design route there are many competitors involved each one introducing many products with special features but the firm that are able to imitate the dominant design survive while those that cannot fail. The design typically remains a standard product model for many years during which firms compete on lowering costs through process innovations. In the technology industry number of alternative design are often introduced by firms e.g. Microsoft - Windows, Apple Inc. - Mac OS and IBM - OS2). Updated designs are introduced later incorporating incremental improvements. After sometime the architecture that becomes most accepted as the industry standard may emerge e.g. Microsoft Windows. Dominant designs might not be better than other designs in the market place; however they fulfil the key requirements. Many technologies, currently in use, struggled with similar competing products before gaining the dominant design.

According to Markides and Geroski (2005) until the standard is emerging consumers are affected by issues of choice and have to learn what the innovation is for and how they will use it. Consumers needs to understand the innovation and how the new innovation will fit with their consumption patterns and values.

In my home country Pakistan in the early 90s it was slightly different because Microsoft as an OS introduced in the country when it became dominant. Before that there was no alternative choice. Microsoft OS was widely used because it wasn't confined to confined to hardware like Mac is with Apple Hardware. There weren?t any wide usage of Mac and OS2. First time I heard about Apple and Mac when I say a bibliography documentary on ?Steve Jobs? co-founder of Apple, in the mid 90s. Linux has become useful Operating System product and are being widely used. But even now the majority general public are aware of only Microsoft Windows OS. I myself was use Microsoft Windows. I was happy with Vista even after so many problems with Vista and wasn?t found of upgrading to Windows 7 but when various features was discussed about Windows 7 in the class I upgraded my OS to windows 7. It?s an going process for maintaining its dominant position by evolving continuously with adjustment and improvements being made to the product. This improvement becomes part of the standard of that dominant design with time. In my opinion it is very unlikely that in the near future that any other OS will become dominant. Google is developing an operating system (OS) This is the first time we have had a truly competitive OS on the market in years. This is potentially disruptive and is the first real attempt by anyone to go after Microsoft Google OS, launches its own OS (BBC News 2009). I think Google's key success element would be to completely abandon their current direction, build a hypervisor based OS instead, and provide a product that can virtualizes EVERYTHING. Meaning Google will have taken a revolutionary step forward if Google OS could run all Apps of Apple, Linux, and Windows OS on top of Google based hypervisor. They might capture some good market share but will the product diffuse? Or will it become a dominant design in the future?...very unlikely but for an accurate answer we have to wait.

On the other hand The emergence process for dominant designs has typically been viewed as a black box process involving a sophisticated interaction of technological and non-technological factors (Lee et al. 1995). A dominant design does not always emerge, even many years after product introduction. Game consoles are an example: Microsoft Xbox, Nintendo Wii, and Playstation 3.



* Markides, Constantinos C & Geroski, Paul A. (2005) Fast Second How Smart Companies Bypass Radical Innovation to enter and Dominate New Markets.

* Google to launch operating system -- By Maggie Shiels - Technology reporter, BBC News, Silicon Valley , Wednesday, 8 July 2009

* Lee, Ji-Ren, Donald O?Neal, Mark Pruett, and H. Thomas. 1995. Planning for dominance: a strategic perspective on the emergence of a dominant design. R&D Management 25/1: 3-25.

understanding diffusion

It was very interesting to know that diffusion process of innovation explains how, why and at what rate innovations (4P) spreads. And how an innovation is understood, by individuals, in different societies. Rogers has defined essential characteristics of innovations itself that influence an individual?s decision to adopt or reject an innovation

1. Relative advantage- has the innovation improved from the past?

2. Compatibility- is it consistent with the existing needs and values?

3. Complexity- is it simpler for the individual to adopt?

4. Trialability - Can I try it first by avoiding potential risks?

5. Observability- can I see its benefits?

The individual goes through Five stages of the adoption process of innovation which correlates with the evaluation of the characteristics of innovation

1. Knowledge- do I have enough knowledge of the innovation?

2. Persuasion -- I need more information about this innovation!

3. Decision -- I know the pros and cons of using this innovation. Now should I buy it or reject it?

4. Implementation- now using the innovation can I see is usefulness? And should I further search for information ?

5. Confirmation- this innovation is Great! I will continue using the innovation.

Furthermore Rogers also categorized adopters into five different segments: innovators, early adopters, early majority, late majority, and laggards. But the most important element in the continuity of innovation diffusion depends upon the continual 'Reinvention' or 'Redevelopment' of the innovation; how it evolves to meet the needs of more demanding risk-averse individuals in the diffusion process.

Looking at what I mentioned so far made me realize how I opted an innovation process to start a business online on eBay. eBay transformed trading from the real world to the virtual world forming a new eMarketplace. Although I come into 'late majority' segment in adopting eBay as a process. I went through all the phases mentioned above by evaluating the characteristics of innovation itself and stages of adoption. Although I was aware of the innovation quite a while ago but the adoption process took a while to reach to the confirmation stages. If I had the present knowledge at the time, when I was aware of the eBay innovation process, the adoption process might have been faster.

The reason why I mentioned the above theory of diffusion because it really intrigued me because all rational people goes through this process in one way or the other, but knowing the platform of process will guide me in future to evaluate any arisingopportunity.

Further info Lec 3

The theory of innovation diffusion analyses and provides explanation to individuals, from any discipline, a theoretical abstract prototype for understanding the process of diffusion. An innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoption. The perceived newness of the idea for the individual determines his/her reaction to it (Rogers, 1995). There are numerous variables is involved in the diffusion process. It occurs in an unpredictable manner; identifying adopter-consumers is difficult, measuring influencers in communication social processes is complicated. So having a diffusion process model is difficult (Roberts, Thomas S.1967) 1. Rogers, (1993 p.5) provides a simplified model of diffusion process by which an innovation is communicated through certain channels over time among the members of a social system. Thus, the four main elements of the theory are the innovation, communication channels, time, and the social system which offers three valuable insights into the process of social change:

1) What qualities make an innovation spread successfully?

2) The importance of peer-peer conversations and peer networks.

3) Understanding the needs of different user segments.

1) What qualities make an innovation spread successfully?

Firstly the theory focuses on evolution or ?reinvention? of products and behaviours which fits the need of individuals and groups. Roger recognizes five qualities that determine why certain innovations spread more quickly than others while others fail.

1. Relative advantage,

2. compatibility,

3. complexity,

4. trialability

5. observability,

The continuity of innovation diffusion depends upon the continual ?Reinvention? or ?Redevelopment? of the innovation; how it evolves to meet the needs of more demanding risk-averse individuals.


Secondly adoption of innovation is uncertain and involves risk management in its early phases. Interpersonal marketing methods like advertising and media stories may spread information about new innovations, but it is ?peer to peer conversations? that cause them to be adopted. Early Adopters are exceptions in this rule are. They are confident, better up to date about the innovation and being financially secured perceive risk as low. Their Short term preferences might have disproportionate impact on the subsequent development of the innovation resulting abandonment of superior alternatives (Bessant & Tidd (2005) p227)3 .Whereas the rest of the population perceive high risk in change and resist change.By trusted peers they can come to know the benefit of adopting innovations.

Peer-peer communication leads to ?peer networks?. Peer-networks are becoming very popular and useful method in innovation diffusion by using influencers like opinion leaders and ?viral marketing?.

3) Understanding the needs of different user segments.

Population can be divided into five segments according to their tendency to adopt specific innovation.

Innovators: venturesome, cosmopolite, risk-taking, information seeking, with a higher financial status.

? Early Adopters: greatest degree of opinion leadership, respected by other members of social group. Strategies with a motivational emphasis may be most effective at getting them involved in the diffusion process.

? Early Majority: deliberate, adopt new ideas just before the average member of a system.

? Late Majority: skeptical, adopt new ideas just after the average member of a system. The pressure of peers is necessary to motivate adoption. Intervention strategies that help them to overcome barriers are needed to get them to take up the innovation.

? Laggards: traditional, last in a social system to adopt an innovation, pays little attention to the opinions of others.

it is a systematic balance of the following to find out how much and to what extent, diffusion and adoption of an innovation

Characteristics of "innovation" VS Characteristics of "individuals or Organizational adopters" VS Characteristics of "Environment And Institution"

(Bessant & Tidd 2007 p.342) 5

There are various barriers preventing the diffusion of innovation

- Economical barriers ? Personal cost vs social benefits, access to information, insufficient incentives

- Behavioral barriers ? Priories, Motivations, Rationality, Inertia, propensity for change or risks

- Organizational barriers -- Goals, Routines, Power and influence, culture and stakeholders

- Structural barriers ? Infrastructure, sunk cost, governance

- Financial / Business barrier - Is the benefit worth the investment?, Who benefits?, Who pays?, Financial rewards

- Structural Barriers-- Structure of the health care system, Relationship between payers and providers, Nature of the marketplace ? multiple vendors, Lack of system and data interoperability, Regulations ?data privacy and confidentiality

- Cultural Barriers, language, religion, history, requires acceptance in a larger cultural norms and others

- Technological barriers: not demanding too much in the way of new skills

- Technical and Professional Barriers -- Lack of professional work force, Lack of strategic organizational process to develop commitment of all stakeholders


The most fascinating term I found is the "tipping point".. Small events can have a "nuclear reaction" effect resulting in early-adaptors to the diffusion of innovation. It has become a popular idea in encouraging diffusion once it is understood. Malcolm Gladwell, (2000)6 explains the tipping point as a phenomenon of social change as a result of a certain influential individual whom he called the ?mavens,? ?connectors,? and ?salesmen.? There are some similarities with Roger?s theory, for example, they both need the early adopter to help diffuse.


1) Robertson, Thomas S., U. California, Los Angeles

Title: The Process Of Innovation And The Diffusion Of Innovation.

Source: Journal of Marketing, 31(1), 1967. pp. 14-19.

2) Les Robinson

Title A summary of Diffusion of Innovations

Source: Article A summary of Diffusion of Innovations

3) Bessant & Tidd

Source: Book: Managing innovation 3rd Edition 2005

4) Everett M. Rogers,

Source: Diffusion of Innovations, Fifth Edition 2003, Free Press, New

York, p221

5) Bessant & Tidd

Source: Book: Innovation and entrepreneurship 2007

6) Gladwell, M,

Source: Book: The Tipping Point: How Little Things Can Make a Big Difference, Little Brown and Company, 2000

Lecture 3

It was very interesting to find out that there is actual a method by which a person can have an approximation on, how much and to what extent, diffusion and adoption of an innovation. it is a systematic balance of the following:


in otherwords innovation adoption and diffusion is effected by segmented Individual's perceptions of the characteristics of "innovations", i.e.Relative advantage, compatibility, complexity, trialability and observability, in a social and economical environment. Process of commercialization and diffusion also effects adoption of innovation.

Talking the innovation search "New Camera promises to capture your whole life", using the above methods, we have measured the business potential of this innovation and its diffusion expectation.Making me realizetheimportance of this diffusion process. Hence innovation is a necessarily chaotic and uncertain process in its early phases but short term preferences of early adopters might have disproportionate impact on the subsequent development of the innovation resulting abandonment of superior alternatives today never expected for the class to be so interesting.. there was bombordment of new innovation types going on in the world..there was no wiki search relating to position innovation. i was tired that day but i felt so fresh in the class. Understanding concepts and theories by applying them in real world in real-time was really refreshing. can't wait for the next class

group name selection criteria

The biscuit treat is a good idea but tutor should?ve mentioned that the group choosing the best group name will get those chocolate biscuits. I?m still thinking on what criteria the tutor decided that Octopus or octoplus or octuplaas is a best name. The tutor still didn?t get the Group name correct I think neither did anyone. The tutor should?ve asked every group the reason for choosing such a name.

We choose our group name ?Lollipops? because our group are made up of people coming from different cultures, colors, languages, values and tastes ??..just like lollipops comes from different flavours, styles, colors and tastes. And above all we found our group to be very sweet ?.. I really wanted those chocolate biscuits.



Lecture at 8th Oct.

It was interesting to find out that the term ?innovation? has being going on since the stone ages in fact it made me realize that innovation is a basic human instinct which every human being are born with. I thought innovation is a concept that came into existence after the formation of civilization.

Two tutors in one module delivering the lecture at the same time is interesting and this course sounds really valuable and important but the course structure is quite confusing. I am still trying figure out how this course will enhance the innovation knowledge or aspect because we got our 1st assignment to find OURSELVES some news relating to innovation not being more than 1 week old and I still don?t know entirely what innovation REALLY is and how to identify it. All I know so far is taking something already existed and improving it to do better. It must surely be something more than this. I should?ve read a 700 pages book regarding ?basics of innovation? before attending the first lecture