Exercises: Business, digitalisation and innovation

Explain what the acronym R&D+i stands for and how research, development, and innovation differ from each other, giving an example of each stage in a yoghurt manufacturing company.

Classify these innovations according to their type (product, process, organisational, or marketing): launching a new flavor, installing robots in the warehouse, reorganising the staff into self-managed teams, and updating packaging and brand image.

The diagram shows the four types of innovation according to the area of the business they transform. Identify the missing type, marked with "?", and give an example of that type in a supermarket chain.

An industrial bakery installs ovens with sensors that automatically adjust the temperature and alert of breakdowns before they occur. Explain what type of innovation this is and analyse two effects it may have on costs and bread quality.

A local bookshop starts selling online as well, offering click-and-collect in store. Analyse what changes this digitalisation entails in its way of operating (sales channel, logistics, customer service, data usage) and what new costs arise.

Distinguish between incremental innovation and radical innovation, give an example of each in the transport sector, and explain why most companies innovate mainly in an incremental way.

A traditional furniture manufacturer sees its sales drop due to competition from large online platforms. Propose an innovation strategy combining at least three different types (product, process, organisational, or marketing), explaining what each contributes and in which order you would implement them.

Biotecmar is a canned-food SME with a turnover of 2 million pesos that needs biodegradable packaging so as not to lose market share to major brands. Its management estimates that setting up its own R&D department would require an initial investment of $\$450,000$ and $\$120,000$ annually, with a $40\ \%$ probability of not achieving valid results within three years.

1. a) Based on the data, explain why the characteristics of traditional R&D (financial risk, sunk costs, and maturation periods) represent an almost insurmountable barrier to entry for an SME.
2. b) Design an open innovation strategy for Biotecmar using two specific alternative pathways (such as university agreements or patent licensing), justifying how each one reduces risk and cost compared to the closed model.

The general manager of a bicycle factory in crisis states: «To get out of losses, the only thing that works is designing 15 new models a year; innovating is only about launching new products». However, the audit reveals that its manufacturing costs are $25\ \%$ above the industry average due to logistics failures, orders take a month to be delivered, and $70\ \%$ of the public is unaware of its current catalogue.

1. a) Refute the manager's statement by demonstrating, using the Oslo Manual typology, why focusing solely on product innovation can accelerate the company's bankruptcy.
2. b) Design two non-product innovation proposals (one process and one organizational or marketing) that tackle the inefficiencies in the report at their root, justifying their impact on the profit margin without the need to modify the bicycles.