Julie Feit Almberg, Susan Hilbolling, Morten Grau Jensen, Floor Nijs and Mathijs Voorend Delft University of Technology, The Netherlands
In this paper design and user driven innovation strategies (DDI and UDI) are investigated from the literature and from a case study in order to answer the following research question: what are the differences between UDI and DDI and what implications does this have regarding design management? Literature helps explaining the main characteristics of both approaches as upper management domain and product management methods, respectively. DDI, aiming at changing the socio-cultural regime by offering proposals for new, radical product meanings has a higher possibility of competitor differentiation. UDI takes its center around user's needs which leads to products within existing socio-cultural settings, thus lower risks but also lower differentiation abilities. As product manager these factors must be taken into consideration when deciding on innovation strategies, and as the Philips case study shows, different strategies might be applied for different purposes within the same company depending on the risks/opportunities balance.
Design Driven Innovation, User Driven Innovation, Innovation Strategies, Design Management, Philips, Innovation Matrix 1 INTRODUCTION Innovation is viewed as a primary means for value creation for companies to disrupt the competition in markets and gain a competitive edge (Moran and Ghoshal 1999), and can e.g. be used by design managers to renew value of a product portfolio. The success of an innovation depends fundamentally on its commercial value (Gellatly and Peters, 1999). But new products may fail to meet consumer expectations or the competitors might be able to offer comparable products with little delay — thus benefits from innovating are substantially diminished and provide little financial return (Gellatly and Peters, 1999). Therefore companies need different kinds of innovation strategies for different situations and envisaged future market positions. This paper examine two different types of innovation strategies, design driven innovation (DDI) and user driven innovation (UDI) in order to answer the following research question: what are the differences of UDI and DDI and what implications does this have regarding design management? Even though both methods are well described in literature there is little literature about the comparison of the two methods. In this paper the two strategies are first defined, and then main characteristics, applications and differences between the strategies are described from the design managers’ perspective through secondary literature. Secondly, a case study of Philips’ approach to innovation serves to illustrate the main aspects of innovation strategies in practice. Finally, we will list three propositions for further research. 2 DEFINITIONS
2.1 Innovation Product innovation means that a product introduced should be completely new to the market. Innovation can be incremental and radical innovation (Verganti, 2009). The incremental innovation is a market-pulled innovation (Verganti, 2009) which means it is based on what the customers want and with the use of existing technologies, targeted towards existing markets (Reid, 2004). Radical innovation is a technology-pushed innovation. It is about giving changes to existing technologies and marketing infrastructure and might force the companies to use new problem solving approaches (Reid, 2004). 2.2 User Driven Innovation In this paper the term user driven innovation will be used. We define it as a process in which the user will be involved to get insight of their needs. This definition is based on other literature where terms like User Oriented Design (UOD) and User Centered Design (UOD) are used to describe design processes alike. UOD combines user insights with technology to create products...