The first phase was to shift to assemble to order planning (ATO), the second was de-integrating the manufacturing facility, and finally, rationalization- that is reducing the range of family of products to two that are most profitable for the company. These are innovations to be implemented depending on the market conditions. There were factors and aspects of innovation to consider. Firstly, what type of innovation is needed to proper address the main objective of the phase changes, secondly, when is the right time the innovation should be implemented in the market life cycle, thirdly, an analysis on the implication of change in the supply chain, and finally, what are the trade-offs to take into consideration and how to address them to optimize the effect of phase changes.
The planned phase changes of AB Machine Tool is meant to basically address profitability and the ever challenging market. The need for this is inevitable considering the fact that the market share of the company is getting smaller because of fierce competitions. The need to attract more investment is one of the options in order to maintain the economic viability. But to attract more investments means showing the potential investor the strength and capabilities of the company through changing times and turbulent market conditions. …
It is for this reason, AB Machine Tool ought to consider the need to introduce changes tactically and strategically but how it will affect the entire organization positively remains to be seen. Timing, type of innovations, trade-offs are some of the things that we should be looking into and this is our objective.
Mundane Taxonomy of Innovation Types
Moore (2004) enumerated the different types of innovations and gave description to each one of them but more importantly gave emphasis when it is to be applied during the market life cycle of the organization. He also emphasized its importance as it determines the economic viability and existence of an organization. Figure 1, Aligning Innovation with the Life Cycle, shows the eight types of innovations and when each one is supposed to be implemented in the market life cycle.
Figure 1. The Market Development Cycle
The Innovations as defined by Moore (2004) are as follows:
Disruptive Innovation. Characterized by a great deal of attention particularly in the media, product appears as if from nowhere, creating a massive new sources of wealth.
Application Innovation. Takes existing technologies into new markets to serve new purposes.
Product Innovation. Takes established offers in established markets to the next level.The focus can be on performance increase, cost reduction, usability improvement, or any product enhancement.
Process Innovation. Makes processes for established offers in established markets more effective or efficient.
Experiential Innovation. Makes surface modifications that improves customers’ experience of established products or processes.
Marketing Innovation. Improves customers touching processes, be they marketing communication or