Formulate a 200 word response for each of the following discussion posts regarding Innovation Portfolio. Provide insight and depth.
Discussion post 1:
The portfolio approach allows companies to create a short to long-term innovation planning strategy, making innovation vital in the companyâ€s future prospects. The innovation portfolio approach contains three segments; H1, H2, and H3. The H1 segment is a low risk, a short-term strategy that focuses on the core business. In order to be an innovative company, you must understand your core industry and competition. Once there is a focus on the core business, the company can look at expanding into the next segments. The H2 segment is more dynamic, contains medium/moderate risk. The H2 strategy is a reaching out strategy where the organization looks at building emerging businesses. The riskiest segment with the potential for the highest growth is the H3 segment. The H3 segment is a long-term, â€œleaping outâ€ strategy that creates new innovation and in turn creates new markets. Within the H3 segment, companies must be cautious in when and how they create their new market.
Companies must be careful when applying the risky H3 innovation approach because even the best companies in the world can fail trying to create a new market segment. An example of a failed product in a new market segment is the Apple Newton. Before the Itouch, Apple created the Newton personal digital assistant. Although the Newton was before its time and a flawed product, Apple tried to utilize a new market and the Apple Newton failed to successfully launch the product.
An example of an innovative product is the product Apple launched after the failure of the Newton, the Itouch. With newer technology available, Apple developed the iTouch, which revolutionized the way people use portable technology. The Itouch is an H3 product innovation revolutionized portable technology and the way consumers use media. Additionally, Itunes revolutionized its business model by allowing users the ability to purchase one song at a time. Lastly, after the itouch started reached the maturity stage, Apple modified and enhanced the Itouch into a new product line, the Iphone. The blackboard notes state that to be an innovative company you must understand life cycles to drive innovations and Apple does a fantastic job at offering discontinuous, new-to-world innovations, while also doing a great job of repositioning products and offering new applications to current products as they have done with transitioning the Itouch to the Iphone and creating a larger Iphone into the Ipad. Additionally, the Iphone also lead Apple into the a fee for service business model by leading into the cloud-based service market segment.
Utilizing the portfolio framework allows companies to determine the right opportunities for growth by keeping the company focused on growing existing business and planning into the future. In order to â€œkeep the lights onâ€ and stay innovative, a company must protect the core business and make sure to fend off any current or could be competitors. Furthermore, corporations need to invest in R&D in all segments of the portfolio in order to ensure success and growth in today’s ever-changing business environment.
Discussion post 2:
The portfolio approach to innovation is very important for organizations as it allows them to analyze the different innovation projects that will greatly benefit their company. It will also allow organizations to understand the risks and investment needs associated with each project. It gives organizations the opportunity to understand the resources associated with each project and whether or not this is something that they are able to reach with their current resources that are available. It can help the company develop and structure the strategic business goals and determine which project closely aligns with the organization’s vision and mission. Often when dealing with innovative concepts, there are a plethora of ideas that are out there that may be beneficial to the company, but it is important for organizations to be realistic in terms of what is achievable and attainable. The portfolio approach allows organizations to keep track of the purpose of the innovation and understand the costs associated with it.
In addition to understanding the overall risks and costs associated with innovation, the portfolio approach allows companies to really understand their opportunities for growth. It allows the companies to really understand what they can leverage to grow their existing business and determine how they can plan for their future. Often, many organizations need to understand how they can maintain their core business and innovation allows them to do so by finding ways in which to remain competitive against their competitors. A great company that uses the portfolio approach is Google. Google launched their NEST venture for their at home products and is also expanding into other products/business initiatives including the self-driving car and drones. The company moved into a portfolio type of approach to separate their more risky projects from the ones that are already in the cycle of maturity. This approach made it easier for investment opportunities and also allowed them to manage different projects simultaneously. In addition, the company stated that it allowed for the company to increase transparency for investors as the company has a variety of projects that are happening simultaneously that may be short term or long term (Verkasalo, 2019). With todayâ€s technology quickly evolving, it allows the company to make clear distinctions between their product and service offerings.
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