Innovation Case Studies - NUI Galway€¦ · Web viewCoca-Cola’s Re-Entry and Growth Strategies in China. Innovation Type: Strategy and Process Innovation. Background: The Coca-Cola

The Making of BOEING 777

The Making of BOEING 777

Innovation Type: Product and Process Innovation

Background: When Boeing announced the development of a new airplane model - Boeing 777 - in the late 1980s, many aviation experts wondered about the rationale behind the decision. They questioned the need for a new model since Boeing’s highly successful 747 model had been flying successfully for over 30 years.

Goals: To make the 777 model technically superior as compared to other competing models during the time of its launch.

Actions (Actual Ideas): The 777 was designed and developed in close collaboration and involvement

of Boeing’s customers, fellow aircraft manufacturers, airline users, engineers, finance experts, technicians and computer experts.

Various computer based technologies like CAD, CAM and CATIA were used in designing the 777.

Teams: Boeing and Boeing’s customers, fellow aircraft manufacturers, airline users, engineers, finance experts, technicians and computer experts

Results (Benefits): The 777 has a distinction of the first paperless designed aircraft in the

aeronautical history. The Boeing 777 family came to be known as the builders of the most

technologically advanced aeroplanes. The 777 design, innovative features and approach to manufacturing

established a benchmark for development of aircraft in future. The management and technical approach used to develop the 777 were applied

to a number of projects including the International Space Station.

URL: http://icmr.icfai.org/casestudies/catalogue/Operations/OPER044.htm

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Revolution in the Global Aviation Industry

Revolution in the Global Aviation Industry

Innovation Type: Product and Service Innovation

Background: The aviation industry experienced a downturn in the early-1990s because of the worldwide recession and the Gulf War. Capacity overload became a common problem in most companies. Many airlines started focusing on cutting costs, reducing capacity growth, and increasing load factors. However, customers began to demand better services, which made the costs rise again.

Goals: To attract and retain customers, and make air travel facilitates economic growth, world trade, international investment and tourism.

Actions (Actual Ideas): Electronic booking of tickets services were launched. Entertainment systems, advanced designing of seats and aircraft interiors were

introduced.

Team: All airlines

Results (Benefits): By the beginning of the 21st century, air travel had emerged as one of the

largest industries in the world. The industry was seen by many nations as one of the key industries supporting

their economic activities.

URL: http://icmr.icfai.org/casestudies/catalogue/Innovation/BREP015.htm

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Six Sigma at Motorola

Six-Sigma1 at Motorola

Innovation Type: Product and Service Innovation

Background: The US based Motorola Inc. lost business to its Japanese competitors in1981.

Goals: To achieve a ten-fold improvement in the quality of its products and services.

Actions (Actual Ideas): An ambitious and innovative quality drive --- Six-Sigma, was launched in

1981.

Teams: Bill Smith (Smith), a Motorola engineer, was responsible for linking the term of Six-Sigma with the company’s quality initiatives.

Results (Benefits): Motorola’s Six-Sigma quality target achieved not more than 3.4 defects per

million products. It also achieved customer satisfaction by providing the best quality products

and services, and significantly increased in company’s sales. Motorola acquired the reputation of being the quality leader, not just in

manufacturing but in every process including customer relations. Between 1986 and 1988 alone, Motorola received 50 quality awards, and

became the only company in the world to have received the Malcolm Baldrige National Quality Award twice


1 The term ‘Six Sigma’ comes from the field of Statistics. Its origin as a measurement standard can be traced back to Carl Frederick Gauss (1777-1855) who introduced the concept of the normal curve. Six Sigma as a measurement standard in product variation could be traced back to the 1920s. Bill Smith (Smith), a Motorola engineer, was responsible for linking the term with the company's quality initiatives

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DHL’s Business Strategy in China

DHL's Business Strategy in China

Innovation Type: Strategy Innovation

Background: The rapidly improving business environment in China and its entry into the World Trade Organisation in 2001 attracted many multi-nationals to the country. DHL was among those who recognised the potential for growth in the country's express logistics industry.

Goals: To become an integrated “one-stop” supply chain solutions provider, offering services in express, air & ocean freight and overland transport.

Actions (Actual Ideas): A massive expansion program was initiated. “China Domestic”, an international express service was launched, as a part of

the duo’s strategy to respond to the fast-changing customer requirements. A door-to-door delivery service particularly targeting parcels and freight items

was offered. “Track-and-Trace” technology was implemented

Team:

Results (Benefits): DHL was able to offer shorter delivery and pick-up times, besides better

customer service and shipment visibility. DHL emerged as the world’s leading express and logistics company.

URL: http://icmr.icfai.org/casestudies/catalogue/Business%20Strategy2/BSTR138.htm

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BMW’s Innovation Strategies

BMW's Innovation Strategies


Background: The Munich based Bayerische Motoren Werke AG (BMW) automobile company grew into one of the leading automobile producers in the world by the 1990s, and radically changed the way BMW was handling “innovation process management” at its automobile division.

Goals: To develop and demonstrate exceptional skills in constantly creating and capturing value, through its innovations and development of new products.

Actions (Actual Ideas): The new innovation management system was developed and implemented in

the 1990s. Let innovation be the driving force for its product development process

throughout the late 1990s.

Teams:

Results (Benefits): BMW was able to exploit various path breaking technological innovations,

right from the idea generation stage to the market introduction stage. The company was able to develop continuous stream of new products and

brands. BMW successfully withstood competitive pressures and held on to its market

position, and established itself as one of the leading players in the premium segment of the global automobile market.

BMW was awarded the Outstanding Corporate Innovator (OCI) title for 2002 by the Product Development & Management Association (PDMA).


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Marriott's Customer - Focused E-Business Strategy

Marriott's Customer - Focused E-Business Strategy

Innovation Type: Strategy and Process Innovation

Background: In 1982, Marriott acquired Host International, a leading hospitality services provider in the US, becoming the largest operator of airport terminal food, beverage and merchandise facilities in the US.

Goals: To provide better customer service by using IT proactively and through the facilities on offer through its website.

Actions (Actual Ideas): Several innovative technologies had been introduced and implemented before

the competitors did. For instance, Marriott Automated Reservation System for Hotel Accommodation (MARSHA) was launched in the 1980’s, which was a totally new concept of hotel reservation in the hospitality industry at that time.

$70 million was invested by the company over a two-year period to implement a variety of IT applications in diverse functional disciplines such as sales, accounting and personnel.

Continuous improvements in its business processes were made. An e-business strategy was adopted in 1998.

Teams:

Results (Benefits): The company was switched over from a decentralised property-orientation to a

centralised customer-orientation in its services. Clients are given access to the services offered by the entire Marriott chain of

hotels and resorts through the company’s website. The company’s ability to serve its clients was boosted, and its financial

performance was strengthened. Marriott International became the first hospitality company to win the CIO -

100 awards from CIO magazine for four consecutive years (2000-03).

URL: http://icmr.icfai.org/casestudies/catalogue/IT%20and%20Systems/ITSY035.htm

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Fannie Mae's Human Resource Management Policies

Fannie Mae's Human Resource Management Policies

Innovation Type: Culture Innovation

Background: Federal National Mortgage Association (known popularly as Fannie Mae), achieved recognition not only for its financial performance but also for its progressive human resource (HR) policies.

Goals: To recognise and retain talent, irrespective of class/gender/nationality.

Actions (Actual Ideas): New HR policies were developed and implemented to offer a wide variety of

financial, health and career benefits, some of which were “healthy living” day off, paid child adoption leave, elder care and child care programs, flexible work options, Assistance for Collegiate Education (ACE) Program, Corporate Mentor Program, mandatory diversity training, 10 hours of paid-off each month for volunteer activities, and Employer-Assisted Housing (EAH).

The Office of Diversity was created in 1992 to promote diversity at the organisation.

Teams:

Benefits: The company earned the reputation of being one of the best companies to

work for. The company had been included in Fortune’s Best Companies for Minorities

list every year since 1998.

URL: http://icmr.icfai.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB038.htm

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The Ford Production System

Innovation Type: Process Innovation

Background: Ever since it began operations in 1903, Ford Motor Company (Ford) has been recognised as a manufacturing process innovator in the automobile industry.

Goals: To induce more flexibility and enhance the efficiency of its automobile production systems.

Actions (Actual Ideas): A reengineering effort known as Ford Production System (FPS) was

developed and implemented in its plants across the world. Techniques used in lean manufacturing were implemented at all of its

manufacturing operations. The human aspects were emphasised in the effort of reducing wastes apart

from using advanced technologies.

Benefits: FPS enabled Ford to develop and apply the best practices in automobile

manufacturing. The company realised improved productivity levels and financial performance. Three plants of Ford found a place in the list of the 17 manufacturing plants

across the world who received the Shingo Price for Excellence in Manufacturing, termed by Business Week as the Nobel Prize of Manufacturing.


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PayPal.com's Business Model

PayPal.com's Business Model

Innovation Type: Technology and Service Innovation

Background: When the PayPal service was launched in 1999 to enable people to settle small debts via the Internet, several analysts expressed doubts over its future.

Goals: To achieve the market leader in e-payment services, and bring a complete transformation in the way people made online payments.

Actions (Actual Ideas): A very competitive business model was adopted. Appropriate security systems were in place to check frauds. New services were consistently offered. The network was expanded continuously.

Teams:

Results (Benefits) PayPal.com has won the trust of millions of customers, and it grew from

10,000 customers in 1999 to 45 million customers in 2004. PayPal became the most trusted payment system over the Internet, revealed by

a survey conducted by Gartner in 2002.


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Volvo’s Product Development Practices - Focus on Safety

Volvo’s Product Development Practices - Focus on Safety

Innovation Type: Product Innovation

Background: Maryann Keller, an automobile industry analyst noted, “Since the introduction of airbags in the late 1980s, the industry has understood that safety sells. A customer who buys a Volvo may find that incremental value is worth the cost simply because (he or she) already places a higher than normal value on safety.”

Goals: To manufacture the safest cars in the world.

Actions (Actual Ideas): Conducting R & D for safety technologies has been constantly emphasised at

the company. The Volvo Safety Centre, one of the most advanced safety engineering

facilities in the world, was inaugurated in 2000. All Volvo vehicles and their components were subjected to safety tests

including computer simulation, component testing and crash testing.

Teams: The Volvo Safety Centre

Results (Benefits): Several path breaking safety technologies were introduced by Volvo, which

were way ahead of the times. The state-of-the-art safety technologies reaffirmed Volvo’s top position in the

field of automobile safety and contributed towards better accident prevention in Volvo cars.

The company enhanced its brand image to such an extent that the name Volvo became a synonym for safety.


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Xerox PARC: Innovation without Profit?

Xerox PARC: Innovation without Profit?


Background: In the late 1990s and the early 2000s, Xerox experienced a meltdown due to several corporate crises.

Goals: To streamline its operations and restore a semblance of stability. One of the areas for cost savings identified by the company was the $70 million a year that it spent on the maintenance of the Palo Alto Research Centre (PARC) which was set up in 1970 as the research arm of the company.

Actions (Actual Ideas): In late 2001 it was announced that PARC would be incorporated as a wholly

owned subsidiary of Xerox.

Teams:

Results (Benefits): The cost of maintaining PARC was saved. The parent company would have access to all the technologies developed at

the centre. However, PARC would also be able to license its technologies to other companies.


Lessons Learned from PARC’s Failure for Profit:The Palo Alto Research Centre (PARC) was set up in 1970 as the research arm of Xerox Corp, to invent the technology of the future. In a little over 30 years since it was set up, PARC invented a number of products which revolutionised the computer industry. However, despite its scientific excellence, Xerox failed to capitalise on the commercial potential of most of these innovations. Analysts believed the main reasons are:

Poor goal definition: the casual and flexible culture that prevailed at PARC, allowed people to pursue projects of their interest with no concern for commercial value.

Poor alignment of actions to goals: there was a basic mismatch between the objectives and working methods of PARC scientists and the people at the corporate office.

Poor management of actions: the distance of PARC from the corporate headquarters cut off from the competition of the corporate world.

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Merrill Lynch’s IT Initiatives

Merrill Lynch’s IT Initiatives

Innovation Type: Technology Innovation

Background: Known for its conservative approach towards client servicing and having its focus on offering personalised services, the US-based Merrill Lynch & Company (ML), a leading global financial services firm, had always been in the forefront in the adoption of IT for serving clients better.

Goals: To offer high quality content and analytical tools to enable ML’s financial advisors create, use and track financial plans for their clients.

Actions (Actual Ideas): The Trusted Global Advisor (TGA) platform was launched in the late 1990s. After the TGA became obsolete with new customer-serving technologies

introduced in the early 2000’s, a new information technology (IT) platform called Wealth Management Workstation (WMW) was developed and launched in collaboration with Thomson Financial in 2002.

Teams:

Results (Benefits) The way in which client services were delivered in the financial services

industry was significantly changed after TGA was launched.


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Knowledge Management Initiatives at British Petroleum

Knowledge Management Initiatives at British Petroleum


Background: The UK- based oil and gas exploration major British Petroleum Plc (BP) became one of the first few companies to treat KM as a separate discipline when it established the Knowledge Management Team (KMT).

Goals: To use the application of KM tools for reducing the emission of harmful gases like carbon dioxide and methane.

Actions (Actual Ideas): The Virtual Teamwork Project (VTP), its first major knowledge management

(KM) initiative was launched in 1994. Various KM tools such as Peer Assist, After Action Review, BP Connect,

Retrospect and Human portal, were launched soon after the success of VTP. A Knowledge Management Team (KMT) was established in 1997. The Emission Trading System (ETS) was implemented in all units of the

company.

Teams:

Results (Benefits): Excellent financial results for its business operations were reported after the

implementation of the KM initiatives. By March 2002, due to ETS, BP could reduce the quantum of emissions from

all its business units by 10%. Costs were reduced and the productivity and efficiency were enhanced of its

business operations due to the successful use of KM tools.


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Charles Schwab – Expanding Online Trading Applications

Charles Schwab – Expanding Online Trading Applications


Background: The US stock market crash in October 1987 had a severe impact on the brokerage industry. Trading volumes fell, commissions came down. Since Charles Schwab & Co. Inc. (Schwab) depended heavily on discount brokerage commissions, it was forced to explore the possibilities of expanding the range of services it offered. The company soon realised the business opportunities offered by the World Wide Web.

Goals: To provided high volume trading and customised, timely financial services for NASDAQ securities and brokerage-dealers and institutional customers through over 310 branches

Actions (Actual Ideas): The company’s website was launched in 1995, and online trading commenced

in 1996, which allowed customers to get real time stock quotations, enter trade orders, create a personalized asset allocation model, and access research information.

New features were constantly added to enhance the performance of its website.

The existing infrastructure was replaced by the late 1990s by a new enterprise infrastructure, which could easily accommodate higher traffic, provide greater flexibility and economy and render superior customer service.

Teams:

Results (Benefits): Schwab became the market leader in the global online broking and financial

services industry had a 30% market share of the industry in 2001. It also accounted for one-third of overall global Internet trading businesses. By integrating the online and offline worlds, Schwab has become the

benchmark for others going online Customers significantly benefited from the wide variety of investing services

and pricing options provided by the Personal Choice program.


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Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank

Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank


Background: In 1996, the World Bank realised that the distance from its headquarters to operational regions had become a major obstacle in objective achievement. In October 1996, when the World Bank, announced that the organisation would transform itself into a knowledge bank, there were mixed reactions. Some were excited about knowledge management and its potential in helping the World Bank achieve its objectives. Others considered it a waste of time and resources and felt the Bank should stick to its original mission of eliminating poverty.

Goals: To transform itself into a knowledge bank.

Actions (Actual Ideas): A global knowledge community was created using web-based tools, by

harnessing the vast amount of knowledge present across the organisation and making it readily available to all employees and clients.

Teams:

Results (Benefits): Knowledge moved seamlessly across the world to make the work involved in

poverty elimination and economic development (the Bank's primary objectives) faster and more effective.

In early 2000, the World Bank was recognized as one of the five top knowledge management organizations in the US by the American Productivity and Quality Centre (APQC).

In June 2000, the Bank featured in the list of the 10 top Most Admired Knowledge Enterprises (MAKE) in a survey conducted by the KNOW Network.


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Mercedes Benz’s e-Biz Solution: The Factory Delivery Reservation System

Mercedes Benz’s e-Biz Solution: The Factory Delivery Reservation System


Background: By the end of 1997, Mercedes Benz United States International (MBUSI) started producing at full capacity. By 2000, the factory was rolling out around 380 vehicles per day. Mass customisation required that each vehicle be treated as a separate project, with its own Bill of Material.

Goals: To established itself as a company that delivered superior customer services, besides a builder of the high-quality M-Class sports utility vehicle (SUV)

Actions (Actual Ideas): The Factory Delivery Reservation System (FDRS), an enterprise wide

Information Technology (IT) system, was designed and implemented.

Teams: IBM Global Services consultants

Results (Benefits): MBUSI was able to create and validate 1800 orders per hour. Material requirements and Bills of Material for 35,000 vehicles were

generated automatically by FDRS per hour. MBUSI not only managed to improve its customer relations by providing the

best service, but also demonstrated its commitment to customers by making them an integral part of the process, with its innovative use of the FDRS.


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Executing E-Business Strategies - The GE Way

Executing E-Business Strategies - The GE Way


Background: Once upon a time, GE had “almost missed the e-business boat”.

Goals: To transform from a Brick & Mortar company into a Click & Mortar company.

Actions (Actual Ideas): The Internet was adopted as an enabler of all business functions in the value

chain. The Internet was used to re-engineer its business processes by removing

obsolete and redundant activities. A transactional website was launched in 1997 by one of the company’s

business units, GE Plastics (GEP), to eliminate the waste of time, labour and money caused by the visits and phone calls between the concerned parties.

An artificial intelligence system to help field engineers attend to customers’ requests for site visits was developed in 1998 by the Industrial Systems unit of GE.

Teams:

Results (Benefits): Costs were dramatically cut, the cycle time was reduced, and the quality of its

services was improved through the BPR activities. In June 2000, Internet Week (a leading IT publication in the US) recognised

GE as the E-Business of The Year.


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Operations at Whirlpool

Operations at Whirlpool


Background: At Whirlpool Corporation (Whirlpool), logistics did not start with the distribution of a finished product but was a true supply chain strategy, which encompassed materials flow into and through the manufacturing process.

Goals: To get the right product to the customer when they expect it.

Actions (Actual Ideas): Several cross-functional teams for key product areas were set up. Several agreements with its suppliers were reached based on their reliability

and their ability to assist in product design. Electronic Data Interchange (EDI) was adopted by 1999 to communicate with

its suppliers as a part of its supply chain initiative, in order to cut down on expenses.

Almost all the Whirlpool stores around the world were linked with e-business software, which linked each of its factories and sales operations with suppliers and key-retail partners.

An online sales program called e-Partner was launched in September 2002.

Teams:

Results (Benefits): By the early 2000s, Whirlpool had product availability in the range of 90 to 95

per cent. Inventories were reduced by 15 to 20 per cent and lead times became as low as

five days.


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Nokia - Fostering Innovation

Nokia - Fostering Innovation

Innovation Type: Process and Culture Innovation

Background: According to analysts, Nokia served as the industry model for aggressively and effectively segmenting the mobile phone market and developing a number of products for segments.

Goals: To create an inclusive environment, i.e. a culture which seeks to uphold and benefit from diversity.

Actions (Actual Ideas): A lot of importance to innovation and creativity was given. A conscious effort to create and maintain a culture, which focused on diversity

and the benefits that accrued from it, was made. The R&D system was an open one where any idea, no matter how absurd it

sounded initially, was given due consideration.

Teams:

Results (Benefits): A number of such absurd sounding ideas later emerged as star products or

features in the Nokia line-up. By 2002, Nokia had emerged as the strongest brand in the mobile handset

industry. By 2002, Nokia had a market share of about 36%, which was much larger than

that of its competitors.


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Ericsson in the New Millennium

Ericsson in the New Millennium


Background: Ericsson, the Swedish telecom giant, enjoyed immense success until the 1990s. However, it failed to adapt its mobile handsets to consumer tastes, and this led to a fall in sales of its handsets. Its competitors meanwhile took over Ericsson’s space in the market. As sales fell, Ericsson’s other businesses were also affected.

Goals: To restrict the downslide in its sales.

Actions (Actual Ideas): Ericsson marked out its core competencies and then focused on them. A joint venture to form Sony Ericsson- a company that would combine

Ericsson’s technology with Sony’s understanding of the consumer market was started.

Free from the handset business, Ericsson concentrated on its core businesses- the 3G technology and wireless telephone networking

Teams:

Results (Benefits): By 2003, Sony Ericsson broke even and was firmly on the path to profit-

making. Ericsson managed to establish its supremacy in the 3G technology although

the market was still relatively small. Ericsson has reinvented itself as a lean, modern, advanced, cost-conscious and

competitive organisation.


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Sears’ Logistics Management Practices

Sears’ Logistics Management Practices


Background: The US retailing giant - Sears, Roebuck & Company (Sears) was in deep trouble during the early 1990s. In the course of fiscal 1992, Sears hired an outsider - Arthur Martinez (Martinez) to head its merchandise division.

Goals: To make Sears’ logistics management system more efficient.

Actions (Actual Ideas): Martinez focused on streamlining the logistics management practices by

consolidating distribution centres, increasing warehouse automation, and reducing transportation costs.

Wireless Mobile Systems were installed in the Retail Replenishment Centres (RRCs) in 2001.

Teams: Arthur Martinez, head of the merchandise division and William Gus Pagonis, Executive Vice-President.

Results (Benefits): The merchandise division was able to make a profit in the next year of

Martinez’s drastic changes in the division. Sears became one of the few retailing companies which applied military

logistics strategies in practice. Sears had always been among the first movers to adopt modern IT tools and

Internet-enabled technologies in logistics management.


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Gateway - Implementing Innovative Strategies in the IT Industry

Gateway - Implementing Innovative Strategies in the IT Industry

Innovation Type: Service Innovation

Background: During the initial years of the new millennium, due to the slowdown in the IT industry, the leading computer retailer US based Gateway Inc (Gateway)’s PC business performed badly. The company also faced stiff competition in the various services it had newly introduced.

Goals: To revival the business after the fall partly caused by the stagnation in the IT industry

Actions (Actual Ideas): A new strategy was launched in October 2002, which involved a change in its

logo and retailing of many new consumer electronic products through its own stores.

Teams:

Results (Benefits): In spite of the stagnation in the IT industry, Gateway reported reduced losses

of $297 million for the fiscal 2002 due to the measures it had taken.


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Intel's Centrino

Intel's Centrino


Background: In developing the Pentium M, at its labs in Israel, Intel had solved one of the historical problems with Pentium notebooks, power consumption. Despite new chip technologies and industry wide efforts in the 1990s to increase overall notebook energy efficiency, growing screen sizes and faster chips wiped out many of the gains.

Goals: To develop a new range of Central Process Unit (CPU) ideally suited for a range of thinner, lighter notebooks that deliver the levels of performance needed in mobile computing.

Actions (Actual Ideas): Rather than retrofit the Pentium, Intel’s Israeli team decided to start from

scratch. The latest generation of enhanced Intel SpeedStep technology was adopted in

Centrino. The Micro Ops Fusion program combined routine instructions and tasks. The Advanced Branch Prediction program let the processor better schedule

tasks. Different parts of the chip were designed to shut down when not in use.

Teams: Intel’s Israeli R&D team.

Results (Benefits): Centrino enabled extended battery life, and sleek, easy-to-carry notebook

computers. Centrino delivered a significantly enhanced performance in wireless

connectivity.

URL: http://icmr.icfai.org/casestudies/catalogue/Business%20Strategy3/BSTA082.htm

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Microsoft in 2004: Shaping a New Image

Microsoft in 2004: Shaping a New Image


Background: By the early 2000s, Microsoft had become large and unwieldy. The company’s days of rapid growth appeared to be over. The effort of exploring other product segments had not yet yielded profits. Microsoft realised that in the aftermath of the antitrust case, it needed to project a new image befitting a large company as opposed to a start up.

Goals: To adjust the company’s culture to its status of industry leader.

Actions (Actual Ideas): The lower level employees have been empowered while the attitude of

winning at any cost was abandoned. Employees were asked to be open and respectful, less secretive, less

mysterious and more communicative, towards people and organisations outside.

Teams: Microsoft’s new CEO Steve Ballmer appointed in early 2000.

Results (Benefits): The company’s ability to innovate and compete effectively in the emerging

business environment was improved.


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Wal-Mart in 2004: Creating a New Image

Wal-Mart in 2004: Creating a New Image


Background: During the time when Wal-Mart had been relatively small, the public relations department's main function was to keep Wal-Mart out of the news. However, the more Wal-Mart grew and the more financial success it had, the more the media paid attention to it. The negative publicity resulting from a series of incidents in 1992 made Wal-Mart realise that the company had become visible, exposed and vulnerable to media attention.

Goals: To shape its public relations strategy to create a new image.

Actions (Actual Ideas): A proactive approach was adopted to manage relations with external

stakeholders and the media. Wal-Mart has set up a government relations department in Washington. Employees are being encouraged to participate actively in local community

affairs.

Teams: Wal-Mart’s Public Relations department

Results (Benefits): Wal-Mart’s Public Relations department has become more proactive, media

friendly, and has attempted to portray the company as a leading retailer, good employer, and responsible corporate citizen.


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Business Model Innovation at Dell

Business Model Innovation at Dell


Background: Many players in the PC industry have attempted to replicate Dell’s business model but failed. It is Dell’s disciplined execution that has driven Dell’s success.

Goals: To become the leading players in the PC industry.

Actions (Actual Ideas): Dell has created a direct selling model and build-to-order format. The company had concentrated on activities where it could add most value and

on market segments where profits were highest. Dell had taken care to ensure that customer service was not diluted in the

process of cutting costs. In addition to the www.dell.com site which offered various services to

customers, Dell offered customer-specific sites called Premier Pages, which provided facilities such as paperless purchase orders, real-time order tracking and purchase history.

Teams:

Results (Benefits): The company maintained momentum in a rapidly commoditising industry,

where most other players were struggling. During the period 1997-2002, Dell's global market share of PCs went up from

5% to 15%. In many product categories, Dell set the standard for customer service. Dell has also demonstrated that it is not R&D spending alone which

determines a company's success.


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FedEx: Competitive Advantage through Information Technology

FedEx: Competitive Advantage through Information Technology

Innovation Type: Strategy and Technology Innovation

Background: Began as an express air delivery company in the early 1970s, FedEx has successfully transformed itself into an integrated transportation and logistics service provider. A major part of FedEx’s success is directly attributed to its committed use of information technology (IT).

Goals: To transform into an integrated transportation and logistics service provider.

Actions (Actual Ideas): FedEx was the first who give away more than 100,000 PCs loaded with FedEx

software, which was designed to link and log customers into FedEx’s ordering and tracking systems.

FedEx was also the first to issue hand held scanners to its drivers that alerted customers when packages were picked up or delivered.

FedEx also offered a number of IT related solutions that supported its clients in areas like warehousing, inventory management, billing and invoicing, and distribution.

Teams:

Results (Benefits): Clients were provided with seamless logistic and supply chain solutions. FedEx has successfully transformed itself into an integrated transportation and

logistics service provider.


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IKEA: Managing Global Expansion

IKEA: Managing Global Expansion


Background: Most of the time, beautifully designed home furnishings are created for a small part of the population - the few who can afford them. From the beginning, IKEA has taken a different path. They have decided to side with the many.

Goals: To offer a wide range of home furnishings with good design and function at prices so low that as many people as possible will be able to afford them, and still have money left!

Actions (Actual Ideas): High-quality and Scandinavian design. No delays in delivery. Global sourcing of components. Knock-down furniture kits that customers transported and assembled

themselves.

Teams:

Results (Benefits): IKEA’s cost leadership strategy had enabled it to pass on to customers lower

prices, anywhere from 25% to 50% below those of its competitors. IKEA’s business model had gradually revolutionised the conservative national

furniture markets first in Europe and then in other parts of the world.


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Procter & Gamble in 2004: Managing Product Innovation

Procter & Gamble in 2004: Managing Product Innovation

Innovation Type: Strategy and Culture Innovation

Background: By the summer of 2000, things were not looking good for the US based Procter & Gamble (P&G), one of the most well known consumer goods marketing companies in the world. Costs had gone up, volumes stagnated and profit margins had shrunk on P&G’s biggest brands like Pampers, Tide, and Crest.

Goals: To turnover its declined business.

Actions (Actual Ideas): The company had focused on building the core brands. Many products’ prices were cut. Lafley had attempted to introduce more creativity into P&G’s innovation

process.

Teams: CEO of P&G Alan Lafley appointed in the summer of 2000

Results (Benefits): Many new products were launched. Over the past three years, core volume (units sold in P&G’s existing

businesses) rose on an average by 7% annually. Since 2002, P&G has improved its new-product hit rate (the percentage of new

entries that deliver a return above the cost of capital) from 70% to 90%. In the first quarter of 2004, 19 of P&G’s 20 largest brands improved their

market shares.


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Toyota in 2004: Managing Innovation in the new millennium

Toyota in 2004: Managing Innovation in the new millennium


Background: Despite its pioneering efforts in Just-in-Time, one of the challenges which Toyota faced was in moving towards a Build-to-Order system, especially outside Japan. Build-to-Order demanded flexible manufacturing systems that allowed switching from one model to another with ease.

Goals: To build greater flexibility and facilitate mass customisation.

Actions (Actual Ideas): Toyota had been revamping its ordering, manufacturing and distribution to

make it easier for dealers and customers to make changes right before production.

Toyota spent four years developing software that connected dealers to factories and factories to suppliers.

Toyota also streamlined the logistics process, according to which finished vehicles were sent to sorting docks where they could be grouped by region.

Teams:

Results (Benefits): The new ordering, manufacturing and distribution system not only improved

customer satisfaction but also cut dealer inventory costs and the need for Toyota to offer rebates for slow-selling vehicles.

The new logistics process cut delivery by two days.


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Restructuring Philips

Restructuring Philips

Innovation Type: Strategy and Culture Innovation

Background: Philips was on the verge of bankruptcy in May 1990 when the company posted losses of $2.6 billion.

Goals: To turn the company around, foster greater cooperation among its various divisions, get rid of the bureaucratic work culture prevailing in the company and promote teamwork.

Actions (Actual Ideas): Philips initiated job cuts, sold unprofitable businesses and closed down many

manufacturing facilities worldwide throughout the 1990s. In late 1999, Philips embarked on a worldwide marketing campaign for the

first time in its history. In 2001, the Towards One Philips (TOP) restructuring program was launched.

Teams:

Results (Benefits): The restructuring efforts in the 1990s helped improve the financial health of

the company but were not able to address concerns like the bureaucratic work culture and the company’s poor marketing of its products.

The company made a clean break from its past image as a technology-oriented company to one that was market-oriented through the marketing campaign.

The TOP program has achieved cut cost, develop innovative products and technologies, and improve relationship with customers.

URL: http://icmr.icfai.org/casestudies/catalogue/Business%20Strategy/BSTR170.htm

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The McDonald’s Turnaround Story

The McDonald’s Turnaround Story


Background: By the late 1990s, after years of declining earnings and poor customer ratings, McDonald’s Corp. (McDonalds), the largest fast food chain in the world, seemed to have lost its claim to providing the Great American Meal.

Goals: To turnaround the company from declining.

Actions (Actual Ideas): McDonald’s adopted the “Plan to Win” turnaround program in early 2003. The company introduced substantial system-wide changes that overhauled the

company’s products, operations and marketing. The company moved quickly to tailor its operations to the changing trends in

the fast food industry

Teams: Jim Cantalupo who was made CEO in early 2003, and Charlie Bell the president and COO were the leaders.

Results (Benefits): The new plan eliminated the negative elements in the system, while retaining

and building on the positive aspects. Critics who had been sceptical about the company’s ability to revive were

confounded. In the quarter ended July 2004, the company announced a 25 percent increase

in profits over the corresponding quarter of the previous year, and sales reached a 17-year high.


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IBM’s Turnaround and its New Business Model

IBM’s Turnaround and its New Business Model


Background: In 1993, International Business Machines (IBM), a global leader in the IT industry was in deep financial trouble. The company had reported a net loss of $8.1 billion, the largest ever in the history of IT industry.

Goals: To revive the company’s business.

Actions (Actual Ideas): IBM was transformed from a company that primarily manufactured

mainframes to a company that offered complete IT solutions. The company changed its focus from being product centric to being customer-

centric. IBM launched new services-heavy business model.

Teams: Louis V. Gerstner was the leader.

Results (Benefits): IBM has made the most remarkable turnaround of any company ever --- in the

fiscal 2003, IBM reported a net income of $7.58 billion on revenues of $89.13 billion.

During the period 1994-2003, the share price of IBM shot up by nearly 700%. IBM not only turned around but, was able to significantly boost its financial

performance.


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Reengineering & Restructuring at Canon

Reengineering & Restructuring at Canon


Background: In the mid-1990s, Japan’s leading photocopier and camera manufacturer, Canon Inc (Canon), embarked upon turning itself into a truly global corporation.

Goals: To turn itself into a truly global corporation.

Actions (Actual Ideas): The company embarked upon a massive reengineering program, Excellent

Global Corporation Phase I and II in 1996. Many changes were introduced in the company’s manufacturing and

management processes.

Teams: The management team lead by Fujio Mitarai.

Results (Benefits): Canon was able to revive itself without adopting painful strategies. In 2002, Canon’s total sales were ¥2,940,128 million, an increase of ¥381,901

million from 1996. Its net income increased from ¥94,177 million to ¥190,737 million during the same period.


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PepsiCo’s Distribution and Logistics Operations

PepsiCo’s Distribution and Logistics Operations


Background: Headquartered in New York, the US-based PepsiCo is one of the world’s leading beverage and snacks food companies. Analysts felt that one of the main reasons for the company’s success was its efficient distribution and logistics management operations.

Goals: To set up highly advanced distribution system.

Actions (Actual Ideas): PepsiCo upgraded its technical capabilities consistently in order to strengthen

its logistics management activities. PepsiCo developed various standard distribution methods, such as the Direct

Store Delivery (DSD) system, the broker warehouse system, the vending and food service system and the pre-sell method.

Depending on the product involved, PepsiCo chose between the distribution methods.

PepsiCo also adapted these systems to the local conditions of the various countries in which it operated.

Teams:

Results (Benefits): This efficient distribution and logistics management system has successfully

reduced costs and created value for customers PepsiCo has gained massive growth and acquired the leadership status in

almost all its business segments.


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Coca-Cola’s Re-Entry and Growth Strategies in China

Coca-Cola’s Re-Entry and Growth Strategies in China

Innovation Type: Strategy and Process Innovation

Background: The Coca-Cola Company (Coke) re-entered China in 1979. Today it is recognised as one of China’s most trusted brands according to Interbrand. Coke’s top managers and industry observers too believe that it is the company's winning approach of “Think Local, Act Local” that has enabled it to capture markets outside of the United States.

Goals: To localise the entire Coca-Cola system to the Chinese market.

Actions (Actual Ideas): Coke encourages local managers to develop strategies that are best suited for

their areas, and regional offices have the freedom to approve local initiatives. Coke worked closely with Chinese state-owned enterprise, formed joint

ventures with state-owned enterprises to set up more bottling plants. Coke developed its own infrastructure for distribution but gradually came to

mainly rely upon state-owned distribution companies and local Chinese distribution companies.

Teams:

Results (Benefits): Since 1990 it has been making profits in China and according to AC Nielsen it

had a market share of over 50 percent share of the Chinese beverages market in 2002.


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The eCitizen Portal - Integrating Government Services Online in Singapore

The eCitizen Portal - Integrating Government Services Online in Singapore

Innovation Type: Service Innovation

Background: In October 2002, Singapore’s eCitizen portal was declared the winner of the prestigious Stockholm Challenge Award in the e-government category. The competing e-government projects were evaluated on the basis of four criteria, namely, Innovation, User needs, Transferability and Accessibility.

Goals: To improve the government’s service delivery and interaction with citizens.

Actions (Actual Ideas): The concept of Many Agencies One Government was embodied in the

eCitizen portal. The eCitizen portal integrated public services across government agencies, so

that public services were delivered with one-stop convenience.

Teams:

Results (Benefits): The portal eliminated the need to log onto several websites to access the

services of different government departments. It revolutionised the manner in which government-to-citizen (G2C) and

government-to-business (G2B) interaction took place.


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IKEA’s Innovative Human Resource Management Practices and Work Culture

IKEA’s Innovative Human Resource Management Practices and Work Culture


Background: The retail sector, especially in the United States, was not known for being employee-friendly. Many large retailers paid low salaries and offered negligible benefits while expecting employees to work long hours. Consequently, it suffered from high human resource (HR) costs, as companies had to recruit and train replacements at frequent intervals. In this context, IKEA stood out for its employee-friendly policies and generous benefits, which made it the preferred employer in the retail sector.

Goals: To promote life balance and diversity in the company.

Actions (Actual Ideas): Several human resource management practices were adopted, including

flexible work design, comprehensive benefits, quality of work life, and employee training and development.

The company also created unique work culture that supported co-workers (as employees were called at IKEA) and encouraged creativity and diversity.

Teams:

Results (Benefits): IKEA’s committed workforce has become one of the sources of the company’s

innovative concepts. IKEA North America (IKEA) was in the annual list of the Fortune “100 Best

Companies to Work For”.


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AIG’s E-Business Risk Insurance Solutions

AIG’s E-Business Risk Insurance Solutions


Background: Since the late 1990s, the Internet has been widely used as a channel for communication and e-commerce by individuals and businesses. The use of Internet involves several cyber risks such as hacking, systems getting infected by viruses and worms, identity and credit card frauds and breach of network security. However, these cyber risks were not covered by regular insurance policies. The US-based American International Group launched AIG eBusiness Risk Solutions (AIG eBRS) in 2000 exclusively to address these cyber risks.

Goals: To address the risks caused in e-Business.

Actions (Actual Ideas): AIG has broadened the portfolio of its insurance product offerings by

introducing a series of comprehensive liability coverage for companies conducting business on the Internet.

AIG covered claims arising from the errors or deficiency in service provided by the insured company due to security problems and fraud

Insurance cover was also provided against unknown viruses, unauthorised use or access of systems, allegations of infringement of copy rights and trademarks, libel or slander resulting from media services such as website design or hosting.

Teams:

Results (Benefits): AIG has emerged as the largest provider of e-business risk insurance

worldwide with over 70 per cent market share.

URL: http://icmr.icfai.org/casestudies/catalogue/Insurance/INS053.htm

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Turnaround of J C Penney


Background: J C Penney Company, Inc. (JCP), a leading retailer in the US with a century of history, found itself unable to keep pace with the changes taking place in the retail environment in the late 1990s. The growth strategy, which had made the company successful, became a barrier for its effective functioning in the late 1990s.

Goals: To turnaround the company.

Actions (Actual Ideas): The company centralised its buying process consequently moved from a

decentralised merchandising system to a centralised merchandising system. It sold off its drugstore Eckerd in order to focus on its core business. It revamped its human resource practices by aligning the HR practices with the

business goals. The company repositioned itself as a trendy, yet value offering retailer.

Teams:

Results (Benefits): These restructuring initiatives resulted in increased revenues for the company

and improved stock values from $10 in 2000 to almost $50 in 2005.

URL: http://icmr.icfai.org/casestudies/catalogue/Business%20Strategy/BSTR160.htm

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Innovation Case Studies - NUI Galway€¦ · Web viewCoca-Cola’s Re-Entry and Growth Strategies in China. Innovation Type: Strategy and Process Innovation. Background: The Coca-Cola