| Innovation “The implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations” |
| Process innovation “The implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software” |
| Product innovation The process of translating an idea into a customer value proposition that is commercially viable “The introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user-friendliness or other functional characteristics” |
| Incremental product innovation An innovation that offers new features, benefits, or improvements in existing technology. A new product that measures low on both the newness of technology and customer needs fulfilment dimensions. An innovation that is an adaptation, refinement, or enhancement of an existing product in existing markets (see An innovation that is a refinement and extension of an established design that results in substantially lower price and/or greater functional benefits to users |
| Radical product innovation A new product that incorporates a substantially different core technology and provides substantially higher customer benefits relative to previous products in the industry. A new product that measures high on both the newness of technology and customer need fulfillment dimensions |
| Market breakthrough product innovation An innovation based on a core technology that is similar to the technology employed in an existing product that provides substantially higher customer benefits per unit of price paid. A new product that measures low on the newness of technology dimension and high on the customer need fulfillment dimension |
| Technological breakthrough product innovation An innovation based on a substantially different technology compared to the technology employed in an existing product, but does not provide superior customer benefits per unit of price paid. A new product that measures high on the newness of technology dimension and low on the customer need fulfillment dimension |
| Business model and business model innovation A business model is a specification of interdependent activities, processes, and structures that articulate the firm’s organizing logic for value creation for its customers and value appropriation for itself and its partners A business model innovation is a change in one or more elements of a firm’s current business model (content, structure, and governance) and their interdependencies, and thereby, a modification in the organizing logic for value creation and appropriation A business model comprises four elements: 1) customer value proposition, 2) resources - financial, human, and technological, 3) processes employed to convert inputs into finished products, and 4) profit formula that specifies the margins, asset velocity, and scale required to achieve an attractive return. The interdependencies between the elements of the business model require that each element of the model is congruent with the other elements “A business model innovation is a new way of delivering and capturing value that changes the basis of competition” |
| Exploitative innovation Innovations that involve improvements in existing components and build on the existing technological trajectory Technological innovation activities aimed at improving a firm’s product offerings in existing product-markets |
| Exploratory innovation Innovations that involve a shift to a different technological trajectory Technological innovation activities aimed at entering new product-market domains |
| Architectural innovation An innovation that entails changes in the way in which the components of a product are linked together, while leaving the core design concepts (and thus the basic knowledge underlying the components) untouched |