The New Age Of Innovation

I will write a little bit about the book from C.K. Prahalad and M.S. Krishnan.. First, here is a link to an article about the book in: Businessweek
and a link to a blog where it is discussed: The New Age Of Innovation Forum

The book is focusing on the (N=1, R=G) model: C. K. Prahalad and M. S. Krishnan present evolution of business models over the past century. The two pillars of this model are:

1) How many consumers does one product target?
2) Where all does the firm mobilize resources from?

For example, let’s look at Ford’s Model-T which came out in 1908. It was a product based on “one model fits all” principle (“Any color is ok as long as it is black”). Further, the resources producing the car had to be with the firm all located in and around one place: Dearborn, Michigan. Ford was one of the most vertically integrated firms.

Now, compare this model to Amazon’s model. When you log-in to amazon, it displays the books (say, on innovation) which interest you. When you e-browse a book, it also shows the reviews as well as other books which are related to the topic. You certainly feel it is an experience, unique to you. Where does Amazon pull the resources from? From a number of bookstores across the world, developers in US, Europe, Asia, in short, all over the world.

Prahalad calls this model (N=1, R=G); value is based on unique & personalized experience and is based on access to resources across the globe (as against ownership of resources co-located)