Platt Perspective on Business and Technology

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 1

Posted in business and convergent technologies, strategy and planning by Timothy Platt on November 19, 2016

As a baseline model for this discussion and to put what is to follow into perspective, let’s consider the manufacturing and sales cycle of a well established product, with an established, stable and predictable market and consumer base, and a predictable overall level of market demand there. This might be a steady year-around seller, or it might be a seasonal offering such as summer weight clothing or swimwear. Styles might change and certainly cosmetically for that product, but the ups and downs of market demand for it, and the timing of when demand for it would peak are at least generally predictable, as are overall sales volumes that would have to be prepared for going into any peak sales periods for it.

Let’s consider that garment production and sales example in at least a bit more detail, shifting to consider relevant products in general now:

• Standardized and at most cosmetically changing products and product lines are by their very nature at least relatively predictable and certainly for both overall likely sales levels, and for overall levels of categorically specific models and sizes of garments required to meet this flow of need. So to continue with my summer-oriented clothing and swimwear example, manufacturers of these items would know the overall volume of product they would have to be ready to produce and even before making any specific style decisions as to what to offer, and in a significant depth of detail.
• Cosmetic change and the less predictable fluctuations in what consumers will specifically want as to precise product design and style can be less predictable than overall production volume – but even there manufacturers can and do successfully plan out next season’s product models and styles, as much as a full year in advance and consumers buy from what they see on the racks in the stores that they buy from. So within-season adjustments in the levels of what should be produced and in what quantities, are for the most part just that: production level adjustments as real-world here-and-now sales data fine tunes ongoing production and sales planning and its execution to capture the potential value inherent in fad and related sudden demand.

Now what happens when you add more genuine, innovative change to this business model, and products and product types that are less predictable and less expected? My goal for this posting is to at least begin a discussion of:

• Innovation and disruptive innovation as they are conceived as initial product design concepts, and realized as marketable products,
• And of the level of change that markets expect and even demand in what is offered to them,
• And how these production place and marketplace drivers interact with and influence each other.

I have recurringly addressed the issue of uncertainty in innovation, and how this shapes risk and costs on the production side, and by extension price point asked for on the market side. I will have more to add to that set of topics as this discussion proceeds, but my primary focus is going to be on design, production and sales cycles and on how innovation per se, and disruptive innovation in particular shapes them. And I will discuss how this in turn shapes the business models that innovative manufacturers develop and pursue.

I will begin this with a more detailed analysis of my baseline standardized production business model, and with completely standardized product offerings as might be expected from a fully mature industry, where style and fashion do not play a significant role in consumer selection. I will then add in the perhaps lower-level change consideration of cosmetic change, and discuss how this in and of itself can have significant impact. That will mean challenging a basic assumption that I implicitly included in my first pair of bullet points at the top of this posting and in subsequent discussion from there up to here. And then I will add in “true innovation” and discuss the differences between that and cosmetic change, and how significant or not that difference can in practice be. And I will go on from there to consider disruptive innovation as a business shaping force.

One of my primary goals for this series is to fundamentally challenge some basic assumptions – including ones that I have at least occasionally followed here in this blog, as to what “cosmetic” and “innovative” actually mean. And I will do so in both manufacturing and sales, and marketplace and consumer terms.

And to add one more extremely relevant area of discussion to this emerging to-address list, I will couch a lot of this series in business optimization terms. And I note in anticipation of that, that business optimization, when fully considered only begins with stop-loss strategies and thinking in terms of risk and cost and friction and inefficiencies, and controlling and reducing them. Real optimization, and certainly in an innovative context has to be at least as thoroughly grounded in developing new and novel positives – efficiencies that are not simply linear extensions of any ongoing tried and true for a business and its success.

I will begin all of this, as noted above with a baseline model that I will go on to cite as an organizing framework for further discussion. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

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