Innovation Workout

1
Innovation Workout

• Design a video Game Console using Morphological
  boxes
• Write its Business Model and estimate the value
  from commercializing your innovation

2
Mismatch of Capabilities and Markets

• In the Mad Catz case we saw that Consumer Value
  (what consumers are willing to pay us) and
  Production Cost are often only loosely correlated
• Intelligent Design, then, requires that we give
  more weight to expenditures in some of the
  product Components than others

3
Your Task

• Design a game console using Morphological Boxes
• The next slide gives the features that your
  capabilities allow you to produce
• particular components (chosen from columns)
• with a given feature set (chosen from rows)
• Each adds some market value, and some production
  cost

4
Feature Choices
5
Unit Profit

• Your marketing department has determined your
  customers valuation of features (their
  Willingness to Pay or W-to-P)
• Your production department knows the cost of
  these features
• You need to choose the combination of features
  that will yield the greatest profit

6
Volume

• In addition, your accounting department has
  determined how overall price influences (reduces)
  sales volume
• Volume (units) (700 Sales Price)10,000

7
Feature Costs and Potential Revenue

• The attached sheet breaks a game console into its
  feature costs and potential revenue
• Profit depends not just on unit profit, but
  volume of sales
• The more expensive the entire product, the lower
  the sales volume

8
To Present

• What is the feature set of your most profitable
  product?
• What would you call this product?
• Is it high end, low end, or intermediate?
• Who are your competitors?
• What are substitute products for this one?

9
To Present

• How can you increase the volume of sales? (think
  of complements)
• Draw your Business Model with bubbles, arrows and
  boxes