Hybrid modeling and simulation for innovation deployment strategies

Abstract

PurposeThe purpose of this paper is to provide a simulation model for assessing innovation deployment strategies by evaluating and comparing their outcomes using a hybrid modeling and simulation of agent‐based modelling and simulation (ABMS) and system dynamics (SD). Since successful deployment of innovations in any organization is as important as the innovations themselves, how to choose a suitable deployment strategy and assess its effectiveness before actual implementation is a critical task.Design/methodology/approachThis paper adopts a hybrid modeling and simulation approach combining the advantages of agent‐based modeling and system dynamics to study the activities and strategies involved in innovation deployment. The developed model was verified and validated with the data from GM's OnStar project.FindingsThe research demonstrates that evaluating various deployment strategies for desirable results through hybrid modeling and simulation is possible and useful by finding critical factors and making appropriate forecast, which would aid managers in assessment of innovation deployment strategies and deployment decision‐making processes.Research limitations/implicationsThe hybrid modeling and simulation approach provides a powerful tool in various study fields, not only in industries, but also suitable to evaluate the system outputs in both macroscopic and microscopic point of view for many strategy‐making or consulting firms. The presented work is meant for proof‐of‐concept, so numerous expansions are necessary for use in different projects.Practical implicationsFor the case evaluated in this paper, it is found that a customer‐oriented strategy outperforms a cost‐oriented strategy in market share as well as customer satisfaction and profit. Cooperation and R&D are essential innovation drivers, but from the study, customer satisfaction does not solely depend on technical advantages. Alliance is a key factor to reduce the cost and risk of uncertainties. The structure and approach of the presented hybrid simulation model can be adopted for other cases to derive conclusions.Originality/valueThe originality of the paper lies in the way of adopting a hybrid modeling and simulation approach to study the effects of innovation deployment strategies. The model can be modified and used in a wide range of organizations to evaluate different strategies and aid decision‐making processes.