Innovation – when students meet reality

Joan Pape Rasmussen, Assistant professor in International Marketing and Business Communication and Branding, International Business Academy, Kolding, Denmark, jpra@iba.dk
Lars Jespersen, Assistant professor in Strategic Management, Innovation Management and Organisation, International Business Academy, Kolding, Denmark, ljes@iba.dk

Introduction

In December 2012, the Danish Government launched the national innovation strategy of Denmark: 'Denmark – Land of Solutions’. A new paradigm for the future policy of innovation was thus initiated.

The innovation strategy is launched to ensure that Denmark’s competitive advantages in research and commerce/business are transformed into new growth and job creation. Concurrently the strategy aims at contributing to ensuring the development of innovation solutions to global challenges and aims at heightening/improving the knowledge transfer between knowledge institutions and companies (Ministry of Higher Education and Science, 2013).

To support innovation projects at Academies of Professional Higher Education and University Colleges the Danish government has allocated 40 million DKK (5.3 million Euro). This funding is initiated in order to support practice based innovation projects and in order to enhance the quality of the educational programmes. Academies of Professional Higher Education like the International Business Academy – IBA – are thus able to enhance and support research and development activities in companies by developing concrete innovation projects, bringing their unique knowledge and competences into play.

Based on the innovation strategy and the IBA’s development contract with the Ministry, and as part of the IBA’s development activities aimed at enhancing the focus on innovation in the educational programmes, the overall development project ‘Applied Innovation’ was initiated. The Ministry of Higher Education and Science financially supported the project.

As the IBA’s overall development project ‘Applied Innovation’ consists of various projects, the case study (and hence this paper) is based on the programme Bachelor of International Sales and Marketing Management. The case study involved 100 bachelor students and the two authors of the paper, both lecturers at the programme in the period of November 2013 to February 2014. The students and lecturers collaborated with the Danish subsidiary of an international company (referred to as the Company). The project spanned three months and was designed to encompass the following phases: 1. Development of the concept ideas; 2. Commercialisation of the concept ideas.

The project has to be seen as a continuous learning activity and the project was comprised of new exams addressing innovation processes and commercialisation, in addition to the already listed development aspects. The research method of this paper is the case study. The case study is by nature interpretative and is based on an interpretative and constructive epistemology. The empirical evidence of the case study is based on examples of presentations and the documents, which describe the innovative concepts and ideas developed throughout the project. Furthermore the study also tests the explanatory application of some of the theories from the educational programme.

Theoretical Framework

As an overall theoretical approach Piihl and Philipsen (2011, p. 35) ”Linking Teaching Curriculum to Theory”, figure 1 is applied. This approach, as the figure illustrates, consists of two modes: Teaching Curriculum and Theory of Application respectively. Piihl and Philipsen’s (ibid.) objective has been to develop a theoretical framework which ensures a structured way to describe, analyse and clarify the challenges that may occur in designing higher education curricula in order to promote both rigour and relevance. Concurrently Piihl and Philipsen (ibid.) address the need to link relevance and competences. They emphasise the need to design teaching curricula in ways which include the context, e.g. a business, to which the students are expected to contribute upon graduation.

Piihl and Philipsen’s (2011) typology is gauged to be relevant and is applied in the case study presented in this paper, in order to situate some of the bachelor programme’s activities in a framework and broader learning perspective. This enables us to address the IBA’s curricula and theory-of-application, and mirror the case study presented in this paper as an exemplification of the Danish Government’s initiative for enhancing the knowledge transfer between higher education institutions (in this case the IBA), bachelor students and a concrete company.

Figure 1. Linking Teaching Curriculum to Theory-of-Application (Piihl & Philipsen, 2011). The figure is inserted from source: A Research-based Approach to University Curriculum Development that Prepares Students for Subsequent Practice. Jesper Piihl and Kristian Philipsen (p.35) in: Beyond Transmission – Innovations in University Teaching (2011)

Below some of the core elements of Piihl and Philipsen’s (2011) typology are outlined in order to tease out the differences between Mode 1 and Mode 2, particularly pertaining to the role of the student.

Mode 1

Mode 1 can be described as the classical approach in which knowledge production takes place at research institutions working within defined disciplines (Piihl and Philipsen, 2011).The IBA bases learning activities on this research-based knowledge and the aim of the teaching is to improve the students’ skills and understanding of existing knowledge: “to make students proficient regarding existing knowledge”. This means that in mode 1 HEIs deliver teaching and the argument is that when graduating the students have obtained a given knowledge and can subsequently function as experts and advisors.

Mode 2

Piihl and Philipsen (ibid.) argue that knowledge production is not restricted to occurring in one place but is closely joined to the application context. Knowledge production occurs in a myriad of places such as universities, companies etc. Mode 2 thus observes knowledge production from the perspective that knowledge is context dependent (Piihl and Philipsen, 2011).

The aim of teaching in Mode 2, is “to reach enterprising student knowledge creation competences through case and problem oriented types” (Piihl and Philipsen, 2011, p. 38). Different types of cases, and problem oriented learning through active co-creation of context dependent knowledge form part of the lessons. However, as Piihl and Philipsen (2011) emphasise, case-oriented learning need to be based on an interpretation of the reality which a case presents. Therefore students also need to test the taught and learnt in a practical context.

Based on the above, the framework for this paper rests upon an understanding of the following:

We contend that Academies of Professional Higher Education and University Colleges, and the concrete curriculum, are characterized by having a different approach to knowledge production than that of the general perception as depicted in Mode 1, but not necessarily to the application of the produced knowledge.

The case study

The case study is part of the Bachelor’s Degree Programme in International Sales and Marketing Management at IBA, Kolding in Denmark. The Programme covers a number of overarching subject areas to which the educational elements (themes) are related. The educational elements are compulsory and trans-disciplinary.

The theoretical approach to the subject Innovation consists of a number of trans-disciplinary elements to understand a company’s innovative platform, creative processes and value-based management. The objective is to give students the competences to be able to enter into a company’s work with planning and implementing product and concept development. In doing so a specific company is involved in practice based learning and the context of the Innovation process is based on real life complexity.

This case study focuses on the results of phase 1 – the development of ideas for new concepts. In this phase the applied knowledge and innovation activities were part of both the lectures and part of the work pertaining to the specific challenges presented by the company. Essentially, the assignments rose out of a real need for new ideas and new perspectives, a need which the company faced. Consequently the purpose of the collaboration was to let the students, based on their knowledge, develop new innovative concepts related to the company’s products and services and related to the company’s existing markets and potential markets. Furthermore the project aimed at enhancing the students’ innovative competences in an applied context.

The study curriculum Bachelor of International Sales and Marketing Management

The course element Innovation is part of the semester theme: The background for a Company’s Sales and consists of trans-disciplinary course subjects (Table 1).

Table 1. Overview of course subjects seen in a trans-disciplinary perspective (excerpt from curriculum)

Compulsory course element Innovation 5 ECTS

Course subjects

Sales and Marketing

Growth analysis

Product and concept development and processes

Supply Chain Management

Consequences of innovation for a company’s supply chain

Organisation

Assessment of the innovative platform along with a company’s innovative processes and incentives

Law

International and EU Intellectual Property Rights Law

Economics

Project Management and measurement systems

Source: Curriculum BA of International Sales and marketing Management (2011)

The curriculum of this course is based on both relevant and theoretical concepts ensuring that competence-in-practice can contribute to explaining the practical part of knowledge. In spite of differences at different institutions of Higher Education and curricula, the study programme Bachelor of International Sales and Marketing Management is situated within Mode 1 pertaining to knowledge, while remaining firmly rooted in Mode 2.

The case company forms a learning context and is briefly presented below:

The Company has approximately 500 employees. The headquarters and main warehouse are based in Kolding, Denmark. The Company is a subsidiary of a German family-owned company. The core business has a product range for craft and industry that comprises over 100,000 items, ranging from screws, screw accessories and anchors to tools, chemical-technical products and personal protection equipment

Research-based Mode 1 knowledge introduced during the course

In this case study we do not present all the theoretical approaches (Mode 1) to innovation which the students may know about and apply, and which may be relevant to include. Rather we briefly present selected theoretical elements from the relevant curriculum, and study plans viewed from the perspective and scope of the collaboration with the company.

Innovation is often described as changes in what companies offer the world in the shape of products or services, and the way in which the company creates and delivers these offerings – in other words, process innovation. Moving beyond the steady state conditions of ’doing what we do better’ to ‘doing different things in different ways’ becomes the norm, according to Francis and Bessant (2005). This approach to innovation can be criticized for not including markets and business models in relation to the capabilities of the innovations. Tidd et al. (1997) in Francis and Bessant (2005) characterise these omitted models as the four P’s, which Arlbjørn et al. (2010) similarly apply as a point of departure for innovation in a company’s supply chain. Therefore it is relevant to include both analyses of the scope of innovation, and a company’s business model in the context of the potential effect of innovation and concept development on the company.

According to Hamel (2000) a business model is the business concept of a company put into practice. Hamel’s argument is that competition does not occur between products or companies, but between different business models. Hamel (ibid.) emphasises that innovation should also occur as a continuous development and adjustment of business models, and Hamel hereby invites the discussion of innovation within a company not only to pertain to products and processes, but also to be assessed based on the implications for the business concept. When a new business model for example alters the economy in an industry and is difficult to replicate, it creates a competitive advantage (Magretta, 2002). This element is relevant to include in the students’ knowledge and in their assessment of the business models. A pertinent point being that they should not equate business model with strategy cf. Magretta (ibid.).

Innovation capabilities

Francis and Bessant (2005) purport that it must be assumed that an innovative company has to possess ‘innovation capability’. That is to say, both capabilities and capacities that permit it to obtain advantages by implementing more and better ideas than its competitors. In that context, it is interesting to observe and investigate the innovative trajectories a company has pertaining to development and innovation. Tidd and Bessant (2010) define innovation capabilities as capabilities to improve products and services, which can be targeted to four core areas (the four Ps):

All four can be pursued at the same time. The four P’s provide a structured approach to examining the opportune scope for innovation.

Innovation capabilities are not cf. Tidd and Bessant (2010) a unitary set of attributes. It may occur that the capability which is needed in order to support some aspects of a company’s innovation conflict with those that support other innovative endeavours. This situation is a pivotal argument which Christensen et al (2000, 2002) present as the innovator’s dilemma in dealing with both sustaining and disruptive innovation (initially seen from a technological perspective).

Disruption as an approach to innovation and concept development

Disruption as an innovation method is widely applied in different contexts with the perspective of creating or generating something that is new (Kim and Mauborgne, 2005; Christensen et al., 2002; Dru 1997). The concept is applied in this case-study predominantly from Christensen et al.’s (2002) definitions and recommendations on application, and is then broadened and applied in other settings.

Christensen et al (2002) point to two general strategies which can lead to ideas bringing forth disruptive growth. The first strategy is based on the fact that a market is identified as a subject for disruption, and the second strategy is based on the disruption of the existing business model. They emphasise that ideas that give rise to the disrupting of new markets are the most prevalent innovation strategy. To test such ideas, Christensen et al (ibid.) present a litmus test, and the results of these can assist managers and executives in distinguishing between disruptive and sustaining ideas. Thus Christensen et al present two types of approaches to innovation: Sustaining versus Disruptive Innovation. They define sustaining innovation as innovation enabling products and services, already valued by customers at mainstream market, to perform better. Disruptive innovation creates a new market, by introducing new types of products, services and concepts.

While Christensen and Overdorf (2000) discuss and create a framework on how companies can evolve capabilities to cope with change, Dru (1997) presents a framework from a marketing and branding perspective on how to create disruptions by overturning conventions. Dru’s framework consists of three steps. The first step consists of identifying the present conventions in the industry and market. The second step consists of being disruptive by questioning how things have been done hitherto, and it is during this process that new ideas develop into new concepts, by disrupting conventions. Considering these different approaches to disruptive ideas, Anthony et al. (2008) argue that disruption can also involve a company in doing what competitors will not do. In the third step, a vision for the new concept, still loyal to the overall brand of the company, is developed and formulated. It may nonetheless challenge the existing business model.

The objective of bringing this knowledge into the learning process for the students has been to present them with the knowledge that disruption, as a method of innovation, can take place in different areas; and also to make them aware that the approach can be applied in a broader perspective and setting, pertaining not just to technological innovations.

Based on a variety of theoretical approaches and on the project learning as presented in the curriculum, the students will be exposed to the context (Mode 2 Theory-of-Application) – Innovation in Reality. They are expected to approach the task not in the role of experts, but in the role of change agents who have to work with problem identification, interpretation, analyses and innovative solutions. Thus they worked intensely for some weeks with a case company on the challenge presented below to develop a concept for tools for a specific B2B market or to develop a concept for measuring tools for a specific market of construction customers.

To provide a reference and insight into the context of the Company the students were presented to the Company according to the frame below. This in order to provide a frame of understanding for the students’ encounter with context of application.

The context

The students are introduced to the Company during a visit to the company. They are introduced to the history of the Company, the values and products. Some students proactively ask questions with clear reference to the literature and attempt at getting close to the headline of the project assignment ‘Applied Innovation’.

Excited to hear about the processes of product development, idea generation and innovation the students are introduced to one of the most important persons in the Company – the innovator who has many years of experience in the Company. Based on the account from a valuable member of staff with a talent for choosing which products should be part of the product line the students obtain insight into how the product development occurs and where the ideas come from.

Most of the ideas come from the morning shower and the students are almost led into the homes of the employee’s bathroom where the morning shower can take forever because the ideas emanate here. The employee has also installed a system allowing him to let the water run and still be conscientious of energy consumption while he just down the ideas somewhere in the bathroom. The account continues and entails trips to Asia in ‘comfortable hiking-shoes’ working his way through numerous exhibition halls and fairs to collect and select tools and ideas – which can be developed further and incorporated in the product line.

Empirical findings

The empirical findings present a description and qualitative analysis of five Case Concepts hoping that we will identify differences in their approaches and ways in which they use theory and practice. In the practice-based assignment, the students were asked to develop a well-founded suggestion to solve one of the following challenges, which The Company faced: Develop a concept for tools (tooling) for a specific B2B market, or develop a concept for measuring tools for a specific market of construction customers.

The students worked in groups for two weeks, and presented their ideas to a panel of experts from the company and to their lecturers. They then continued into the commercialization process. In this paper we only account for the first part of this project.

In the following we briefly present the business concepts presented by the students.

 

Idea

Applied approaches

Case Concept One

Create our own the Company, with three new innovations:
Product busses within different segments.
The Company Academy – customer seminars.
Collaboration with technical schools and secondary schools.

  • A distruptive innovation model (Christensen et al, 2002)
  • A Blue ocean approach (Kim & Mauborgne, 2005)
  • Business Model (Hutt & Speh, 2013)
  • The X-model of Employee Engagement (Blessing & White, 2012)
  • Sales Management competences (Cron & Decarlo, 2010)
  • Hierarchy of Needs (Cron & Decarlo, 2010)

Case Concept Two

The Company initiative for Start-Ups. Increase sales through Start-up Package Solutions for new, small-scale potential customers.

  • The sustaining innovation model approach (Christensen et al, 2002)
  • Osterwalder’s Canvas model (Osterwalder et al, 2009)
  • Types of innovation (Hoskisson et al, 2007), The 4P’s of innovation space (Tidd and Bessant, 2010).

Case Concept Three

A further development of the Company’s concept of handheld scanners. To increase the advantages of efficiency primarily for profitable customers and for the Company, hereby engendering increased loyalty and sales.

  • Theoretical discussion of disruption (Christensen et al, 2002)
  • What Customer Value Means to Business Customers (Hutt & Speh, 2013)

Case Concept Four

“SPOT ON”
Create increased value to the customers through innovation of both concrete product features, packaging and services.

  • A brainstorming process, with the clear aim of improving the currently identified weaknesses,
  • 4P’s innovation space (Tidd and Bessant, 2010).

Case Concept Five

“My the Company” – an internet-based personal interface for B2B customers

  • 4P’s innovation model (Tidd and Bessant, 2010).
  • A disruptive model approach (Christensen et al, 2002) and,
  • 7 P’s of service marketing (Kotler et al., 2009),
  • Sales Management Competencies (Cron and Decarlo, 2010)
  • A value added market approach. New technology is used to improve service innovation.
  • A combination of market-driven and internal capability perspectives

Discussion

Below we discuss and assess the five concepts presented by the students based on the structure of the concepts and their application of theory in practice and the solutions to the challenges. The assessment specially addresses the perspective of innovation present in the concepts. Furthermore the discussion addresses the potential business implications of the solutions presented by the students. This part of the discussion addresses the outcomes of the innovation process.

Structure and application of theory in practice

We ascertain that the students assume the role as change agents based on the fulfilment of the learning objectives of the curriculum. We can identify explicit references to a trans-disciplinary approach to solving the challenges in all five concepts as they refer to a variety of theoretical models.

The five concepts are structured relatively similarly regarding analysis and in their approach to answering the assignment. The structure of the concepts can be listed logically in separate phases. Phases in the students’ approach: Context of case, problem identification, analytical approach and recommendation.

The structure of the submitted concepts should be assessed in the context of the way in which the assignment is given: the assignment required a structured and well-argued case. Based on the five concepts we can ascertain that the demands listed to the assignments logically produce a rather uniform structure of the case report.

Approaches to solution of the challenge

It is interesting, however, to discuss and reflect on how the students approach the challenge. The empirical data indicate that all five concepts commence from the context. That is to say the company and Mode 2 cf. Piihl and Philipsen (2011). In all five concepts the students then chose a business model approach, whether they chose Hamel (2000) or Osterwalder (2009) as reference, it is quite clear to identify a point of departure in the company and its capabilities (competences and resources). Thus we identify a Mode 2 context in the students’ approach to solving the assignment but based firmly in the context of Mode 1’s theoretical approach.

The nuances and detailed use of theories in the problem solving vary in the five submitted concepts. It is possible to identify great differences in the extent to which the students prioritise theories and create relevant and practical solutions.

The understanding of capability and the significance to the innovation processes of the Company are addressed most in depth in Case Concept One and Case Concept Two. Case Concept Three, Four and Five chose a more marketing-theoretical approach by analysing need and address values in the customers and the market in general.

Only Case Concept One chose to address the risk element in the innovation process and the students conscientiously chose a sustainable innovation whereby they aim at making the most of the company’s current strengths as well as fulfilling the existing needs in the market. The other four Concepts focus more on the fact that the company’s opportunities are greater through innovation than the potential threats of the innovation and change.

Use of innovation theory

Our analysis indicates that the students use innovation theories and models in both their analyses as well as in their own assessment of the innovation solutions. In four of the five Case Concepts we identify explicit application of disruptive and sustaining theoretical references. Case Concept Four is the only Case Concept in which the students do not explicitly refer to the model. It is interesting to observe that the model and approach are applied similarly in the first-mentioned four Case Concepts. We can thus identify a predominantly uniform approach to solving the challenge. In all cases the model is applied to generate ideas and identify solutions to the challenge. As an add-on; the students could have chosen to apply the litmus test in their assessment of their own recommended solution – but none of the five Case Concepts chose to use this test.

Furthermore the students have used another innovation theory in solving the challenge. When it comes to this, Case Concept Five should be mentioned as they with an explicit reference to the 4P’s innovation model aim at creating process innovation. This is done with clear reference to the disruption model approach.

Case Concept One approaches the innovation process quite conscientiously. They start this process by identifying and creating an overview of the Company’s current capabilities and subsequently by explicitly choosing to apply a disruptive innovation approach in order to develop innovation by going the opposite direction. This approach is positivistic and views opportunities. All five Case Concepts apply this approach – Case Concept Two has a more balanced approach to this by also including risk element in their approach to the innovation process.

Case Concept Two has chosen an approach, which aims directly at sustaining innovation. It is interesting to observe that the students deliberately chose a slightly more conservative approach to innovation when they include the risk discussion from the very beginning. Their approach to solving the challenge is that it is most expedient; easier and almost risk free applying the sustaining innovation approach. As the only Case Concept of the five Case Concepts this group of students chose a more pragmatic business development approach through the conscientious choice of sustaining innovation. It is possible to argue for this choice based on both a theoretical and a very practice-based approach. It is also the only Case Concept that has this approach and thus the students differentiate themselves from the other groups. Their choice can be seen as expressing a lower level of innovation ambition compared to the other groups. It should be noted, though that the ambition to create value to small and newly started customers is quite ambitious and value creating – also to the Company.
Case Concept Four also uses an innovation approach by using sustaining innovation. The point of departure differs to Case Concept Two, which also applies sustaining innovation (Christensen et al, 2002). Case Concept Four generates innovative ideas from their strength and weaknesses analysis, which has been conducted preliminarily. Thus their point of departure differs but it is interesting to observe both Case Concepts and their usage of the analysis as input in the idea-brainstorming phase.

The approach to innovation through using the technology development can be seen in Case Concept Three. In this Case Concept an existing product/service (hand scanner) is added efficiency advantages aiming at increasing the customers’ loyalty and the Company’s revenue. Case Concept Five also applied technology as a driver for innovation development. The strength of the approach of Case Concept 3 is that it conscientiously and in a structured manner approaches the innovation process through the perspective of technology. The disadvantage can be that the innovation is minimal but it is beyond the scope of this paper to assess whether this is the case here.

Case Concept Five apart from technology disruption also applies a perception on innovation that it is not only product oriented. The innovation in Case Concept Five has an explicit focus on development and renewal of process and services in the Company based on the 4P’s innovation model (Tidd and Bessant, 2010).

Conclusion

This case study accounts for a concrete development project in ‘Applied Innovation’ focusing on how higher educational teaching initiatives support applied sciences and support the students’ competence-in-practice. The objective of the project has been to increase the focus on innovation in study programmes in general and specifically in the study programme Bachelor of International Sales and Marketing Management. This study programme already contains an ECTS accredited innovation module cf. the curriculum. Furthermore the project deliberately aimed at enhancing the students’ innovative competences in a practice-based context.

The applied innovation in this case study differs from the knowledge the students have obtained from lectures. Based on the empirical observations we have conducted in the context-of-application in the company and with the company as a source we conclude that the innovation in the company and the innovative trajectories can be situated within a strong focus on products and a longitudinal focus on individual innovative capabilities. Furthermore we do not have observations providing us with data based on which we can reach conclusions regarding the total capabilities of the company. We were able to observe peripheral links to the international network of the company; however, this does not form part of the current case.

Meeting a reality where the ideas are formed in the morning shower or from years of experience was a very different encounter with practice than the theoretical knowledge base the students brought with them from class. Even if the innovation observed in practice presented itself quite differently from the students’ theoretical knowledge base, our analyses illustrate that the students still avail of the knowledge obtained from class when encountering practice. Based on this knowledge base and the context the students, as change agents, are able to develop new concepts for the Company. As change agents, the students work from an understanding of the context and apply their hitherto acquired learning while still learning.

We purport that the curriculum of the Professional Bachelor of International Sales and Marketing Management warrant that the context of any given learning activity should form part of the design of the learning activity. This has to be done in order to achieve and ensure the intended learning, cf. the curriculum, in which the study programme is strongly based within the knowledge typology Mode 2 and a theoretical foundation of Mode 1. We raise the question whether this is done adequately and as Piihl and Philipsen argue how the students experience such learning activities in their studies. This is an interesting point as IBA has the objective that a series of the exams held at the IBA should take place in collaboration with the context that is to say business and industry. In the case study project ‘Applied Innovation’ the exam was developed and we were able to create a context between two independent exams in order to create continuity and a longer period for the students to train and rehearse. In this case this meant that students apart from working with idea generation in phase one were able to continue working and address commercializing their ideas in the second phase of the project.

Being in touch with the context (business and industry) is part of the curriculum and the students have two internships during their study programme. We assess the case study project as a whole to fulfil the learning objectives listed in the curriculum, the development activities of IBA and the objectives of the Ministry and provide us with more inspiration to how innovation may form a greater part of the IBA’s curricula in total. The development activities of IBA and the objectives of the Ministry may also inspire us, lecturers, to maintain the intended learning objectives and continue to develop and solve the challenges of designing learning activities that balance the various forms of knowledge production in order to ensure the students from Professional Bachelor of International Sales and Marketing Management will be able to contribute to the context-of-application.

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