Business Model Based Concept Generation - Understanding, creating and managing concepts in business

This study introduces a new approach called Business Model Based Concept Generation. Concept development in the business environment has been analyzed in the six academic papers included in this thesis. The main task has been to understand what concept development and design means in theory and in practice, and how companies actually develop new concepts in their innovation activities. In this study, Finnish manufacturing companies have been involved widely, ranging from a micro-size enterprise from the northern Lapland to a large, globally operating company in southern Finland. This study found that many companies are extremely product oriented. Concept development does not cover the whole business and much innovation potential is lost when concentrating on tangible products. Companies are familiar with service innovations, but service concept creation is still problematic for the manufacturing companies. On the other hand, an innovation system is not that developed in the companies that produce services. Furthermore, innovation activities rarely reach all the business units, but innovations are seen as part of product development initiatives. In practice, in an average company there are no multidisciplinary teams developing different types of innovations. As a result, companies do not understand the meaning and significance of concepts and concept development, they lack the knowledge, processes and methods for conscious concept generation and concept development. Front-end innovation is so to say unstructured and unmanaged. Companies manage to create successful solutions, but often especially in small companies, the success results from evolutionary development activities by an entrepreneur, not goal-oriented innovation work. Companies are seldom able to recognize the key to success; they have no ability to understand the concept of successful solution. Product-oriented focus in thinking and operations prevent developers and managers from seeing innovations and innovation potential in other dimensions of business. It would help if the concept could be seen as a recipe for ways in which something is made and served. Then the breakthrough solution could be replicated, scaled, varied or applied innovatively, if the concept was clear for the developers. As a summary, the Business Model Based Concept Generation approach would help companies to develop many types of innovations consciously and renew the early phases of product development; an innovative business model should influence product (service) design and vice versa.