USF Marketing Uber Being a Horizon 3 Product Discussion

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nuntu

Business Finance

University of South Florida

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Identify a “Horizon 3” product, describe the basics of the product, and why it is an example of a Horizon 3 product.In your discussion, address why the risk is/was “high”. 

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Chapter 3 – highlights “Opportunity identification” First, note the “case study” that will be discussed throughout the chapter – “cat toys” The company FroliCat developed two successful cat toys (see Exhibit 3-1 for one of them) based on a randomly moving laser beam (supposedly kept cats entertained). They thought that new products could be developed from this technology (recall from Chapter 2 any such “branch out” products would be a “platform product” – new products developed from an existing technology). The early stages of the process to identify new opportunities is discussed throughout Chapter 2. What is an opportunity? (section starts on p 36) An opportunity is an idea for a new product, usually in an embryonic form, i.e., the details have not been worked out – the development is in the very early stages. For the FroliCat development team, a rough sketch was the first attempt at identifying an opportunity (see Exhibit 3-2). This came out of a “brainstorming” session within the product development group. Here are a few other examples of “opportunities” (see p 36): Procter and Gamble a new type of cleaner (they already had many cleaners) 3M a new polymer with unusual properties (they had the “post-it notes” product line based on a novel adhesive) Sometimes the “opportunity” leads to a viable successful product; sometimes it does not. The book (pp 36-37) goes on to note that categorizing opportunities can be done using a two dimensional model: Dimension 1 The extent to which the product development team is familiar with the pathway that will lead to refining or evolving the opportunity (knowledge of the technology) Dimension 2 The extent to which the product development team understands the needs that the opportunity addresses (knowledge of the consumer/market) This 2-dimensional model is illustrated in Exhibit 3-3: Here’s another presentation that focuses on risk (based on a number of case studies). Note that Exhibit 3-3 identifies three regions (as such, this model is sometimes called the “3 horizons model”): Horizon 1 Opportunities are relatively straightforward improvements, enhancements, variations of existing products (in existing markets). As such, they are low risk opportunities. Horizon 1 innovations are usually short-term projects (typically 1-3 years) and some idea of the end point is available early on in the project. Horizon 1 projects are sometimes descried as those that maintain the core business. Horizon 2 More uncertainty or risk is involved; these are not simple “extensions” as in Horizon 1. However, the opportunities are still somewhat identifiable. For example, the opportunity might be a product that addresses known needs or “gaps” in the market that are currently not addressed. It may involve taking a known proven technology or process and adapting it to relatively new area. The time frame is often 2-5 years. Horizon 2 projects are sometimes described as those that address the emerging business opportunities. Horizon 3 Representing the highest level or risk or uncertainty, there are many unknowns. These involve “leaps” in technology rather than simple linear extrapolation (or small incremental changes). The time frame is often 5 – 10+ years. Horizon 3 projects are sometimes described as those that create genuinely new opportunities. Note that many companies ideally have opportunity development in all three horizons, focusing on the core opportunities and future opportunities. Going back to the FroliCat product development, they were focusing on Horizon 2 opportunities. The chapter continues (starting on p 38) with a focus on the opportunity identification process (summarized in Exhibit 3-4). The approach outlined in Exhibit 3-4 is also sometimes called a “tournament structure”. Note that this is similar to a sports type tournament structure: Three ways are suggested to increase the effectiveness and probability of success of the opportunity identification process: Exhibit 3-5 in the book shows the “tournament structure” for opportunity identification that was followed during the FroliCat development. Note the numbers of opportunities at the bottom of the diagram: 50 “raw ideas” to 7 “slightly more refined concepts” ideas to 3 “even more developed” ideas to 1 “lets’ go with it” idea. Note the section “Opportunity Identification Process” (starts on p 41) In this part of the chapter, they go into more detail on the Opportunity Identification Process. Note: this is just one generalized approach; each step can be altered or adjusted as needed for your particular development project. 1. Establish a charter You can think of this as basically a “mission statement”. Here is the one used by FroliCat in their development project: The statement is designed to not leave the initial innovation steps totally unconstrained and provide some general direction. 2. Generate and sense many opportunities Note the observation that (based on a survey of many companies) opportunity identification comes from within the organization about 50% of the time and comes from potential or actual consumers and other external sources about 50% of the time. In more detail: A list of more specific ideas for generating opportunities is presented starting on p 42. - Follow a personal passion (follow your interests and desires) - Compile bug lists (unmet needs, annoying aspects of existing products, etc.) - Pull opportunities from capabilities (develop competitive advantages). Identify opportunities with one or more of the following characteristics (“VRIN” targets or framework): 1. 2. 3. 4. Valuable (increase performance or reduce a weakness relative to competitors) Rare (no one else has one) Inimitable (hard to imitate) Nonsubstitutable (hard for a competitor to provide a “me-too” product) Note: the VRIN framework is sometimes called “VRIO” framework where the O stands for “organized”. The V R and I still represent the same concepts as above. A representation of the VRIO framework: - Observe and understand customers (fancy terms: “user anthropology” or “consumer ethnography”) (see Shimano bike development example p 44) - Consider the implications of trends This includes changes (actual or anticipated) in technology and social or cultural values Example: growing awareness of environmental issues lead to many “green” innovations - Imitate, but “better” Sources for potential imitation: Competitor advertising and marketing activities De-commoditize a commodity (example: recall the coffee market before and after Starbucks) Drive an innovation “down market”. Basic idea: develop a product that is cheaper than existing products, but still maintains many (ideally, all) of the same benefits. (example: initially electric toothbrushes were “pricey” (many around $100). A company developed the SpinBrush which was significantly cheaper that became the best seller in that time period (late 1990s). Import geographically isolated innovations. Smaller companies tend to have regional (rather than national) markets for their products. (example: Red Bull energy type drinks were initially developed for Thai truck drivers. The Starbucks founder encountered the product internationally then developed Red Bull in this country. - Mine your sources     Lead users. Lead users are individuals (or firms) that have advanced needs that may not be met by existing products. (see veterinarian example, p 47) Representation in social networks. Private sector laboratories On-line idea submission 3. Screen opportunities Focus groups Surveys In-house panels Other marketing research techniques 4. Develop promising opportunities Note that they suggest developing a few ideas, not just one. These “handful” of opportunities are developed in more detail 5. Select exceptional opportunities Whittle down the “handful” of opportunities from step #4 to an even smaller number (again, just one product may not be a good idea). Note the approach Real-Win-Worth-it (p 50) (“RWW”) that can be used to screen opportunities: • Is the opportunity real? • Can you (or your company) win? • Is the opportunity worth it financially? More details on this are presented at the bottom of p 50. 6. Reflect on the results and the process Self-reflection (Could we have done it better? Did we consider enough opportunities? Did we use appropriate filters and criteria? Were people excited and motivated during the process? etc etc Bottom line: Getting to that next great new product usually involves a tortuous path! Be smart about how you proceed! (and as I suggested early on … check your ego at the door!)
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Attached.

Running head: HORIZON 3 PRODUCT

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Horizon 3 Product
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HORIZON 3 PRODUCT

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Basics of the product

Uber is a horizon 3 product that acts as a transportation network connecting passengers to
available drivers (Blystone, 2019). Drivers utilize their vehicles to provide taxi services, and as a
result, uber gets 20 percent of the fare. Uber drivers are registered to begin to use the application
where customers can locate them. When a customer uses the Uber smartphone app, they request
to be picked where the driver dispatches to the passenger's location to assist in reaching the desired
destination. The credit card is used as the only payment method to ensure that Uber gets its
percentage and the rest of the driver (Blystone, 2019). This service is currently available across 55
countries; uber is still expanding its users in various cities to the point that the app can be used to
call for a helicopter for transportation. Uber does not engage in the taxi business or employ taxi
drivers; it basically connects drivers to customers and then takes a percentage of the fare been paid.
Garret Camp and his friends founded uber after spending about $800, hiring a private driver. He
intended to find a better way of reducing direct transportation costs and then realized that costsharing could make it affordable. His idea transformed into Uber.
Why it is an example of a Horizon 3 product
The product is horizon three because the fou...

Gubznf574 (30267)
University of Virginia

Anonymous
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