8.2. Product Development Within a Strategic Business Unit

The majority of product development within most corporations occurs within a SBU—which is responsible for its profit and loss, is aligned with industries, and has a well-defined value chain and customer distribution channel. Figure 8.2 illustrates an overall architecture for managing innovation. This section begins with a discussion of different parts of the architecture and ends by indicating the constituencies needed to manage the overall process.

8.2.1. Innovation Vision

The process begins with an innovation vision, which is consistent with the SBU strategy. A good example is the innovation vision that led to the development of the Hewlett-Packard (HP) inkjet printer. In the mid-1980s the market for HP's dot-matrix printer was being eroded by two market forces. Laser printers emerged, which were more expensive, but offered higher-quality printing, and began taking market share at the high end. Less-expensive dot-matrix printers were also emerging, which were reducing market share and margins in the low end. As a result HP, in September 1985, developed an innovation vision for the printing SBU to develop products with print quality closer to that of laser printers, but at a price that would compete directly with the lower-priced dot-matrix printers. Another example is how Sony created the first "Walkman®" by setting a seemingly impossible vision in 1952 of a "pocketable radio"—at a time when transistors were only being ...

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