新創企業開發創新產品之決策框架研究 - 以德國一新型失禁產品之開發案為例

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(1)國立臺灣師範大學管理學院管理研究所碩士論文 Graduate Institute of Management College of Management National Taiwan Normal University Master Thesis. 新創企業開發創新產品之決策框架研究 - 以德國一新型失禁產品之開發案為例 An Investigation on the Decision Framework for Startups’ Introduction of Innovative Products – A Case Study of Introducing a New Incontinence Valve Product in Germany. Isabella Maria Burckhardt 指導教授：蕭中強博士 Advisor：Chung-Chiang Hsiao, Ph.D.. 中華民國 107 年 7 月 July 2018.

(2) 國立臺灣師範大學管理研究所碩士論文. 研究生： Isabella Maria Burckhardt. 撰. 107. 7.

(3) A DECISION FRAMEWORK AND CASE STUDY. 2. Abstract This thesis investigates how an innovative product can be successfully brought to market by an entrepreneur or a start-up and develops an overall framework to help entrepreneurs determine whether to introduce the innovative product in a market or not. Important frameworks such as the business model canvas or the innovation diffusion theory are examined in the literature review. The research methodology applied in this thesis is the case study approach, which allows to retain a holistic and real-world perspective. The case study presented is about a patent application submitted in 2015 for an incontinence valve. The evaluation framework considers technology feasibility, market potential, core partner and business model and is applied to the case study. This framework is intended to provide a guideline on whether an invention could be commercially applicable or not. The decision framework is successfully applied to the case study and it can be concluded that the examined innovation is commercially viable.. Keywords: Entrepreneurial Opportunities, Innovation, Evaluation Framework.

(4) A DECISION FRAMEWORK AND CASE STUDY. 3. Table of Contents INTRODUCTION .......................................................................................................................... 9 Research Purpose .......................................................................................................................... 12 Research Target and Range .......................................................................................................... 12 Expected Research Outcome ........................................................................................................ 13 LITERATURE REVIEW ............................................................................................................. 14 Entrepreneurial Opportunities ....................................................................................................... 14 Definition of entrepreneur......................................................................................................... 14 Definition of entrepreneurial opportunity ................................................................................. 15 Discovery of entrepreneurial opportunity ................................................................................. 15 Business Planning ......................................................................................................................... 17 The business plan ...................................................................................................................... 18 The business model canvas ....................................................................................................... 19 The lean startup model .............................................................................................................. 24 Marketing and Diffusion of New Products ................................................................................... 26 Marketing concept & strategy ................................................................................................... 27 The 7P’s in marketing ............................................................................................................... 28 The modern marketing model (M3) .......................................................................................... 29 Timing of a market introduction ............................................................................................... 30 Customer experience ................................................................................................................. 32 Persona development ................................................................................................................ 32 Innovation diffusion theory....................................................................................................... 32 RESEARCH METHODOLOGY – THE CASE STUDY APPROACH ...................................... 37 The Case Study Approach - Planning ........................................................................................... 37.

(5) A DECISION FRAMEWORK AND CASE STUDY. 4. The Case Study Approach – Design ............................................................................................. 38 The Case Study Approach – Preparation ...................................................................................... 38 The Case Study Approach - Collection ........................................................................................ 39 The Case Study Approach – Analysis .......................................................................................... 39 The Case Study Approach – Sharing ............................................................................................ 40 CASE STUDY .............................................................................................................................. 41 Introduction ................................................................................................................................... 41 Product .......................................................................................................................................... 42 Patent Application ......................................................................................................................... 43 Patent Process in Germany ....................................................................................................... 43 Submission of Patent ............................................................................................................... 44 Resubmission Opportunity........................................................................................................ 46 Current Issue ................................................................................................................................. 46 Market Analysis ............................................................................................................................ 48 Medical device market in Germany .......................................................................................... 48 Incontinence .............................................................................................................................. 49 Competitive Products .................................................................................................................... 50 Pads ........................................................................................................................................... 51 Female devices .......................................................................................................................... 51 Male devices ............................................................................................................................. 52 Catheters ................................................................................................................................... 53 Toileting aids ............................................................................................................................ 53 Collars ....................................................................................................................................... 53 Further methods ........................................................................................................................ 54.

(6) A DECISION FRAMEWORK AND CASE STUDY. 5. Target Market................................................................................................................................ 58 Legal Framework .......................................................................................................................... 58 Promotion and Advertisement .................................................................................................. 59 Channels .................................................................................................................................... 59 SWOT ........................................................................................................................................... 60 Strengths ................................................................................................................................... 60 Weaknesses ............................................................................................................................... 60 Opportunities............................................................................................................................. 60 Threats....................................................................................................................................... 61 Further Analysis ........................................................................................................................ 61 Porter’s Five Forces ...................................................................................................................... 62 Threat of substitution ................................................................................................................ 62 Buyer power .............................................................................................................................. 63 Threat of new entrants .............................................................................................................. 63 Supplier power .......................................................................................................................... 63 Competitive rivalry ................................................................................................................... 64 Evaluation Framework for Innovation Feasibility ........................................................................ 64 Technological Feasibility Analysis ........................................................................................... 66 Market Potential Analysis ......................................................................................................... 69 Core Partner Analysis ............................................................................................................... 70 Business Model ......................................................................................................................... 72 Decision Guideline.................................................................................................................... 72 Application of Framework to Case Study ..................................................................................... 74 Technological Feasibility .......................................................................................................... 75 Market Potential ........................................................................................................................ 76 Core Partner .............................................................................................................................. 77 Business Model ......................................................................................................................... 77.

(7) A DECISION FRAMEWORK AND CASE STUDY. 6. CONCLUSION AND GENERAL DISCUSSION ....................................................................... 84 Theoretical and Managerial Contribution………………………………………………………..85 Limitations .................................................................................................................................... 85 Future Research ............................................................................................................................ 86 REFERENCES ............................................................................................................................. 87 APPENDIX ................................................................................................................................... 97.

(8) A DECISION FRAMEWORK AND CASE STUDY. 7. Table of Figures Figure 1. Worldwide Comparison, Segmented by Sales .............................................................. 11 Figure 2. A framework for describing new venture creation ....................................................... 18 Figure 3. Business Model Canvas ................................................................................................ 21 Figure 4. The Modern Marketing Mix (M3) ................................................................................ 30 Figure 5. Adopter Categorization ................................................................................................. 34 Figure 6. Variables Determining the Rate of Adoption of Innovations ....................................... 36 Figure 7. Doing Case Study Research: A linear but iterative process.......................................... 37 Figure 8. Schematic View of the System. .................................................................................... 42 Figure 9. Prototype of incontinence valve (scale 10:1). ............................................................... 47 Figure 10. Incontinence Products Products .................................................................................. 51 Figure 11. New Product Development ......................................................................................... 65 Figure 12. Outline of the Framework ........................................................................................... 66 Figure 13. Evaluation Framework for Innovators ........................................................................ 74 Figure 14. Proposed Business Model Canvas .............................................................................. 82.

(9) A DECISION FRAMEWORK AND CASE STUDY. 8. Table of Tables Table 1: Product Comparison - Advantages & Disadvantages ..................................................... 56 Table 2: Competition Grid ............................................................................................................ 57 Table 3: SWOT ............................................................................................................................. 61.

(10) A DECISION FRAMEWORK AND CASE STUDY. 9. Introduction Approximately 60% of all inventions that have been patented are not commercially used by the end of their term of patent (Kröher & Müller, 2002), yet in Germany the number of new patent applications has been consistently rising over the past years and reached a new high in 2016 where 67.898 new patent applications were filed (“Patentanmeldungen in Deutschland bis 2016 | Statistik,” n.d.). Unused patents represent not only lost value for the economy and in research and development costs for companies and individuals, but also illustrate an inventors’ dilemma. An inventor may have a great invention that is novel and that he or she wants to patent, but at the same time have no idea how to make it commercially available, market it or profit from it. Bigger companies often have an advantage since they have entire Research & Development (R&D) departments dedicated to exploring new ways and making new discoveries and are able to cope better with the associated costs. Therefore, greater resources represent a decrease in risk in case the invention will not be marketed in the end. This thesis will investigate how an innovative product can be successfully brought to market by an entrepreneur or a start-up and develop an overall framework to help entrepreneurs determine whether to introduce the innovative product in a market or not. This will be done with an exemplar patent application for an incontinence valve submitted in 2015. A case study will provide a detailed analysis of how the innovative product of an incontinence valve can be introduced under limited resources into a rather difficult market. The term difficult is applied because the medical sector is subjected to strict government regulations and dominated by big market players who are already well established in the market. The topic of this thesis is important due to manifold reasons. First, the thesis intends to provide a quick guideline for non-business degree future entrepreneurs and therefore provide.

(11) A DECISION FRAMEWORK AND CASE STUDY. 10. future entrepreneurs with encouragement and motivation to pursue their idea ensuring a first step evaluation of the idea has been undertaken. Second, the thesis could potentially contribute to help increase the number of inventions that get marketed by providing said guidance. Third, with help of the case study provided in this thesis an unused invention gets utilized and the thesis will illustrate how this specific invention can be made marketable. Finally, incontinence will be a major health concern in the future that will impact many people and with its current products and treatments available on the market also the environment. A successful introduction of this invention will therefore not only help many sufferers but also positively impact the environment. Germany’s medical market is amongst the largest in Europe and the third largest in the world and is continuously growing (“Germany – Overview of medical device industry and healthcare statistics,” 2014). Even though the majority of the industry is made up by small- to mid-sized medical device companies, some major players such as Siemens, B. Braun, Fresenius, 3M Healthcare® or Philips® (Salama, 2016) are based in Germany (“Germany – Overview of medical device industry and healthcare statistics,” 2014). German and EU safety regulations, directives and standards regulate the market for medical devices and its requirements are often complex (Salama, 2016)..

(12) A DECISION FRAMEWORK AND CASE STUDY. 11. Figure 1. Worldwide Comparison, Segmented by Sales by Inkontinenz - Deutschland | Statista Marktprognose. (n.d.). Retrieved January 31, 2018, from https://de-1statista-1com1001347th0217.emedia1.bsb-muenchen.de/outlook/80060000/137/inkontinenz/deutschland. Figure 1 shows that the United States was the biggest market for incontinence products in 2017, measured by sales. Germany is in third place with generated sales of 596,9 million Euros (“Inkontinenz - Deutschland | Statista Marktprognose,” n.d.). United States ranked 1 st for the sale of incontinence products in 2017, while Germany ranked third, with a total sales figure of €596.9 million (“Inkontinenz - Deutschland | Statista Marktprognose,” n.d.). Incontinence is a problem that is more common than most people realize it to be. It is defined as involuntary leakage or loss of urine and one in three women and one in ten men will be affected by it within their lifetime (BMR Health GmbH, n.d.). Sufferers tend to remain silent about their condition due to the embarrassing nature of incontinence while dealing with the negative impacts in other areas of their life (BMR Health GmbH, n.d.). Incontinence can be age related, but has other causes that affect all age groups (BMR Health GmbH, n.d.)..

(13) A DECISION FRAMEWORK AND CASE STUDY. 12. Research Purpose The purpose of this research is twofold. The first purpose is to show, with the help of a patent application, how an innovative product could be successfully introduced to the market. The second purpose is to show how an overall framework could look like in order to be able to easily identify whether a market introduction of an innovative product makes sense or not from a business perspective for start-ups or entrepreneurs. There are many models and frameworks available that can guide entrepreneurs through the decision process, however if one doesn’t have any business background one may not be aware of those or even struggle to properly apply them to their invention. Therefore, this work aims at providing a very simple and easy guide that even entrepreneurs without a business degree can use for a primary assessment of whether to proceed making their invention commercially available or not. A typical entrepreneur and inventor may have to make decisions like these on a frequent basis, since they are often very good at idea generation. Therefore, this framework is intended to help making good first decisions. Research Target and Range This thesis will be tailored specifically to the patent application of the incontinence valve of 2015, which is described in detail in chapter 4.2 and was mainly invented with the idea in mind of how to improve a patient’s life and how to avoid the negative impacts related to incontinence. This work is going to therefore focus on urinary incontinence and disregard fecal incontinence and is tailored specifically to the German market. As previously seen, Germany is the third largest market by sales for incontinence products (“Inkontinenz - Deutschland | Statista Marktprognose,” n.d.) and, given that the patent was applied for in Germany and the inventor’s origin is German, the focus of this study will be on Germany..

(14) A DECISION FRAMEWORK AND CASE STUDY. 13. Expected Research Outcome The expected research outcome of this thesis is the development of an overall framework that helps to determine whether to introduce innovative products to the market or not. Based on this framework, a decision will be made whether one should consider marketing the incontinence valve, and if yes, how a business model could look like. A major contribution of this thesis is that with its overall framework it will provide a first guidance for inventors on whether their invention is commercially applicable and in the long term marketable or not. This thesis will also show in detail how this can be done in a rather difficult market where there is a lot of uncertainty and demonstrate its use on a real-world case study. The thesis will review some of the most important literature in chapter 2, outline the research methodology in chapter 3, illustrate and analyze the case study in chapter 4, and conclude with chapter 5..

(15) A DECISION FRAMEWORK AND CASE STUDY. 14. Literature Review The objective of this literature review is to provide a thorough background on the existing literature regarding relevant theory, thoughts and frameworks of this thesis. The different topics examined here are about (1) entrepreneurial opportunities, (2) business planning, and (3) marketing and diffusion of new products. These three main areas will be the basis for building the decision framework and be of guidance for the outline of the market introduction of the incontinence valve. Entrepreneurial Opportunities Entrepreneurial opportunities are a “complex and multidimensional phenomenon” (Gartner, 1985) which make it interesting to take a closer look. The definition of entrepreneur and entrepreneurial opportunity, as well as the discovery of entrepreneurial opportunities will be considered in this section. Definition of entrepreneur. A person who sets up a new business is usually considered an entrepreneur. Researchers however, have offered different definitions of entrepreneurship (Brockhaus, 1987; Gartner, 1985). William Baumol categorizes those into two groups. He defines those as “firm-organizing entrepreneur” (Baumol, 1993), someone who creates and organizes a new business venture, and “innovating entrepreneur” (Baumol, 1993), someone who exploits an innovation and makes those economically viable. The first definitions one may come across can be generally thought as firm-organizing as for example is the definition offered by Richard Cantillion in the 17th century who defines an entrepreneur as someone who is self-employed and who must bear some amount of uncertainty (Baumol, 1993). Jean Baptiste Say goes a step further adding that the entrepreneur is uniting resources and organizing a new business (Baumol, 1993)..

(16) A DECISION FRAMEWORK AND CASE STUDY. 15. A century later Schumpeter offers an entirely different definition, which can be thought of as a definition of the innovating entrepreneur, by stating that “(…) the function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technical possibility for producing a new commodity or producing an old one in a new way” (Schumpeter, 1948, p.132). Researchers have later added different points such as the bearing of uncertainty, the exploration of opportunities (Kirzner, 1973) or the creation of organizations (Gartner, 1985). In this work, an entrepreneur will be defined in the sense of an innovating entrepreneur, as Schumpeter did, who tries to exploit an untried possibility while bearing uncertainty. Definition of entrepreneurial opportunity. Following the definition of an entrepreneur, we can define entrepreneurial opportunities as “(…)opportunities [that] bring into existence new goods, services, raw materials, and organizing methods that allow outputs to be sold at more than their cost of production” (Casson, 1982). Entrepreneurial opportunities and firm-organizing activities are different because the first includes the element of uncertainty and there is no basis that one could tweak or optimize (Baumol, 1993; Kirzner, 1997). New opportunities can arise when demand changes and customers preferences changes (Eckhardt & Shane, 2003). However, it is not enough to have entrepreneurial opportunities, and individual must be able to perceive those as such: “Before technological change leads to new processes, products, markets, or ways of organizing, entrepreneurs must discover opportunities in which to exploit the new technology” (Shane, 2000). Discovery of entrepreneurial opportunity. This raises the question about how individuals discover entrepreneurial opportunities. Here, most researchers seem to agree that discovery and search are the two main paths (Kirzner, 1997; Shane, 2000) and that the.

(17) A DECISION FRAMEWORK AND CASE STUDY. 16. determination of value is of importance (Shane, 2000). According to Drucker an “entrepreneur always searches for change, responds to it, and exploits it as an opportunity” (Drucker, 2014). Searching for opportunities presumes that the individuals wants to become an entrepreneur and therefore actively searches of possibilities. This is also described by the equilibrium framework that assumes that everyone recognizes all the opportunities and therefore only those wanting to be an entrepreneur, people with certain attributes, will actively exploit those (Shane, 2000). Yet, Shane argues that individuals discover opportunities, mostly about which they already have some kind of background information or exceptional information processing skills (Shaver & Scott, 1991) and thus the “differences in information about opportunities” (Shane, 2000) defines the origin of entrepreneurship. This view is supported by Hayek who argues that “(…) opportunity discovery is a function of the distribution of information in society” (Hayek, 1945). When technological change provides the basis for entrepreneurial opportunity, a true entrepreneur will most likely find it (Schumpeter, 2017). Shane states that for the procedure of discovery the “prior knowledge of markets, prior knowledge of ways to serve markets, and prior knowledge of customer problems” (Shane, 2000) are necessary. According to Kirzner the difference between search and discovery is that discovery involves the element of surprise, where one realizes that something that is readily available had been overlooked (Kirzner, 1997). Therefore, it can be concluded that “(…) people do not discover entrepreneurial opportunities through search, but through recognition of the value of new information that they happen to receive through other means” (Shane, 2000) and that opportunity identification is an important part when researching entrepreneurship, since the failure of discovery or discovering.

(18) A DECISION FRAMEWORK AND CASE STUDY. 17. the wrong opportunities would lead to entrepreneurial opportunities to go unnoticed (Shane, 2000). Business Planning The identification of the entrepreneurial opportunity leads to the next step of business planning, which describes the proposed undertaking and evaluates the chosen business model as well as it outlines the future undertaking and its path to success. Important to note is, that “the information asymmetry that creates opportunities in the first place, as outlined in the first section of this literature review, is subsequently reduced by the diffusion of information about the opportunity” (Eckhardt & Shane, 2003). The business planning process is therefore also a method of information transfer of the business opportunity itself and the method of how to pursue and exploit it (Eckhardt & Shane, 2003). According to Gartner creating a new business can be seen as “the organizing of new organizations” (Gartner, 1985, p.697) and consists of individuals, organizations, processes, and the environment as shown in Figure 2..

(19) A DECISION FRAMEWORK AND CASE STUDY. 18. Figure 2. A framework for describing new venture creation by Gartner, W. B. (1985). A Conceptual Framework for Describing the Phenomenon of New Venture Creation. Academy of Management Review, 10(4), p. 698.. Individuals are the people who start a new business and can be referred to as entrepreneurs. Organization describes the specific type of company that is to be started and process describes the actions the entrepreneurs have to take in order to start (Gartner, 1985). Environment describes the external conditions that are inflicted on the organization and which can be best described and analyzed using Porter’s five forces: barriers to entry, rivalry between competitors, substitution of products, bargaining power of suppliers and bargaining power of customers (Gartner, 1985). This rather simplistic framework illustrates the important interactions between the four most important pillars of a new venture creation, helps to understand such, and should therefore be kept in mind when considering the subsequent frameworks and models. The business plan. One way, and probably the most popular way, is to write up a business plan. Topics that need to be covered are a description of the project itself, the marketing plan, research and development that has been done and that is planned, an assessment of critical.

(20) A DECISION FRAMEWORK AND CASE STUDY. 19. risks, a thorough financial projection and a timetable with milestones (Kuratko, 2009). According to Kuratko these items are necessary as to depict what the venture is about, the future of it and the way to get there as proposed by the entrepreneur. (Kuratko, 2009). Rich and Gumpert argue that a good business plan needs to take the market, the investors, and the producers perspectives into consideration (Rich & Gumpert, 1985). Business plans are not only written when starting up a new business but also when searching for additional capital for new activities or already existing product lines (Rich & Gumpert, 1985). “Most individuals who enter self-employment face a binding liquidity constraint and as a result use a suboptimal amount of capital to start up their businesses” (Evans & Jovanovic, 1989, p.810). Besides providing investors with an overview of the proposed undertaking it also shows the entrepreneur whether the new business venture has a chance to be successful or not and can help to avoid business failure (Kuratko, 2009; Mancuso, 1985). As Evans and Jovanovic point out entrepreneurs take on most of the risk (Evans & Jovanovic, 1989) and a business plan therefore also provides a precise plan on how to deal with uncertainties and forces the entrepreneur to look at the project objectively and critically (Kuratko, 2009; Rich & Gumpert, 1985). In the end it “provides the entrepreneur with a communication tool for outside financial sources as well as an operational tool for guiding the venture toward success” (Kuratko, 2009). The business model canvas. Besides the traditional business plan, different frameworks, models and tools have been developed over the past years to help to illustrate the proposed business model and the idea and to demonstrate its value to outsiders. The foundations of how an organization creates and delivers value is what a business model should convey (Jackson, Scott, & Schwagler, 2015)..

(21) A DECISION FRAMEWORK AND CASE STUDY. 20. One of these tools is the business model canvas advanced by Alexander Osterwalder and Yves Pigneur. They argue that the challenge lies within capturing the concept in a simple and intuitive way without oversimplifying the complexity of the company’s operations (Osterwalder & Pigneur, 2011). This tool is intended to help design, test and build businesses as well as business strategies and therefore aids in opportunity evaluation and feasibility analysis (Jackson et al., 2015). For this they created the canvas (see Figure 3) that consists of customers, value proposition, channels, customer relationships, revenue, key resources, key activities, key partners and costs with the intent of making the best conceptual tool available and easy to use (Osterwalder & Pigneur, 2011). These nine building blocks cover four of the most fundamental areas of a company which are its customers, its offer, the infrastructure as well as the financial survivability (Osterwalder & Pigneur, 2011) and are positioned in a way that they are always next to a block which it is most influenced by and in turn also influences the most (Jackson et al., 2015)..

(22) A DECISION FRAMEWORK AND CASE STUDY. 21. Figure 3. Business Model Canvas by Contact, Press, Blog, Builder, C., Twitter, LinkedIn, Rss. (2015, February 26). Der Business Model Canvas: Dein Geschäftsmodell kompakt. Retrieved February 21, 2018, from https://ut11.net/blog/dein-geschaftsmodellkompakt-der-business-model-canvas/. Customers. A company normally tries to serve one or multiple customer segments. An enterprise should therefore carefully analyze for whom they want to create value and who their most important customers are, whether they are catering for a mass or a niche market and how diversified these markets are (Contact et al., 2015). Value proposition. The value proposition is how an enterprise tries to solve customers’ problems and to satisfy their needs. It depicts those products and services and shows how they satisfy the customers need for that specific segment and what kind of benefits the customer gets out of it (Osterwalder & Pigneur, 2011). Design, newness, lower costs, performance, convenience or brand can be some of the elements that add to the customer value creation. It is crucial to think about the exact value one can offer to the customer, what problems this value.

(23) A DECISION FRAMEWORK AND CASE STUDY. 22. solves and what needs it is satisfying as well as what the product range needs to look like in order to satisfy each customer segment (Osterwalder & Pigneur, 2011). Channels. The value propositions, described above, are delivered through channels of communication, distribution and sales (Osterwalder & Pigneur, 2011). Awareness, evaluation, purchase and aftersales are important factors that can heavily influence the choice of channels (William T. Jackson et al., 2015). Customer relationships. Companies should think about what type of relationship they want to build and maintain with their different customer segments, since these relationships will impact the overall customer experience. These relationships are then described in the Customer Relationship building block. Customer acquisition, retention and upselling are all possible motivations for customer relationships (Osterwalder & Pigneur, 2011). Customer relationships can compass from automated to personal (Osterwalder & Pigneur, 2011) and range from self-service, to personal assistance or even co-creation (Osterwalder & Pigneur, 2011). A company should therefore consider the type of relationship it wants to establish, analyze what relationships it has already established and its costs, and how to combine it with the rest of the business model (Osterwalder & Pigneur, 2011). Revenue. Revenue Streams are what results of a strong value proposition, namely the cash generated from sales to each customer segment. One-time customer payments or recurring revenues are the two types of revenue streams which can be priced through bargaining, auctioning, market dependent or fixed list prices (Osterwalder & Pigneur, 2011). A company should analyze what its customers are willing to pay for, what they currently are paying for, how they are paying versus how they would like to pay as well as identify the ration of the.

(24) A DECISION FRAMEWORK AND CASE STUDY. 23. contribution of each revenue stream to the comprehensive revenues. Asset sales, usage fee, subscription fee or renting are some examples of how to generate a revenue stream (Osterwalder & Pigneur, 2011). The type of revenue stream, the type of pricing and the type of pricing mechanism should all be based on the results of the above-mentioned analysis. Key resources. The Key Resources building block looks at the most important assets needed to ensure the business model will work as proposed (Jackson et al., 2015). They can be categorized as physical, intellectual, human or financial (Osterwalder & Pigneur, 2011). It is important to list the key resources required in order to meet the value proposition, satisfy the customer relationships, ensure good distribution channels and consistent revenue streams (Osterwalder & Pigneur, 2011). Key activities. Key Activities are what a company must do to function as a business and operate successfully (Osterwalder & Pigneur, 2011). “(…)[T]hey are required to create and offer a Value Proposition, reach markets, maintain customer relationships, and earn revenues” (Osterwalder & Pigneur, 2011, p.36) and can differ substantially depending on the type of business and their corresponding business model. Production, platform or network and problem solving are all categories of Key Activities (Osterwalder & Pigneur, 2011). Just like with Key Resources, in the end a company should figure out the key activities needed to sufficiently meet the value propositions, build good distribution channels, establish strong relationships with their customer and ensure a continuous revenue stream (Osterwalder & Pigneur, 2011). Key partners. When acquisitions or outsourcing are considered, Key Partners is a major building block that describes the network of partners and suppliers that are needed. Buyersupplier relationships, joint ventures, co-operations or strategic alliances are four different types of partnerships considered in the business model canvas (Osterwalder & Pigneur, 2011). These.

(25) A DECISION FRAMEWORK AND CASE STUDY. 24. are often necessary to reduce risk or to optimize ones business model (Osterwalder & Pigneur, 2011) and therefore need to be outlined in this section. Costs. All eight elements of the business model result in the Cost Structure building block (Osterwalder & Pigneur, 2011) where all the infrastructural costs are accounted for (Jackson et al., 2015). It is here where one can clearly see whether the business model will also function financially when subtracting the costs from the revenues and whether one has to optimize or reconsider some sections. The lean startup model. The lean startup model was introduced by Steve Blank who offered a customer development process and a step-by-step guide on how to develop an idea to a sophisticated business model (Rasmussen & Tanev, 2015). This was then further developed by Eric Ries who introduced the term “lean”, borrowed from the concept of lean manufacturing, to highlight the idea of eliminating waste and ensure that startups create products that the market and their customers actually want (Ries, 2011; Rasmussen & Tanev, 2015). A lean startup, as defined by Ries, is a company that pursues a hypothesis-driven approach when assessing an entrepreneurial opportunity and the new product development for a specific market segment (Ries, 2011; Rasmussen & Tanev, 2015; Tanev, 2017). This approach centers around putting an entrepreneurial idea into a hypothesis about a product related to a business model which is then tested using a Minimum Viable Product or prototype to see whether the hypothesis holds true or not (Rasmussen & Tanev, 2015; Tanev, 2017). The hypothesis-driven approach is supposed to guide a firm through the high conditions of uncertainty a startup faces and ensuring that the new product solves a specific customer problem instead of simply introducing a product that the market does not need or want (Ries, 2011)..

(26) A DECISION FRAMEWORK AND CASE STUDY. 25. A similar approach has been introduced by Nathan Furr and Paul Ahlstrom. Their threestep approach is supposed to help identify the customers pain points and set up hypothesis about what kind of minimum it would require to convince the customer to make an actual purchase (Rasmussen & Tanev, 2015). Subsequently, a short introduction on the key concepts of a Minimum Viable Product (MVP) pivot, and Build-Measure-Learn, important terms for a lean startup model. Minimum viable product (MVP). The Minimum Viable Product is the first minimal, yet functional product that is being developed in order to be able to gain first insights from the customer and start the build-measure-learn loop (Ries, 2011). The advantage of a Minimum Viable Product is that long hours of development, which may not be needed, depending on the customer’s feedback can be avoided and the actual product, even if only minimal, can be already introduced to the customers as early as possible (Tanev, 2017). Build-Measure-Learn. The Build-Measure-Learn loop needs to be seen as an iterative process. In the beginning a product, the Minimum Viable Product, is being built and given to some visionary customers who generate feedback and data. This feedback and data, which can be both quantitative and qualitative, is then analyzed in order to derive learnings from it. This loop is a very experimental loop, but it allows entrepreneurs to build a sustainable business and to test their ideas already from an early stage on (Ries, 2011). The lean startup model therefore argues in favor to build a sustainable organization around new products and services and improving its success rate through testing hypotheses and conducting experiments. Entrepreneurs should therefore consider to seek experimental results instead of relying on estimates, forecasts or projections (Ries, 2011)..

(27) A DECISION FRAMEWORK AND CASE STUDY. 26. Arthur Boni argues in favor for using the iterative approach of the lean startup model in the biopharmaceutical industry, explaining that the product development and the product fit into its designated target market could be confirmed or rejected easier (Boni, 2016). He further argues that by bringing together patients, physicians, payers and providers early on can help to validate the product and market fit and therefore make the medical industry more effective (Boni, 2016). Pivoting. Pivoting is a result of the Minimum Viable Product and the Build-MeasureLearn loop. Depending on the feedback of the customers, the data generated and the subsequent results, a startup may decide on a radical strategic change of course (Eric Ries, 2011). The recognition for the need of a change of direction at an early stage prevents startups of wasting resources on things that do not matter. Critics of the lean startup model argue, that too much feedback from the customers may lead the entrepreneurs to change their idea so often, that they become discouraged and may quit (Ladd, 2016). Another point is that, if entrepreneurs didn’t set up clear rules prior to customer feedback, when to stop testing and begin production of the product, the build-measure-learn loop may go on forever. Ladd therefore suggests that a strong strategy might be more important than sticking to the lean approach, which is backed by Davis Collis who claims that clear constraints for methods and markets should be considered when applying the lean strategy process, especially during the testing phase of the business model (Ladd, 2016). Marketing and Diffusion of New Products Until a new product or service isn’t dispersed to the final user it is basically useless (Wani & Ali, 2015). Therefore, it is important to look at the marketing and diffusion of new products which will be done in the following sections..

(28) A DECISION FRAMEWORK AND CASE STUDY. 27. Marketing concept & strategy. To help attain a smooth market introduction, a marketing concept should be developed beforehand during the business planning. Ideally it contains “what the market consists of, the understanding of marketing research, the development of a marketing plan, and the proper approach to a pricing strategy” (Kuratko, 2009). The marketing strategy formulation process consists of seven marketing activities which are the anticipation of market changes, the adaption of the strategy, the alignment of the organization to the strategy and the market, the activation of the implementation, the accountability for results, the attraction of resources, and the management of marketing assets (Moorman & Day, 2016). Marketing research is about collecting as much information as possible about the specific market and analyzing that information in order to gain insights (Kuratko, 2009). These insights lead to the development of a marketing plan. According to Luther a marketing plan should consist of plans for sales, promotion, customer service, the product itself, and research and follow a specific strategy that is closely aligned to the business goals (Luther, 2011). The pricing strategy can be a determinant of whether a business is profitable and successful in the long-run. “The degree of competitive pressure, the availability of sufficient supply, seasonal or cyclical changes in demand, distribution cost, the product’s life-cycle stage, changes in production costs, prevailing economic conditions, customer services provided by the seller, the amount of promotion done, and the market’s buying power” (Kuratko, 2009) are all factors that influence the pricing strategy. The ultimate price will probably not reflect all of the mentioned factors (Kuratko, 2009), however it is a very important topic when introducing a new product to the market and probably one in which the entrepreneur faces a high degree of uncertainty (Kuratko, 2009)..

(29) A DECISION FRAMEWORK AND CASE STUDY. 28. The 7P’s in marketing. The marketing mix of the seven Ps is a tool that is often used by businesses and marketers to help assess the offering of a brand or product. Product, Price, Place and Promotion where the original Ps developed by E. Jerome McCarthy in 1960 which were then extended in 1981 by Booms & Bitner with Physical Evidence, People and Process. Since then it has been widely accepted as a universal marketing mix (Rafiq & Ahmed, 1995). The product should be the one the market is asking for and should fit consumers demand. The price should represent a good value for the money spent and fit the product category. The right place is where one’s target segment likes to shop for the product in question and should be made available there. Promotion refers to the different communication channels such as advertising or social media. Even though multiple channels may be used at the same time, the marketing message should stay consistent. In addition to people, process and physical evidence, which will be described below more in detail, intermediaries should also be considered. They are often the interface between the company and the customer and therefore are not only responsible for the physical evidence (Rafiq & Ahmed, 1995), but also the process and the people. Intermediaries should be excluded when the image of a product or the quality are of utmost importance (Rafiq & Ahmed, 1995). Physical Evidence. Physical evidence refers to either the product, a service performed or the environment in which the service is performed. This may result in an obvious result (e.g. a new hairdo) or a printed statement or card of some sort, that states the provided service (e.g. membership card). Since customers use physical evidence to determine the quality, physical evidence is of utmost importance (Rafiq & Ahmed, 1995). People. People stand for all the employees that work within a company. Even though sales and customer service employees may have the major direct contact with the customers, it is.

(30) A DECISION FRAMEWORK AND CASE STUDY. 29. important to ensure that all employees are customer-centric and motivated to give their best as to ensure a successful marketing, diffusion of product and business continuation (Rafiq & Ahmed, 1995). Special attention should therefore be paid to the quality of the employees hired and to constantly monitor their performance since performance may vary considerably (Rafiq & Ahmed, 1995). Process. The process is defined as a flow of activities (Rafiq & Ahmed, 1995) of how the product is delivered to the customer as well as the process of customer service in general is an integral part of the marketing effort and part of what the customer is paying for. A smooth process can help generate higher customer satisfaction with the product or service and it is important to assure that customers know what the purchasing process looks like (Rafiq & Ahmed, 1995). The modern marketing model (M3). Due to the increase of new technologies and marketing channels, the marketing environment has drastically been altered in recent years. This led to a development of new frameworks of marketing such as the modern marketing model (M3) of Econsultancy. Econsultancy wants to provide a framework that is suitable for the future and does not only cover the ideal marketing mix but also brand and strategy while ensuring that the framework can be applied by big as well as small companies regardless of their industry. As can be seen in Figure 4, the modern marketing model consists of four main areas; strategy, analysis, planning and execution. Those are subdivided into smaller categories. While marketing strategy and marketing orientation remain the same in the classical and the digital sense, the other categories differ somewhat from what they used to entail in the classical marketing sense and what they also entail nowadays in the digital age. Customer insights, for example, was mainly.

(31) A DECISION FRAMEWORK AND CASE STUDY. 30. based on market research, pricing and segmentation, targeting and positioning. In the digital age Econsultancy suggests that it should also include digital analytics, social media, pay per click and search engine optimization data (Ashley Friedlein, n.d.). Interesting is also the last category of data and measurement. While this was always an important facet of marketing, it is nowadays a lot easier to obtain relevant data in order to measure the outcomes of one’s marketing activities and therefore better tailor and optimize those efforts.. Figure 4. The Modern Marketing Mix (M3) by Ashley Friedlein. (n.d.). The Modern Marketing Model (M3). Retrieved March 15, 2018, from https://m3.econsultancy.com/ Timing of a market introduction. Given that the process of business planning gives away the business opportunity and makes it easier for others to do the same, a timely and thought through market introduction of the product or service is important. Even though technological.

(32) A DECISION FRAMEWORK AND CASE STUDY. 31. innovation prolongs the time until the product reaches the market place (Schoonhoven, Eisenhardt, & Lyman, 1990), researchers tend to agree that the speed with which the product reaches the market can make the difference between success or failure (Zahra & Ellor, 1993) since a delay of the introduction date may also lead to a delay of the flow of benefits and increase chances that competitors penetrate the market first (Baumol, 1993). Building a strong name recognition, controlling a large market share and capturing premium market segments are just a few of the benefits a firm can enjoy when being the first to introduce a new product (Duffy & Kelly, 1989). It gives a company the chance to set industry standards and to create an initial monopoly which allows to charge higher prices (Zahra & Ellor, 1993). It is important to note, however, that if the speed of the market introduction is not connected to a company’s competitive strategy, speed may not offer any value at all (Zahra & Ellor, 1993). Benchmarking, strategic thinking and a plan for commercialization are therefore of utmost importance (Zahra & Ellor, 1993). For startups especially, a fast product introduction may be beneficial to achieving external visibility, gaining an early market share, to increasing the chances of survival, and to gaining greater financial independence (Schoonhoven et al., 1990). The latter holds especially true for innovations where an innovation’s economical value is related to the time that has passed by between the initial investment and the time of the first cash flow (Gilman, 1982). Prior experience in the industry or start-up experience both help with a faster market introduction. Be it due to a shorter learning curve or the experience of having to multitask multiple things at once, Schoonhoven et al. argue, that both can have a major impact in the speed of a market introduction..

(33) A DECISION FRAMEWORK AND CASE STUDY. 32. Customer experience. A deep understanding of the market and one’s customers is necessary in order to ensure a smooth marketing and diffusion of new products. Tools that can be used to understand the customer better and ensure a perfect market introduction are not only the value proposition canvas mentioned in the previous section, but also the customer journey or using personas. The literature on customer experience focuses especially on “the context in which experiences arise and (…) the journey mapping and measurement (…) of customer experience” (Lemon & Verhoef, 2016, p.72). A customer journey map can be described as a diagram that outlines every step the customer goes through when interacting with one’s company (Richardson, 2010) while illustrating the emotional and rational thoughts a customer might have. Recently, customer journeys have also started to include the roles of partners or other external influences (Chandler & Lusch, 2014) and taken a network perspective (Tax, McCutcheon, & Wilkinson, 2013). This approach helps to gain a deep understanding of the customer experience (Lemon & Verhoef, 2016). Persona development. Similarly, to the customer journey map, developing a persona of a potential customer makes it easier to understand the challenges, needs and actions of the customer and marketing content can be adapted accordingly. Kusinitz defines a persona as “ a semi-fictional representation of your ideal customer based in market research and real data about your existing customers” (Kusinitz, 2014). Personas are still often underused in the area of consumer health technologies (LeRouge, Ma, Sneha, & Tolle, 2013). Innovation diffusion theory. Innovation diffusion theory is based on the desire to better understand, and therefore to be able to predict and manage, the dissemination of innovations.

(34) A DECISION FRAMEWORK AND CASE STUDY. 33. (Gourville, 2005). Managers and Entrepreneurs alike deem this important to forecast whether the innovation or new product are going to be accepted, to develop the product in a way that the product adoption can be facilitated and to use the appropriate marketing activities to tailor to a faster product adoption (Gourville, 2005). When considering the diffusion of new products one necessarily comes across the innovation diffusion theory that was introduced in 1962 by the economist Everett Rogers (Wani & Ali, 2015) which focuses on the dissipation of innovative ideas and technologies in a social system (Rogers, 1962). Rogers defines diffusion as a process through which an innovation is being communicated to society and views innovations as a progression or transformation of products to better suit societies needs (Rogers, 2003). Abbott Payson Usher proposes to classify inventions as (1) continuous innovation, which is the least disruptive form, (2) dynamically continuous innovation and (3) as discontinuous innovation, which involves the introduction of a complete new product (Usher, 1954). Ismail Sahin argues that the innovation diffusion theory can be divided into the four elements of innovations, communication systems, time and social system (Sahin, 2006). Innovations is what is being perceived as new, communication systems describes the channels where consumers communicate with each other, time describes the speed with which the innovation is being adopted, and social system describes the fact, that an invention fails if a society as a whole does not recognize it (Sahin, 2006). The diffusion of an innovation can also be thought of as a process which reduces uncertainty (Rogers, 2003) and the decision whether to adopt or abate an innovation is normally made after some kind of thought process (Barnett, 1979)..

(35) A DECISION FRAMEWORK AND CASE STUDY. 34. Rogers divided the population into five specific segments according to the rate of adoption. These segments are called Innovators, Early Adopters, Early Majority, Late Majority and Laggards (Rogers, 1995). Figure 5 shows the notional percentages that Rogers came up with.. Figure 5. Adopter Categorization by Rogers E.M. (2003). Diffusion of innovations. New York: Free Press.. The innovators are the smallest group with only 2.5% and are often described as risktakers who are open to new technologies and willing to inform and educate themselves. Generally, they are open for change and are fast in adoption to it (Wani & Ali, 2015). Early Adopters are generally more restrained by their social status as opinion leaders than Innovators and therefore are not as open to change, yet willing to evaluate new products for others in society (Wani & Ali, 2015). This special role is why an innovations success or failure depends mainly on this group who is also very technology focused and somewhat willing to experiment and take a calculated amount of risk (Wani & Ali, 2015). The Early Majority and the Late Majority both make up 34% each. The Early Majority normally relies on the information provided to them by the Early Adopters and it is important to them to be in the trend (Wani & Ali, 2015). The Late Majority and Laggards are often the ones who are the most resistant to adoption and who mostly.

(36) A DECISION FRAMEWORK AND CASE STUDY. 35. have a lower status and are poorer and who are very skeptical to new things in general (Wani & Ali, 2015). According to Rogers and Shoemaker relative advantage, compatibility, complexity, trialability, and observability are the five factors that can influence the rate of adoption of an innovation (Rogers, Shoemaker, & Floyd, 1971). The rate of adoption can be described as the relative speed with which an innovation is being embraced within a social system (Wani & Ali, 2015). Relative advantage describes extent to which the new innovation is perceived better than the product it replaces, whether it be an economic or noneconomic benefit (Gourville, 2005). Compatibility describes the consistency with ones experiences and values, the higher the compatibility the higher the rate of adoption (Gourville, 2005). Complexity describes the difficulty of the usage and understanding of the new product (Rogers, 1995). The less complexity involved, the easier for the customer or user to understand and the faster the adoption (Gourville, 2005). Trialability describes the extent of which an invention can be tried out and experimented with beforehand (Rogers, 1995). There is a positive correlation between trialability and adoption (Gourville, 2005). The last factor is observability which describes the extent to which others can observe that this product is being used (Rogers, 1995). As Figure 6 illustrates, the rate of adoption of an innovation depends on many factors. According to Rogers the main categories are the perceived attributes of innovation the types of innovation decision, the communication channels used, the nature of the social system as well as the extend of change agents (Rogers, 1983). Important to note is that Rogers has often been criticized for using a very agrarian approach and that while his theories may hold true in the agricultural fields they may not hold.

(37) A DECISION FRAMEWORK AND CASE STUDY. 36. true in other fields (Gourville, 2005). In addition, the adoption of innovative products is highly uncertain and their rate of failure largely succeeds their rate of success (Gourville, 2005).. Figure 6. Variables Determining the Rate of Adoption of Innovations by Rogers E.M. (1983). Diffusion of innovations (Third edition). New York: Free Press.. From the perception of an entrepreneurial opportunity to the market introduction an entrepreneur will need a lot of endurance, time and resources. To conclude the literature review “the work of the innovator makes fascinating reading just because it always entails something different from what has happened before, and because the story is always full of surprises” (Baumol, 1993)..

(38) A DECISION FRAMEWORK AND CASE STUDY. 37. Research Methodology – The Case Study Approach The research methodology applied in this thesis is the case study approach. “(…) A case study allows investigators to focus on a “case” and retain a holistic and real-world perspective” (Yin, 2014). It helps to narrow down a very broad topic by isolating a special case in the realworld setting and is therefore the appropriate methodology for this work.. Figure 7. Doing Case Study Research: A linear but iterative process by Yin, R. K. (2014). Case study research: design and methods (Fifth edition). Los Angeles: SAGE.. Figure 7 shows the six stages of the case study approach: planning, designing, preparing, collecting, analyzing, and sharing (Yin, 2014). The Case Study Approach - Planning Planning consists of selecting and understanding a relevant situation for doing a case study and deciding whether a case study is the right methodology for it. While the selection and understanding of the relevant situation has already been introduced in the first chapter of this thesis, the reasons for choosing the case study approach are twofold: First, the topic is about a current case where the relevant behaviors can’t be manipulated and second, the research question.

(39) A DECISION FRAMEWORK AND CASE STUDY. 38. is phrased with a “how”, which according to Yin is exactly how a case study research question should be posed. Since this thesis will answer the questions on how an overall framework could look like that helps inventors determine whether to market their product or not and on how the incontinence product of the patent application can be introduced to the market under limited resources, this study aims at answering two “how” questions which confirm that the case study approach is appropriate. The Case Study Approach – Design The second stage of the case study approach is about how to design such a study. In this stage, it is important to keep the outline in mind and to ensure that all compiled data is relevant (Shuttleworth, 2008). When designing a case study, it is important to do a thorough literature review and to take enough time for posing the research question and objectives of the study. Yin defines this as the most important step of the entire process (Yin, 2014). Once this has been accomplished, one can proceed to devise the premises and to link the relevant data to those. The exact research question and objectives as well as the literature review can be found in the first two chapters of this thesis. As a last step, criteria for interpreting the findings should be developed. This means that theory, premises and related issues should be developed in this stage to guide the case study and to be able to generalize the findings in the end. The Case Study Approach – Preparation Preparation is the third stage of the case study approach. According to Yin “good preparation begins with (1) the desired skills and values on the part of the case study investigator (…) (2) training for a specific case study, (3) developing a protocol for the study, (and) (4).

(40) A DECISION FRAMEWORK AND CASE STUDY. 39. screening candidate cases” (Yin, 2014). Preparation has already been done with previous academic research projects and relevant course work in this area. The Case Study Approach - Collection When collecting case study evidence, documentation, interviews, archival records, direct observation, participant-observation and physical artifacts should be considered. This case study will use all these different types of evidence, except for the participant-observation since the relevant product is not fully developed yet. Data collection will start with secondary research of online sources, documentation, and archival records and then proceed to primary research which will help to refine the data already collected and gain deeper insights to the matter through interviews and direct observation. Interviews will be conducted with the inventor of the product, a medical surgery specialist in gynecology and obstetrics and with a head of day care nursing services. All relevant and obtainable data should be assembled and most importantly a chain of evidence must be maintained. In addition to this, when collecting evidence from electronic sources, extra care must be exercised to prevent misinformation or usage of unreliable sources. The Case Study Approach – Analysis Analysis of the collected data, the fifth stage of the case study approach, is done by displaying the data in various ways while looking out for patterns or insights that help to develop a more general strategy. A major part of the time is allocated to the analysis of the collected data. Given that the topic and collected data are very vast, arranging the data and finding important insights require major attention. In this stage, it is also important to address other possible interpretations of the data that could be competing..

(41) A DECISION FRAMEWORK AND CASE STUDY. 40. The Case Study Approach – Sharing The last stage consists of sharing. For this the audience should be defined before any text is composed and enough data should be presented so that the readers can come to their own conclusions. One should keep in mind that the audience of this thesis consists of the Professor and review committee that will be evaluating this work, the inventor and entrepreneur of the product presented in this thesis, other entrepreneurs as well as anyone in the academic community who is interested in reading about how to bring a new, innovative product into a challenging market. The final work should then be revised and reviewed until it is satisfactory..

(42) A DECISION FRAMEWORK AND CASE STUDY. 41. Case Study The case study approach was described in detail in the previous chapter. This chapter will provide the actual case study including a brief product description, the current issue, a market analysis, a description of the competitive products, and some further in depth analysis at the end. An evaluation framework for innovation feasibility will be resulting of this, leading to a recommendation for the case study. Introduction A sudden health issue of a family member and the arising issues of how to manage the resulting incontinence led the inventor, Stefan Burckhardt, to think about a solution that allows one not to lose face when one is no longer able to control the flow of urine (I1-2-1). Given the inventor’s technical background (I1-1-1) and his dissatisfaction with the existing incontinence solutions, a simple and discreet method on how to urinate somewhat selfsufficient, without having to carry a urine bag around with oneself, was quickly drawn up. A challenging aspect was developing a valve that would open and close without a source of energy (I1-2-2). Once an innovative incontinence device was developed, Mr. Burckhardt submitted a patent application for “a device to regulate the flow of urine and a system to regulate of urine” on July 27, 2015. Mr. Burckhardt, who describes himself as a business man with an international career (I1-1-1), gave this issue much importance because he saw an untapped market and felt like many people, including himself, would want to avoid finding themselves in a similar situation when they are old (I1-3-1) and remain self-sufficient for as long as possible..

(43) A DECISION FRAMEWORK AND CASE STUDY. 42. Product The incontinence valve described in this section is depicted in Figure 8. The invention is a device (3) that regulates the flow of urine (2) when suffering from incontinence (07890001DE, 2015). This purely mechanical device with a casing (4) that can be inserted in the human urethra (5) works without any energy sources. The incontinence valve (3) is approximately 10-15 mm long and has a diameter of 4.5 – 6 mm and can be adjusted in its length (07890001DE, 2015). It also includes a system on regulating the urine flow and a hand-held activator. The hand-held activator allows the patient to open and close the gate mechanism (6) through activation piloting (07890001DE, 2015).. Figure 8. Schematic View of the System. Adopted from Patent Application 07890001DE, 2015..

(44) A DECISION FRAMEWORK AND CASE STUDY. 43. Figure 8 depicts the human bladder (1) and the system which is a very simple mechanism that enables an easy regulation of urine flow that only needs to be exchanged every ten years (07890001DE, 2015). This incontinence valve can be inserted into the human urethritis through a catheter and is therefore a minimal invasive application that does not need any surgery. The replacement of the valve can also be executed without surgery. This incontinence valve is adjoining the outer bladder sphincter (7) and is located downstream of the bladder sphincter. It is applicable to both sexes and only opens when it is activated through the hand-held activator which allows for controlled urination (07890001DE, 2015). Patent Application This section aims at providing the reader with a quick overview of the patent process in Germany, a recount of the submission of the patent, an overview with the competing patents and an analysis of the resubmission opportunity. Patent Process in Germany. Inventions that can be patented have to be technical inventions, which are new, based on an innovative activity and are commercially applicable (“DPMA Patente,” n.d.). An invention is considered as new, if it is not already considered as state of the technology which comprises all knowledge that has been made publicly available verbally or in writing before the date of submission of the patent application. An innovation is based on an innovative activity if it is not self-evident to an expert of the appropriate technical field and is superior to the expertise of an average professional (“DPMA Patente,” n.d.). If the invention can be used or produced commercially, it is considered commercially applicable (“DPMA Patente,” n.d.)..

(45) A DECISION FRAMEWORK AND CASE STUDY. 44. The patent application in Germany includes the patent claims, description, drawings and text and consists of five parts: the application form, the registration documents, a summary, models and samples, and the designation of the inventor (“DPMA Patente,” n.d.). Once the patent application has been submitted, the patent office investigates whether the patent claims are valid or whether they are not commercially applicable, not an invention, not a uniform invention, or whether they are excluded from being patented (“DPMA Patente,” n.d.). Independently of the procedural status the patent application is being publicized eighteen months after the submission date. Subsequently, the public has access to the records of the individual patent applications (“DPMA Patente,” n.d.). Once the patent has been granted it is publicized and the legal effects set in. If the patent applicant is willing to grant a license, everyone can use the patent in return for a fee and the patent applicant is granted a reduction of annual patent fees (“DPMA Patente,” n.d.). Submission of Patent. On July 27, 2015 the patent was submitted to the German patent office. It states that the device aims at enabling a mostly maintenance free and easy regulation of the urine flow through simple design-engineering methods. Specifically, there are ten concrete patent claims: (1) The incontinence valve to regulate the flow of urine, with a casing that can be inserted in the human urethra with an opening in longitudinal direction which has a closing mechanism (07890001DE, 2015). (2) The closing mechanism is made of ferromagnetic metal or plastics which contains ferromagnetic particles (07890001DE, 2015). (3) The closing mechanism can be opened through a magnetic field which is induced through the handheld device that generates electromagnetic waves (07890001DE, 2015). (4) The closing mechanism is diagonal or inclined in the opening with a stretched tongue (07890001DE, 2015). (5) the closing.

(46) A DECISION FRAMEWORK AND CASE STUDY. 45. mechanism is plastic or rubber coating (07890001DE, 2015). (6) The closing mechanism is fixated at the interior surface of the opening (07890001DE, 2015). (7) The casing has a cylindrical form and is made of stainless steel or skin tolerated plastic (07890001DE, 2015). (8) The opening has a round or rectangular cross section (07890001DE, 2015). (9) The casing has a diameter of 4.5 to 6 millimeters and/or a length of 10 to 15 millimeters (07890001DE, 2015). (10) The handheld device features an electromagnet to produce a magnetic field or a transmitter unit to produce electromagnetic waves (07890001DE, 2015). Competing Patents. Patents that have been found to offering similar claims and on which grounds the patent was denied are listed and briefly described in this section. Patent DE 4024950 A1 is about a catheter that stays in the urethra with a drainage valve with which the user can regulate the flow of urine. This is done through a permanent magnet through which the valve which contains a ball element in its chassis can be opened (DE4024950A1, 1991). This device is intended for the males with aconuresis (DE4024950A1, 1991). Patent US 5,366,506 is a catheter with a valve which has a casing and a permanent magnet which is embedded in a non-magnetic, biocompatible material. The frame of the valve is a plate. The opening is controlled either through lifting or through slewing of the magnet (US005366506A, 1994). Patent US 6,234,956 describes an urethra valve that is controlled through a handheld device with a rotatable permanent magnet. The rotatable permanent magnet interacts with a magnetic rotor which is mounted in the casing of the urethra valve, and lifts a hemispherical valve unit toward the valve opening (US006234956B1, 2001). The urethra valve is inserted directly in the urethra and has a rippled outer surface for fixation (US006234956B1, 2001)..