Activity-Based Essay Question: Diffusion Model Diagnosis Challenge

This question requires you to apply diffusion of innovation theory to a real-world case. You must analyse which diffusion model best explains the spread of a specific innovation and justify your reasoning using theoretical concepts from the module.

Choose ONE of the following innovation cases:

1. Tesla electric vehicle adoption in Norway
2. TikTok’s rapid global expansion
3. SME adoption of cloud accounting software in South Africa

Task

Write a structured analytical response in which you:

1. Identify ONE

   diffusion model that best explains the spread of the chosen innovation:

   • Gravity Model
   • Epidemic Model
   • Equilibrium Model
   • Forecasting Consumer Behaviour Model
   • Early Bird Advantage Model

2. Justify your choice by explaining:

   • the main driver of diffusion (for example geography, information, rationality, profit, or timing),
   • the key parameters influencing adoption, and
   • why alternative models are less suitable.

3. Conclude with a short strategic recommendation: If you were responsible for accelerating diffusion, what intervention would you implement?

Length guideline: 350–500 words.

Total: 15 Marks

Division of Labour in the Innovation Process

In innovation management, different actors play different roles in managing and executing innovation projects.

Match each responsibility with the correct role.

Roles:

• Project Leader
• Head of Project (Program)

Select the correct role for each responsibility.

Technology Trajectory Concepts

Match each concept to the best interpretation of the diagram.

Question (6 marks)

Economists and innovation scholars sometimes argue that Artificial Intelligence (AI) may represent the beginning of a Sixth Kondratieff Wave of technological development.

Which of the following statements support the argument that AI may represent a new technological wave or a General Purpose Technology (GPT)?

Select ALL correct statements.

Case Study: Red Bull and Coca-Cola Innovation

Many people assume that innovation only occurs through new technology. However, the histories of Red Bull and Coca-Cola show that innovation can take many different forms.

Coca-Cola was originally developed in 1886 by John Pemberton as a medicinal tonic intended to relieve headaches and fatigue. Over time, the drink evolved from a pharmacy product into one of the most recognizable global consumer brands. Coca-Cola’s success was driven not only by the product itself but by innovations in branding, distribution systems, bottling networks, and global marketing strategies.

Red Bull followed a different path. The drink was inspired by Asian energy tonics and was introduced to Western markets in the 1980s. Instead of competing directly with soft drinks, Red Bull created an entirely new market category: energy drinks. The company focused on innovative marketing strategies such as extreme sports sponsorships, youth culture branding, and event marketing, which positioned the drink as a lifestyle product rather than just a beverage.

Both companies illustrate how innovation may arise through market positioning, branding, and strategic choices, rather than purely through technological breakthroughs.

Question (15 Marks)

Using the case study above and your understanding of innovation management, identify and explain five deeper innovation insights that can be derived from the strategies used by Red Bull and Coca-Cola.

Your answer should demonstrate analytical thinking and should explain how the cases illustrate broader principles of innovation management.

Do not simply list facts from the case study. Interpret what the examples reveal about innovation.

Diffusion of innovation refers to:

Innovation thresholds represent:

Radical innovation typically:

Which of the following is an example of process innovation?

Which organisational structure best supports innovation?