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  1. 1. Managing Strategic Innovation BEMM 118 Section A Question 1- Innovation is built upon a solid, basic-research effort in science, technology, engi- neering, and mathematics. It does not happen overnight it is done by lot of dedication and hard work and that is the step for any innovation. To create new products, pro- cess, markets and industry they are all based on creative ideas that comes from a strong, diverse, basic research enterprise; a workforce which is well trained and de- termined to develop new ideas; a competent research enterprise that can develops unique applications from basic discoveries and an environment that helps and facili- tate innovation to come in the market. “Innovation requires an appropriate mix of in- ter-firm rivalry and cooperation or exchange” (By Richardson). Innovation is a tool that helps to transform the way a manufacture does business in this ever changing competitive world. A survey was carried by Prof. Mark Dodgson and Dr. Peter Innes on Australian Inno- vation in Manufacturing. Innovation in manufacturing sector benefits Australian economy by the increase in exports that led in the increase in its GDP. The growth in export includes the value added goods that are transformed by innovation. It also helps in providing healthier environment by producing less wasteful, cleaner and more sustainable production process. Australians are focusing on reducing the cost of production and assembly, and also encouraging teamwork and providing employees consultation all these are a part of redesigning and reconstructing of jobs all these are done to fulfill customers demand in effective manner. Innovation has an impact on the IT sector also as it helps in the development of new ways of it and it adds value to it and it helps in competitive strategy. There was an in- vestigative study done by the University of Nagoya by Prof Takao and Prof Shogo on Japanese manufacturing firms, it shows that innovation and authorization of business decision are done by them regarding cost, quality and they make working teams who are close to the customer. Innovative strategic competitiveness results in cost differ- entiation advantage that turns the niche market to mass market. An article on UK manufacturing firms was done by Keld Laursen and Ammon Salter, this tells us about the innovative competitiveness strategies; the open market is the key word for the development of the firms. To compete in the market, organizations develop variety of goods to offer the customer. It is done by the working team they search for new ideas and with the help of both internal and external factors that boost the firms in achieving the target.
  2. 2. The growth of the firms is achieved by way of innovating new product, the competi- tiveness between firms stimulate the growth of new products by way of innovation and this leads to lower costs and the quality improvement of the product all these tends to increase the demand of the product. Question 2- “Innovation in public sector is about new ideas that work at creating public values” (Mulgan). Innovation gives strength to an organization to survive and it motivates an organization to gain more profits and to grow in the market. There has been a major change in fast food chains; the innovative way of menu dis- play is totally opposite from the traditional way of presenting It this is called new script given by Bart Nooteboom. It displays self-service menu to choose, pay, carry food to the table, eat and clear up. But; earlier it was different it says to choose, be served, eat, then pay. The success of any innovation is the relationship between the innovators and the end-users and between elements of the supply chain (Clayton, 2003). Innovation also helped the government in the opening of NHS in the UK is work of innovation and the concept of Open University was introduced by the UK’s Labour Government in 1960, this university is not based on a particular physical place but it is created virtually and students are taught with the help of television and telephone and more over it is meant for people of all age group. NHS is a combination of three things in an entirely different and unique way, it consist of the telephone, nurses and computers with diagnostic software. People are free to call NHS at any time to take help even it is midnight or early in the morning. One size does not fits all so all the needs that are fulfilled of the customers have to be altered to meet the requirements of the people, that is why innovation is very impor- tant, further to increase the efficiency and to control cost to meet the budget of the firm, further more improvement is very necessary to have good outcomes and to give efficient delivery which is very important in public sector. Innovation is not always encouraged and it is not always beneficial for the public sec- tor. It involves a huge amount of money so for those firms with small budget is diffi- cult for them to innovate. Although government encourages innovation but some- times they create hindrance in certain projects which they feel is not feasible and are not good for the people at large. Cultural and social risk is also involved there can be a possibility of hurting the religious feeling also so the innovation is stopped.
  3. 3. Teamwork is important for the innovation; it should be supported by various people like ministers, officials of the firms, board of directors and department heads they are the people who helps in deciding the budget for the innovation and encourages the team to work and perform better. Policy and planning is very important for any inno- vation to accomplish the goal of the firm. Innovation requires dedication and hard work because of the involvement of science and technology. It has taken years to de- velop telephone but the UK government has not taken time to develop call centers to help the customers in their various inquiries. Apple and Innovation Apple Inc. came into existence in 1976 when Steve Jobs and Steve Wozniak left their jobs to create an inexpensive, simple personal computer. So they came up with Apple I worth $666.66, and after that they never looked back and as they say the rest is his- tory. After that Apple came up with innovative products like Apple II, MAC, IPOD, IPHONE and their latest forefront product IPAD. Apple can be used as a synonym to innovation. Steve Jobs has lead Apple to be a pio- neer of innovation and creativity for many years. It fosters innovation in products, processes, leadership, customer satisfaction and models for business. Apple has a In- novation Factory in which it harvests the talent, ideas and creativity from its people which can lead to profitable ventures. Apple’s culture and its eminent employees, partners and customers drive innovation and help the business to grow by grabbing every opportunity available. Apple believe that is has to lead its customers rather than being led by them, as Apple tries to come up with such revolutionary products which the customers cannot have knowledge about. Apple comes with only limited products in different lines as it can focus on its target market and tries to efficiently penetrate the chosen markets and maximize sales. Apple moreover creates such products which is difficult to duplicate, thereby helping them fight against the competitors. Apple’s motto of “ Think Differ- ent,” is what separates it from its competition as they come up with forefront prod- ucts. Apple has also been effective reorganizing inefficient business sectors by its markets and networks thereby proving innovation does not mean invention. Innovation can be carried out in products, service, processes, systems, etc. The 4P’s of innovation are Process, Product, Paradigm and Position. Apple has been effective in the implementation of these 4P’s. Process innovation has been made by Apple when it made available music to be purchased online through the App Store on the itunes, and started online shopping of the products. Innovation made in products by Apple have been novel. They have come up with products like Macbook, Ipod, Iphones, feather touch technology, slim laptops, high battery life in their products.
  4. 4. Apple’s paradigm has changed from being computer manufacturers to Creator of De- signer products. Moreover position of Apple in the minds of the consumer has changed from being just another computer manufacturing company to being an Inno- vative and Creative company, and their products are not only bought for the ingenuity and use but also as a fashion accessory. Apple has followed push strategy for marketing their products and their innovation has been incremental and radical after analyzing the inside and outside environments. Apple has effective research and development departments probably the best in the world. It analyzes information from competitors, suppliers and customers to help them innovate. It tries to forecast future demands and creates products to create de- mand automatically. Apple had high absorptive capacity has it is a highly learned or- ganization. Innovation process in Apple can be linked to the Simplified Model of the Innovation process which consists of Searching opportunities for innovation then selecting the best option, Implementing the option and capturing the benefits. Proper and effective networks and linkages have to be made to make it an innovative organization and then a learning organization. Apple is definitely a learning organization and carries out proactive and open innovation. What drives Innovation in Apple? Apple generates ideas, manage innovation and then effectively diffuse the innovation. They generate ideas or search for opportunities by carrying out effective research and development, Apple has an innovation factory which carries out all experiments using the talented pool of people they have. It follows competition and tries to stay one step ahead of them. Effective linkages and networking is very important as valid information can be gained from them, so relations should be maintained with suppliers, dealers and other partners. Apple believes in learning and working in teams. Apple’s innovation is driv- en by external uncertainty and competition. Apple is also very effective in finding new market opportunities and reorganizing areas which were inefficient. It fills the gaps existing in the markets for example the gap of a product which was needed to fill the gap between a computer and a phone, so Apple came up with IPAD. Authority is delegated by Apple so that the innovative people can focus on their cre- ative work rather than sorting out other problems. Apple’s credibility is very high, it is a trustworthy company and trust breeds innovation. Criticism should be accepted willingly by the company as it helps out shaping good ideas into great ones. Looking outside your organization is very important as in the inside everything might be all right but when you compare it to the outside it might not be. Moreover every time a company brings out new ideas or products it need not be from using new technolo- gies. Constraints of resources also breeds innovation.
  5. 5. To implement the innovative strategies requires communication of the idea to the company and to the outside world. The information made available has to be man- aged and projected effectively. Optimum use of Apple’s resources has to be made at the right time and place and proper project planning has to be carried out. Effective marketing activities has to be carried out to position the new idea or product in the minds of the customer. Apple is way ahead in this field in comparison to the other competition it develops such a demand for its products even before its production, for instance their pre-booking of the new product IPAD even months before launch of the product, this proves Apple to be the pioneer of innovation. Risks for the projects have to be assessed and managed for the proper diffusion of the innovative idea and project. What are the strategic enablers? Enablers of innovation capability in Apple are its Organizational Culture, People Management, Innovation Strategy and its Innovation Competencies. Apple develops an innovative culture right from the top of the management. Innova- tion has to be managed properly by the collaboration, leadership and the culture of an organization. Apple’s culture of innovative thinking also fosters the innovation pro- cess. Moreover leadership of Steve had been empowering to the company, he has in- spired many new ideas and helped sharing the visions of the company. Apples func- tioning has been smooth and open, without any bureaucracy. Apple has been able to develop models of change and innovation through systems theory and used focused groups and experimentation. Apple’s motto “Think Different” promotes all working people in the organization to be innovative. Apple recognizes, protects and encourages all innovators in the organi- zation. Innovators in the company are also rewarded either in monetary terms or recognition based. Apple has invested much resources in innovation because innova- tion requires much funding and lack of it can hinder creativity. Apple promotes diver- sity in their workforce as people from different background perceive things different- ly, so new interpretations and ideas can be created if diverse thinking is involved. Through benchmarking you can learn from outside and make changes within the or- ganization. Innovation is internalized in all people working for Apple as it is every- one’s role. Apple regularly evaluates all on going projects, as analyzing current activ- ities is essential to ensure proper work is being done, double loop learning should be followed. The employees who are in direct contact with the customers and the managers are most likely to initiate innovation in Apple. So they should be managed properly as they area also the ones who are the most resistant to change. Views of all stake hold- ers should be considered as they are also a source of innovation. The employees of Apple are skilled so they are able to handle the risk, it also tries to learn from their
  6. 6. mistakes in the fast. Financial resources available to Apple also helps in funding the innovation of the company. Best human resource is available to Apple which keeps them a step ahead of the rest, as there is no substitute for knowledge and talent, un- less Apple innovates and tries to comes up with an alternative. Jokes apart, the imple- mentation of the innovation is very important as proper testing of its working and ef- fectiveness has to be done then only can be a successful endeavor. The innovation should be exploited well to get the most profit possible by carrying out the support activities like production, selling, ,marketing and after sales services efficiently. What are the barriers to Innovation? Apple faces a few hurdles which curtails their innovation capability. Apple always launches any new idea quite early and gives a date for the product launch in the fu- ture, it starts it marketing activity early. So Apple has to be efficient to make the deadline, this hinders any further innovative changes that could have been brought to the product as its focus shifts on to production. Moreover under delivery pressure products are made costly, rather than cost effective. Administrative pressure also in- creases as the products have to meet the launch date, so they stop thinking about things differently. Under this daily pressure to stick to time horizons and budgets, in- novation leaves to be of prime importance until the goal is met. Apple sometimes tries to avoid risks , but low risk leads to low rewards, so Apple must take some cal- culated risks if it wants high rewards, Apple can do so. Apple’s culture and structure of the organization can sometimes constraint innovative thinking even if the technology is available, so culture needs to be shared by all and communication should be open. Public can sometimes doubt the effectiveness of some of the Apple products and expects a lot. This expectations can burden Apple a lot, so constant efforts have to be made to keep up the innovation. Apple sometimes tries to protect its reputed identity to increase their credibility and sustain itself, so it creates limits and gives responsibilities and lays down rules but innovation crosses the limits set by the organization. So instead of limiting its network, it should broaden it and manage all stakeholders effectively. Apple sometimes calculates the value of innovation in quantifiable terms like market share and profits and forgets things like reputation, leadership, talent, etc. These things neglected sparingly make the value of the firm so it should change the way it values innovation. Apple lead the customers rather than following them, this can hurt their company in the long run. So customers should be given utmost importance. Apple may have di- verse workforce but overtime their thinking will start matching this may hurt the in-
  7. 7. novativeness of the company. Apple tries to make all its products look quite similar, this stops the creativity of the design innovation. Apple itself is its biggest enemy so it manage innovation effectively. Negativism and giving up can hurt Apple’s innova- tion capability. Complexity should also be avoided, managed or used effectively. In- novators come up with many ideas but which is the most appropriate one is hard to decide Apple has to keep that in mind. Microsoft were not going to work on the inter- net idea until now but they did this made our life so much easier. Apple’s market research is limited and this can hinder their organization as customer is the ruler and not Apple and importance should be given to their needs. Apple has also faced some barriers to Innovation when it has outsources some parts to other companies and they have come up short, or some suppliers did not provide in time. Apple relies on logic a lot but innovation is not derived by logic and some assump- tions are also made which may be incorrect. References “Innovation in Public Services” by Idea Knowledge (09/05) “Ready or Not? Taking Innovation in the Public Sector seriously “ by Geoff Mulgan “Fostering Innovation in Public Services” by David Albury “IT and competitive advantages: the case of Japanese manufacturing companies” by Takao Makido, Shogo Kimura, Panos Mourdoukoutas “Standards Australia” by Mark Dodgson and Dr Peter Innes, University of Queens- land Business School “Innovation and Competitiveness” by John Cantwell “The manufacturing contribution to innovation” by Arnoud de Meyer “The Exchange- the top 10 drivers for innovation” by Martha Heller “ Overcoming Barriers to Open Innovation at Apple, Nintendo and Nokia” by Erik Pontiskoski and Kazuhiro Asakawa “Organizational Climate for Creativity and Innovation” by Goran Ekvall “Champions of Change: Identifying, Understanding, and Supporting Champions of Technological Innovations,” Organizational Dynamics; summer, Vol. 19. Issue 1 by Howell, J. M. and Higgins, C. A. (1990): “Assessing and improving the enablers of innovation: the development of an Innova- tion Capability Assessment instrument” by Michael Edward Ottaviano