Kausch A Risk-Benefit Perspective on Early Customer Integration

1. Auflage 2007
ISBN: 978-3-7908-1962-5
Verlag: Physica
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 244 Seiten, eBook

Reihe: Contributions to Management Science

Customer integration in the early innovation phase has been considered the method of choice in theory and practice. Growing experience with the concept has shown unexpected side effects that may even outweigh its recognized advantages. Therefore, management needs to be able to assess in advance whether the involvement of customers will add overall value to each particular innovation project. To support but not to replace the final managerial decision, a mathematical formula is developed. It can be applied to all kinds of process structures, takes into account the risks and benefits contingent on a company's situation as well as risk-reducing and benefit-increasing measures and translates them into numerical values. The resulting figure indicates the prospective value of customer integration in a specific project.

Zielgruppe

Research

Autoren/Hrsg.

Kausch, Christoph

Inhaltsverzeichnis

Literature review of key issues.- Development of an analysis model for a risk-benefit balance.- Case studies on early customer integration.- Characteristics of successful early customer integration.- Managerial recommendations for advisable envisaged customer integration.- Conclusion.

Leseproben

4 Case studies on early customer integration (p. 101-102)

As mentioned in the empirical research gap in Chapter 1 and deepened in the review of key problems in Chapter 2, a combined outlook on activities of customer integration and their resulting effects on the outcome of an innovation project has not been the focus of empirical research so far. This thesis therefore resorts to case studies that provide an insight on the relevant aspects of customer integration in the context of practical application, considering as much as possible the issues that were raised in Chapter 3.

4.1 Selection and structure

The cases were selected with the intention of identifying patterns and schemes for successful customer integration and pertinent risk management in the early innovation phase. The predominant selection criterion was the fundamental comparability of the companies’ innovative power and the involvement of customers in the innovation process.

The selected companies are all innovation leaders in their respective market and strive hard to maintain this position. A leadership strategy differs considerably from a "follower" strategy, which more or less copies the leaders’ results. Leaders, on the other hand, rely on innovative customers as an essential source of information (Schewe 2005, Specht and Zörgiebel 1985). With respect to the industry, all chosen companies are manufacturers because in this way the characteristics of R&D are comparable. Another important selection criterion was the companies’ activities in the business-to-business (B2B) market, which means that the customers, too, are companies and not end consumers (the data on those is from other sources). The B2B markets are characterized by the fact that the main buying decisions are made by professionals (cf. Backhaus 2003), the result is a bigger impact on most aspects of customer integration. The geographic location played an important role as well. The innovative output of Switzerland led to the selection of Swiss or Swiss-based companies only. With an R&D intensity of 2.57 % of GDP the country is well ahead of the surrounding EU 15 with 1.91% of GDP or the total OECD with 2.26% of GDP (OECD 2006). The chosen companies, however, all have international contacts and experience. All case study participants are homogeneous in their business fields. With regard to size, they were expressly selected among big and medium-sized companies.

In summary, the four companies described in the case studies were chosen according to the following criteria:

• Innovation leaders in their market shares
• Manufacturing companies
• Business to business (B2B) companies
• Swiss-based companies
• Homogeneous companies

While these criteria guarantee comparability, the companies’ divergent individual branches - printing machines, moving equipment, electrical components, and medical implants - and their different sizes achieve the necessary differentiation for triangulation.

With the express focus on the advisability of customer integration for individual innovation projects and not in general, the case studies each describe a concrete innovation project, termed pilot project, with integrated customers instead of depicting how the companies usually deal with the concept of customer integration. In addition to this main focus, the research also pertains to basic organizational structures that enable the identification of characteristics regarding the assessment of risks and benefits.

Accordingly, the case studies concentrate on the company profile with special regard to customers, on the structure of the innovation process which is the basis for answering several issues in Chapter 3, on the pilot project as central unit of analysis, and on the companies’ ex post evaluation of both the pilot project and the value added by customer integration.