Wednesday, May 6, 2020
Case Study on Innovation
Question: Case Study on Innovation. Answer: Introduction Innovation is an action taken to introduce something which is a new or doing something in a new and different way. The generation of new idea and implementing them in business is known as innovation in business. A company is generally getting success trough innovation. With the increasing global competition, implementing innovation in business processes has become very important (Bogers West, 2012). Innovation usually comes by experimenting, making trial-and-error, and sometimes out of the blue an idea strikes which lead to innovation. The accessibility of information and knowledge with present revolutionary technology has opened the gate for experimenting with innovative ideas more efficiently than before. The assembling of factors and elements makes a contribution in innovation in the business operation. This includes the environment research, company strategy, market need, and company resources. Here an innovative product Safe-O-Lock will be analysed with the help of various analysis and in the end the conclusion of all the analysis and there outcome regarding the success of the innovative product in the global market against its competitors (Edelson, 2014). Case Study of an Innovative Product Proposed Idea of Innovation Nowadays IT sector and telecommunication are coming up with new and innovative ideas for the current market requirements. Everyone wanted technology to become an enhanced part of their daily life style. By keeping this demand of customers a well know luggage manufacturing company come with an innovative product Safe-O-Lock. Many a time people lost their luggage while travelling and then face many problems due to the loss. Safe-O-Lock is the solution for all problems. It will include a GPS chip in the locking system in a suitcase. In case if someone loses his or her luggage, and an unknown person tries to forcefully open the luggage or input the wrong lock code then automatically the GPS chip installed in the Safe-O-Lock suitcase will get activated and send a message of the current location of the luggage on the mobile numbers saved in the memory of the chip (Fuglsang, 2008). This will increase the safety of the material packed in the luggage. And the owner will get the location of his or her Safe-O-Lock and take the necessary step to claim it back. The Benefits of the Innovation There are many benefits of innovation, and they are as follows: - Improved productivity and reduced costs- innovation process lead to the reduction of unit costs. This can be either achieved by improving the production capacity of the business or flexibility of the business to exploit the economies of scale. Better Quality- to meet the customer needs innovation provides better quality products and services. If marketed efficiently then will result in higher profit and sales (Gronum, Steen, Verreynne, 2015). Building a product range- innovation can prove to highly beneficial for the businesses producing single or limited products. A variety and innovative product range grants, an opportunity for increased profits and sales. Also, help in reducing the risk for shareholders. To handle legal and environmental issues- innovativeness may provide the business with the methods to reduce carbon emissions or reducing waste. Innovation may also be forced on business due to the changing laws. More added value- innovation in business can prove to be USP for a product for which customer are ready for paying a higher price (Herrera, 2016). The Problems Solved by the innovation Being innovative is very necessary to be successful in a business. The problems that innovation can solve are: - Future problem solution- through innovation the problems that may arise in future can be solved. For example, future competitive threats, change in customer preference, changing laws, and technological advances that are not acting as a problem in the present situation but in future they are ascertained to come up as an issue which can be solved with the help of innovation. Lost Luggage- here this innovative product will help in solving a big problem for anyone who has lost his or her luggage. As somebody will try to open Safe-O-Lock, it will automatically send the location, and this will help in finding the luggage (Kahn, 2014). Strategic Response toward the Innovative product Strategies are defined as the vision of the company to introduce, promote, and earn profit from the innovation. Here a new innovative luggage range Safe-O-Lock is being developed as the most innovative product of the company. This innovative product is a combination of Information Technology and Telecommunication. The GPS system indicates the Information technology and using a network to send messages to the mobile phone is a part of telecommunication (Lindgren, 2012). The strategy need to plan for the success of the product includes: - Informing the customers about the innovative product The promotion criteria to be selected that helps in elaborating the unique, innovative qualities of Safe-O-Lock. Determining the cost of production and best way to reduce the cost of production Targeting customer segment for promoting the product. Plan and Project Option Analysis Technological Feasibility of the product To include GPS chip in luggage required a lot of technical support. A whole technical staff are need to be allocated to the technological department to come up with successful GPS chip that can communicate its location using the available network. All the required equipment like computers, related software, hardware and other equipment for coming up with the GPS chip will be required. Along with it the technical staffs which are going to develop the chip, then install it properly in luggage in such a way that it does not get damaged with any kind of impact on it (Martin-Rios Parga-Dans, 2016). Financial Feasibility of the Innovative Product The finance required by the company to develop, install and promote the GPS chip has to be determined then only the company can access the amount of profit they are going to earn by launching an innovative product in the market. Total expenses need to be calculated to get the final value of the product like the labour cost, cost of manufacturing unit that will manufacture the new product range, equipment cost, hardware cost, software cost, technical development cost, patent cost, etc. are needed to be initialised to determine the financial feasibility of the product (Oshri, 2012). Market Analysis of the innovative product It is necessary to analyse the market before a product strategy is decided as it will help in knowing the exact market position and competitive factors present in the market. The market analysis used here is the Four Ps: - Product- at present there is no such kind of luggage available in the market which has an in-built GPS chip that can forward its location through telecommunication to the mobile numbers loaded in the memory of the chip. People- the target market of such kind of luggage can be the corporate, tourists, business men, etc. who are regular travellers and carry important luggage with them. Place- the product need to be available in all the company outlets and all the stores where good and high-quality luggage is being sold. This will in covering the maximum market for the product (P. C K. C, 2015). Promotion- the benefits of using Safe-O-Lock need to be included in the promotional strategy for the product. As the cost of this product will be higher than other available product thus, it becomes necessary for the company to inform the customers for what are they paying a high cost. Industrial analysis of the Innovative Product The industrial analysis is conducted to find out the strength of the competitors present in the market against the innovative product. Here Porters Five Analysis will take up to find the products position:- The Threat of the new entrants- the new entrants can enter the market very easily as the entry barriers are very low. The costing of the project is high which may make entrants to think before entering the market. Therefore, the threat of new entrants is medium here (Padgett Moura-Leite, 2012). The threat of substitute product- there are number of substitute product and alternatives is available in market but none of the substitute will have the safety option given by Safe-O-Lock. For that reason customer will prefer purchasing Safe-O-Lock. Hence, the threat of substitute is also medium. Bargaining power of suppliers- there are a huge number of suppliers ready to supply the raw material to the company. Also, company is well established so it has its selected suppliers to deal with. Hence, the bargaining power of the suppliers is low. Bargaining power of customer- as the price of the product is higher than the other substitutes available in the market but the safety option will act as the USP for the sale of the product. Thus, customers who prefer safety of their luggage will definitely go for Safe-O-Lock than going for a substitute. Hence, the power of bargaining of the customer is medium. The intensity of customer rivalry- no one has come up with such idea till now and to develop a technology takes time thus; no competitor will have the strength at present to stand against the innovative product. But in future, the chances of increasing intensity of competitiveness are there. Hence, the intensity of customer rivalry is medium (Polietaiev, 2014). The analysis concludes that though the company has come up with a real innovative idea to provide safety for the traveller in case of their luggage but the competitive intensity in terms of competitors, new entrants, substitutes, and customer is medium and only suppliers bargaining power is low, which gives company a chance to give a second thought on the success of the product. Conclusion Innovation has become an important aspect for any business to succeed in the global market. A company has to come up bright, new and innovative to be a leader in the market. If a competitor comes up with an innovative product then the customer will shift to the other company. Here the product of the company will become stale (Ren, 2005). In this report, an innovative product Safe-O-Lock was developed by an established luggage company to continue its leadership in the market. The various analysis of the product, was conducted in this case study, and that shows that may be the innovative product is quite new for the customer and also very attractive but in no time competitors can copy and come up with the substitutes. This concludes that innovation is a continuous process that need be taken up by the companies in order to be competitive enough (West, 2012). References Bogers, M. West, J. (2012). Managing Distributed Innovation: Strategic Utilization of Open and User Innovation. Edelson, S. (2014). Incubating innovation.Science-Business Exchange,7(46). Fuglsang, L. (2008). Capturing the benefits of open innovation in public innovation: a case study.International Journal Of Services Technology And Management,9(3/4), 234. Gronum, S., Steen, J., Verreynne, M. (2015). Business model design and innovation: Unlocking the performance benefits of innovation. Herrera, M. (2016). Innovation for impact: Business innovation for inclusive growth.Journal Of Business Research,69(5), 1725-1730. Kahn, K. (2014). Solving the problems of new product forecasting.Business Horizons,57(5), 607-615. Lindgren, P. (2012). Business Model Innovation Leadership: How Do SMEs Strategically Lead Business Model Innovation?. Martin-Rios, C. Parga-Dans, E. (2016). Service response to economic decline: Innovation actions for achieving strategic renewal. Oshri, I. (2012). Innovation returns from offshored IT RD: a response article.Strat Outs,5(1), 36-38.