Mitigating Uncertainty by Including the Customer in the Fuzzy Front-End of Innovation - A comparative multiple-case study of Polestar and On to identify successful customer collaboration

Abstract

The fuzzy front-end (FFE) is the first phase of new product development which is associated with high levels of uncertainty. Mitigating uncertainty is a key factor to enable successful innovation. With the inclusion of uncertainty reduction activities within the FFE firms can accurately forecast market adoption, user experience and reduce capital expenditures. Current literature explores the relationship between type of innovation and levels of uncertainty and further identifies customer co-creation as a strategic tool in today's ever changing business environment. This thesis investigates Polestar and On using an abductive research approach where qualitative data is collected to investigate how both firms collaborate with customers to reduce the level of uncertainty in the FFE. This paper contributes to existing literature on uncertainty reduction in the FFE by introducing a conceptual framework. It shows the relationship between four factors: (1) type of innovation, (2) level of uncertainty, (3) customer co-creation and (4) type of users, and further elaborates on how Polestar can include certain customers in the innovation process to facilitate successful innovation. The visualization helps to understand that the type of innovation impacts the uncertainty of the project which further influences the level of customer co-creation and what characteristics to involve. The main finding is that customer co-creation enables for uncertainty reduction in the FFE and depending on the type of innovation, the customer can contribute with various amounts of insights. It further shows that certain customer characteristics are beneficial to involve in innovation depending on what outcome the firm aims to achieve.