Innovation is a Vital Aspect of Corporate or Organizational Strategy (1)

8/17/2019 Innovation is a Vital Aspect of Corporate or Organizational Strategy (1)

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Innovation is a vital aspect of an organizational strategy. A good master plan of abusiness carries a tight link between innovation and strategy. Apple, Cisco, blockbusterIBM and coca cola gives idea that how their strategies have shaped their pursuit ofinnovation. Innovation is the evident attribute in all successful organizations. ffectivemarketing re!uires that organization is able to adapt to changes and new opportunities.

Innovation allows the organization to transform an idea into reality.

HBR analyst Niraj Dawar put it as:

"#he persistent belief that innovation is primarily about building better products andtechnologies leads managers to an overreliance on upstream activities and tools. Butdownstream reasoning suggests that managers should focus on marketplace activities

and tools. Competitive battles are won by offering innovations that reduce customers$costs and risks over the entire purchase, consumption, and disposal cycle.%

#he need of innovation is well e&plained as'

(#rying to define what will happen three to five years out, in specific, !uantitative terms,is a futile e&ercise. #he world is moving too fast for that. )hat should a company doinstead* +irst of all, define its vision and its destiny in broad but clear terms. econd,ma&imize its own productivity. +inally, be organizationally and culturally fle&ible enoughto meet massive change.%

Jack Welch

Innovation management refers to both product and organizational innovation. Managersuse set of tools to cooperate the understanding of process and goals. -rganization useinnovation to introduce new products ideals and processes to deal with the e&ternal andinternal opportunities. Management can trigger and increase the creative capabilities ofthe work force by using innovation tools. Common tools are brain storming, prototyping,product life cycle management idea management, #/0, 1hase gate model pro2ectmanagement, product line planning and portfolio management.

)e define management innovation as the invention and implementation of managementpractice, process, structure, or techni!ue that is new to the state of the art and intendedto further organizational goals. Adopting an intraorganizational evolutionary perspective,we e&amine the roles of change agents inside and outside the organization in drivingand shaping four processes3motivation, invention, implementation, theorization andlabeling3that collectively define a model of how management innovation comes about.

JULIAN BIRKINSHAWAR! HA"#L

L$n%$n Business Sch$$l"I&HA#L J' "(L

Uni)ersity $* Rea%in+

https://hbr.org/2013/12/when-marketing-is-strategyhttps://hbr.org/2013/12/when-marketing-is-strategy


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Innovation can be managed by pushed or pulled process. Managers find profitableapplication for new or already e&isting technology. 1ulled process is posed on tourcustomers need. A multi4functional team having knowledge of market and technologycan operate to achieve the goals.Management plays a vital role in promoting management technological, institutional and

marketing innovation. #he goal of innovation management at international level is tocreate an environment which enable on organization to get more cooperation pro2ects, 2oint ventures. Innovation managers give management creates clear directionendorsement and support to achieve goals at any level.

Inn$)ati$n *r$, ,ana+er-s p$int $* )iews:#he management of an organization uses innovation to increase productivity. #hepurpose of innovative management is to enable and organization to be'

i5 none adaptable to e&ternal environmentii5 react faster

iii5 effective risk managementiv5 Capture opportunities.

#he management involves the employees and motivates them to be a part oforganization ob2ective and strategy.

Internati$nal ,arketin+ an% inn$)ati$n:International marketing involves operating across number of foreign country markets inwhich not only uncontrollable variable differ but controllable variables like cost and pricestructure, opportunities for advertising and distributive infrastructure also differsignificantly.

Success*ul inn$)ati)e Internati$nal "arketin+:uccessful international companies were able to totally take up the market by adaptingtheir strategies to social re!uirements, language changes or internet marketingcommunities.

Air.n./ a community marketplace for people to list and book accommodations aroundthe world, was founded in 0667 out of an +rancisco, California.

In 8anuary 06/9, Airbnb launched an around the hashtag :-ne;esstranger. #hecompany referred to the campaign as a (global, social e&periment,( in which

Airbnb asked the community to perform random acts of hospitality for strangers, andthen take a video or photo s$cial ,e%ia ca,pai+n with the person and share it usingthe hashtag.

8ust three weeks after the launch of the campaign, over


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demand costs tend to surge due to triggers like championships and tournaments 44these partnerships have certainly helped the brand capture the attention of a globalaudience. >ike?s >ikeI@ co4creation platform serves as another strategy that thecompany is using to appeal to international markets. By putting the power of design intothe hands of the consumer, >ike is able to deliver customized products that align with

different cultural preferences and styles.

&$$perati)e "arketin+:Cooperative Marketing occurs when Companies with relative business pool theirresources to gain benefits. Companies use combined marketing to approach thepotential buyer. It is also cost and time effective for consumer .Conferences,workshops, sporting events, newsletters and festivals can be used to serve the purpose.Interaction among the companies and collaborated creative efforts play a paramountrole in the growth of companies. #he collaboration of >ike and Apple facilities them tocapture digital sports market. #he outcome of fairly managed cooperative market will beas follow

i. )ell established market division meeting the deadlines.ii. Creation of collaborative creative cultureiii. ffective interaction among the companies

Innovation in international market should be adopted with great care. It plays aparamount role in the survival of companies.

Strate+y an% Inn$)ati$n: An effective strategy is an effective plan of action that is design to achieve future goalsand it must anticipate and envision the future of an organization to define best position it

occupies in competitive landscape. #he goal of innovation is to anticipate and createfuture thus innovation is an instrument of strategy. -rganization need to e&plain a framework to link strategy and innovation to translateidea into in action. +ollowing actions are to be taken to link strategy and innovation fromimplementation prospective.

0' Desi+nin+ an% i,ple,entin+ y$ur strate+ic ,$%el: #his model should be able to constitute an implementable and manageable processand describe a link between strategy and innovation to relate these factorsorganization have to focus on outside environment it is competing, because what

happen outside define the conte&t in which your strategy must play out. #o design isstrategy following steps should be consider.

i. @efine a viewpoint about e&ternal environmentii. Identify your current position.iii. @efine a goaliv. @esign the strategic hypothesis.

De*ine )iew p$int:#he uncertainty and unpredictability of the market re!uires to articulate ofcharacteristics of today$s world and anticipates what you believe the world with be


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tomorrow. #he absence of view point weans change will not be anticipated and thefunction of management will be impossible.

#hus an organization needs to clearly define its goals and plans to meet the challengesof international market to prepare as strong view point and leads to strong strategy

organization needs to e&plore type of changes occurring in worked place order toanticipate how the future will unfold.

I%enti*y y$ur current p$siti$n in internati$nal terrain:#errain define a competitive environment the key performance criteria in your market.@oes market depends on price product or service !uality* #he current position of anorganization has specific attribute that including operational performance level,competitive situation, how organization is coping with e&ternal events, pressure topreferred location in international market.

De*ine $al:

Many companies e&press their goals as a function of competitive market they want toget better and stronger and bigger than their competitors. ;ike in / the goal of applewas to regain a better position in market.

De*ine the strate+ic hyp$thesis:It is a motherboard statement that describes the central theme organizing principleto attain goal and how it will sustain improve and grow in the market.

Internati$nal Inn$)ati)e "arketin+ Strate+y:#o strategically position themselves for global competitiveness companies areconsolidating through mergers, ac!uisitions and alliances in the global arena. #here is atrend towards global standardization as companies try to strive for world standard forefficiency and productivity. #he global market is no longer the summation of largenumber of independent country market but more multilateral and interdependenteconomically, culturally and technically. International marketing involves'

i. +ocusing on the needs and wants of customersii. Identify the best method of satisfactioniii. -rienting the company towards the process of providing satisfaction.iv. Meeting organization ob2ectives.

&$,petiti)e ,arketin+: Competitive Advantages is the mechanism by which advantage is created andcommunicated to target audience. #hese are the ob2ects of most cooperate strategy.

1$rter ,$%el 203456 suggests that an organization choice its relative position in marketby choosing its competitive advantage. 1orter states that in order to achieve competitiveadvantage a firm has to choose about the type and scope of its advantage.

#he strategy frame work consists of two types of components.

i5 Internalii5 &ternal


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#7ternal Analysis focuses on economic perspective of industry structure. It e&plainwhere an organization compete. 1orter$s five forces and value chain concepts focuseson e&ternally bared frame work.

Internal analysis describes the method of competition for a company.

Michel 1orter states industry structure and positioning with in the industry are the basisof competitive advantage industry structure determines who will capture the value.

A firm can achieve competitive advantage in understanding of market need. Innovationbrings the competitive advantage to the organization with better ideals for marketingneed. #he typical causes of innovation that shifts the advantages are.

i5 >ew technologiesii5 >ew or shifting buyers neediii5 mergency of new industry segment

iv5 hifting input costv5 changes in government regulation continued at

1$rter )alue chain suggests the activities to gain competitive advantage the valuechain maps a firm into its strategically relevant activities in order to understand the costthe behavior of cost and the e&isting and potential sources of differentiation.

@ifferentiation results from the types of produce services of a firm and the activities thateffect buffer.

1orter generic strategies can be targeted as cost leadership, differentiation or focus. Anorganization can gain competitive advantage because of lower lost or differentiationrelative to his rivals.


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&$st lea%er ship:In the internal market a firm can attract cost4sensitive customer by lowering the price intarget market or having lowest price to value east leadership involves three ways.

i. Digh asset utilizationDigher level of output result in higher market share and put a barrier tocompetitor to match the low cost. @ifferent means are adopted to spread firedcost over large units of production.

ii. ;ow operating cost.In the international market low cost is maintained by offering high volume ofstandardized products, differing basic no fill products and unitingcustomization and personalization of service.

iii. Control over value chainupply marketing inventory and it are encompassed to keep process low.Cost leaderships are viable for large firms where they can manage their same

product in different markets e.g. domino changes it$s toppings according toculture of countries but 96E toppings remains the same. +ord$ invention ofmoving assembly reflects low input and higher gain.

Di**erentiati$n:#his strategy is applicable to the market which is saturated and the organization en2oysuni!ue resources and ideas to satisfy the needs of customers which are difficult to copy.#hese organizations used innovative idea to take over the market e.g. Apple designskill. #o market such products the company must accomplish a premium price for theproduct. =ni!ueness in the physical product and form of image is the result of.

According to 1orter an organization can add value to its product or services through theactivities performed in the value chain to gain competitive advantage. #he advantagecan be ma&imized if the activities are run efficiently. #he value chain framework can bea powerful tool for strategic planning to build organizational model

&lassi*icati$n $* 1$rter8s )alue chain acti)ities:1orter classified the generic value added activities into two classes which are presentedin +igure4/. #hese activities are primary activities which are classified as product andmarket related activities and support activities that are related to infrastructure,technology, procurement, and human resource management.


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1$rter-s 9alue &hain Acti)ities: 1ri,ary acti)ities can be classified into product related and market related activities.

1r$%uct relate% acti)ities:

#he activities that the organization performs to add value to the products and servicesitself. #he activities are classified as inbound logistic, operations and services. "arket relate% acti)ities: #he activities that the organization performs to transfer the finished products or servicesto the customers. #he activities are classified as out bound logistics, marketing andsales. Supp$rt acti)ities: #he activities that the organization performs to assist the primary activities to gain thecompetitive advantage. #he activities are classified as procurement, technology

management, D management and infrastructure management.

#he function of value chain in a business performs in two ways

1ri,ary .usiness function is related to production marketing and sales.

Supp$rti)e .usiness function is related to the processed that add value to the productor service. esearch F development and D plays a vital role here. #he innovation inthe product through research and technology is introduced in the product. Innovation isused to develop and manage new products and new markets.


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Innovation is considered as developing and managing new products and new markets.Innovative marketing plans and technologies allow the organizations to reach customersefficiently in different markets.

#he ob2ective of supply chain is to ma&imize customer value and gain competitive

advantages. #he supply chain is responsible for product development, sourcing,productivity, logistics and coordination of all these activities. 1hysical and informationlink is developed among the organizations. #ransformation, movement and storage ofgoods are important aspects of physical flow. #he partners in the supply chaincoordinate their long term plans, control flow of goods and material via information link.

NIK#:

(.jecti)es:#he cooperate responsibilities of >ike focuses on isk management and deliverinnovative products and e&perience in a sustainable way.

$als:i. Investment in sustainability as key innovation G@ priority as consumer

brands agenda.ii. +ast track innovation and through investment and collaboration.iii. Build and advocacy agenda to push for large scale policies and investment

in sustainable innovation as key enabler of global competitiveness.

Strate+yi. Innovate to deliver enterprise level sustainability solutionii. Integrate sustainability into the heart of >ike. Business model.iii. Mobilize key constituents to partners in caling solution.


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Di**erentiati$n: >ike strategy is based on differentiation. >ike invest on large scale to capture theloyalty of customer. In 0667 >ike invest 0.7H /0.E of revenue to sustain marketposition. . >ike products are high !uality and high in price.

Nike c$,petiti)e sc$pe:It competes with companies like new balance Adidas eebok and 1uma.

"acr$ntech p$st on April 06, 06/9 by ianchewic

Supply &hain:>ike has very strong research and development department. It manufactures itsproducts in low wage factories in for east countries. >ike manufacturing unit consist of66 factories in 0 countries.

>ike has out sourced its manufacturing to third parties where raw material is available insource countries. 1roducts move from 9 distribution across a network of /7966accounts and /6666 retail doors.

Distri.uti$n &hannels:

i. elling products to where sealers in international markets. JE of globalrevenue5

ii. By @#C J@irect to consumer5 which includes factory retail outlets and e4commerce sale.

iii. ales to global division.

Retail partnership:+oot locked, 81 ports and Inters port are retail 1anthers of >ike.

https://macrontech.wordpress.com/2015/04/20/nike-is-gaining-market-share-through-social-media-marketing/https://macrontech.wordpress.com/author/ianchewic/https://macrontech.wordpress.com/2015/04/20/nike-is-gaining-market-share-through-social-media-marketing/https://macrontech.wordpress.com/author/ianchewic/


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&$$perate "arketin+:>ike markets its products under its own name and had 2oint ventures with like >ike Kolf,>ike 1ro. >ike and Air 8ordan Its stake boarding includes Durley international, =mbroand Converse.

"arketin+ Inn$)ati$n:#he symbol of >ike represents brand value product spirit and status. It inspires peoplethat they are capable to do everything no matter what they are.

>ike uses famous sportsmen to endorse its products. #iger )oods always sports >ikeitems, whether he is training or playing a tournament. Cristiano onaldo gets paid loadsof money by >ike 2ust to wear their boots while playing.

Bran% acuisiti$n:Michael 8ordan still owns a large part of >ike$s Air 8ordan shoes.Lobe Bryant$s five4year contract not only got him H6 million, but also his own brand ofshoes, Brant$s 7s.

Di+ital Sp$rts:#he product >ike G running sensor in collaboration with apple, fuel brand whichmeasure the intensity of work out appeal pushed the company into hi tech sports. @igitalis great marketing for driving high customer engagement.

(n line sale:-nline sale made up /9E of total >ike revenue in fiscal year 06/ as compared to /0Ein fiscal year 06/


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In the *uture international market to stay ahead of its competitors >ike must continue tolunch innovative products. Digher prices of products are a vulnerable feature of >ike. Aneconomic downturn in international market may cause reduction in demand and salesunit. >ike has out sourced all its production to third parties which is a great supply chainrisk.


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Innovation is a Vital Aspect of Corporate or Organizational Strategy (1)