Product Innovation in transitions from Engineer to Order to Configure to Order
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2024-07-11
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en
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Product Innovation is very important for companies to remain competitive in todays competitive capitalistic market. Not being able to adequately innovate could even make that companies become obsolete. Therefore, a effective way of performing Product Innovation should be present within every company. A company that works according to a EtO operating model has a built-in innovation function, in the form of innovative customer requests. In an EtO operating model, products are specifically developed per customer. Fulfilling these innovative customer requests leads to Product Innovation as these requests are typically innovative (Denicol et al., 2020). However, as costs tend to become relatively high as a consequence of developing specific products per customer, companies often look for alternatives. A logical choice is a transition to a CtO operating model. In a CtO operating model, products are modularized and can be combined into end products. These end products are then sold to customers. Transitioning from EtO to CtO has a positive effect on reducing costs, but the Product Innovation as a consequence of fulfilling innovative customer requests disappears. Therefore, if companies still want to perform Product Innovation, Product Innovation should be structured separately. This study analyzes the current literature base on this topic and analyzes companies that are currently transitioning from EtO to CtO on the described issue.
This study is conducted in a qualitative inductive manner, as the data is gathered with semi structured interviews and the Product Innovation structures at the companies are derived from the data that is generated by the interviews. The MIOS (Lekkerkerk, 2012) provides structure when describing the companies. More specifically the general innovation process model (Lekkerkerk, 2024) can be used to describe the Product Innovation structures at the companies in more detail.
The results of this paper show that the companies did structure a separate Product Innovation structure in their company. However, still a lot of Product Innovation is derived from customer requests in both companies. The transitioning companies, thus, structure their Product Innovation in a hybrid EtO and CtO operating model manner. This hybrid manner of structuring Product Innovation is not yet mentioned in literature, and provides a lot of new research topics, moving forward.
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Faculteit der Managementwetenschappen