MIST 2090 1st Edition Lecture 3 Outline of Last Lecture I. This is the first actual lecture that required note-taking Outline of Current Lecture II. What Is Innovation?III. Digital InnovationsIV. Innovation & Creative DestructionV. Managing InnovationA. PivotingCurrent LectureII. WHAT IS INNOVATION?- Doing something new, but in organized setting and manner- Important to differentiate invention from innovation- Innovation creates value out of invention Example: In 1968, Spencer Silver tried to produce a glue to hold airplane parts together. Glue failed for airplanes, but became the “stickiness” that holds sticky notes together. Spencer worked for 3m and patented these post-it notes. - Innovating involves creating some form of technology system, BUT you must go out and sell it in order for it to be successful- People, process, information, & technology need all of these for innovationIII. DIGITAL INNOVATION- Ex: Apple’s Ipod when apple first created the Ipod in 2004, their commercials were revolutionary. In the commercials, the words “Ipod and Itunes” were often shown together to show the buyer that these two systems were used in combination. o Apple was particularly different from normal MP3 players because they convinced the record companies to let apple sell their single songs for $1IV. INNOVATION & CREATIVE DESTRUCTION- In order for something to take over, something else must “die”- Automotive destroyed the carriage systemo Carriages “died”, and cars took overThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Joseph Shumpeter made the idea of creative destruction well known- Creative destruction and S&P 500 company o Companies only last 6 years on S&P nowadays, whereas they used to last 20 yearso Companies that left recently: Wendy’s, Radio Shack, Circuit Cityo Companies that entered recently: Netflix, Amazon- Attackers advantage: when the new, upcoming company has some sort of advantage over the older company o Example: Blockbuster vs. Netflix- Defending against innovations involves 3 characteristics:o Create, innovate, trade Proctor & Gamble (P&G) does thisA. They pivot in order to create, innovate, and trade successfully- Ex: Instagram used to be all kinds of different things, when the company reduced it toonly photo sharing they blew
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