Customer Open Innovation-Based Business Model Developing Circle
11.1 Cases
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J.J. Yun, Business Model Design Compass, Management for Professionals, DOI 10.1007/978-981-10-4128-0_11
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without a dust bag, for which he drew the concept map shown in Fig. 11.1. For this endeavor, he applied his experience in working at an industrial cyclone tower, which separated paint particles from air through centrifugal force. He succeeded in achiev- ing his goal after making 5127 prototypes over a course of 5 years.
The first factor to take into consideration in Dyson’s case is his primary concern to provide a solution to the inconvenience he, being a vacuum cleaner consumer himself, is experiencing with regard to home appliances. Through this mindset, he eventually became the owner of a global vacuum cleaner company. The second fac- tor is his introduction of technology applied to industrial cyclone towers, that is, a technology that was already in use, to solve his present problem. Third, he applied this technology to create a new concept of a vacuum cleaner. During this application process, he created 5127 prototypes, and through this process, he was able to accu- mulate the knowledge and technology that became the source of the Dyson product line, which includes air multipliers and air purifiers. Fourth, his products did not compete with the existing mature vacuum cleaner market but created a premium vacuum cleaner market with high functions at a high price, as he made independent off-line products. Fifth, by being defined as an innovative icon rather than merely as an electronic goods company, in addition to its stylish design, Dyson was able to recognize the requirements of both the seller and consumer in the creation of its products.
11.1.2 Han Kyung Hee Steam Cleaner
Kyung-Hee Han, the inventor of the Han Kyung Hee steam cleaner and CEO of the HAAN Corporation, graduated from the Master of Business Administration pro- gram at California State University and went to work for the Korean government.
At that time, owing to the fact that nearly everyone’s daily activities included clean- ing, she began to form the idea of creating a steam cleaner to make the cleaning
Fig. 11.1 Model image of a Dyson vacuum cleaner without a dust bag (Source:
http://www.dyson.com)
11 Customer Open Innovation-Based Business Model Developing Circle
process easier. Vacuum cleaners were already widely available but were only cus- tomized for the lives of people in the west. She came to the conclusion that Koreans tended to wipe the floor/room after using a vacuum cleaner. She focused on this action while taking into consideration the inconvenience felt by users. She also observed this firsthand when she cleaned using a vacuum cleaner, thus allowing her to take into consideration the experiences of other working women like her. When wiping an area that has already been vacuumed, she noticed that the dirt on the damp cloth mainly spreads with each wipe. This was what she aimed to prevent as she started her efforts to create a new type of cleaner (Cho and Kim 2014). Han concentrated on the inconvenience felt especially by working women including her- self and came up with an idea that provided a solution. She then applied for a patent for her idea and established a company to develop and sell related products.
Having a strong critical mind as a customer eventually translates into an inven- tion. This was the case for Han, who also majored in French Language and Literature at Ewha Womans University and graduated from the Ewha School of Business. She applied for a patent with the idea of the steam cleaner described in Fig. 11.2 in October of 1999. The patent Han applied for concerned the continuous generation of hot steam with the use of electrodes, maintaining a proper humidity level with sterilization and evaporating water with smooth cleaning. She built a company in September of 1999 and, since then, has aggressively worked on the development of steam cleaners. The company was able to achieve KRW 100 billion in sales in 2005.
The success factors of the Han Kyung Hee steam cleaner are as follows. First, she paid attention to the problems she, herself, was facing. As the number of work- ing women continues to grow, she acknowledged that time is important, taking note of the demand for cleaners with the functions of both a vacuum cleaner and a wiper.
She identified that there is a growing need among working women in Korea for cleaners that significantly decrease their cleaning time and increase the level of cleaning efficiency. Second, to integrate the two processes directly, using a vacuum
Fig. 11.2 Concept of the Han Kyung Hee steam cleaner (Source: Korea Patent 10-1999-0043562)
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cleaner and wiping the floors in the rooms, she created a vacuum cleaner that sprays steam. Here, she put the phrase “Necessity is the mother of invention” into action.
Third, she configured a system that integrates the cleaning process by combining the functions of a vacuum cleaner and a steam cleaner into a single system. In fact, many products produced by HAAN Corporation are based on a single-system tech- nology that combines vacuuming and steam cleaning. Fourth, she established a lower price for her steam cleaner as compared to the prices of existing vacuum cleaners, and she targeted a niche market. As a new and small player in the existing mature vacuum cleaner market, where large market leaders already existed, she pursued the strategy of entering a niche market, targeting double-income families and unmarried individuals, rather than creating a new market.
11.2 Customer Open Innovation-Based Business Model