THE END......

So this is the end guys, I want to thank you for taking the time viewing my posts over the past few months and I hope you have learned as much about innovation as I have and how businesses around the world are striving for that competitive edge over the competition.

There were a number of things which stood out for my in the creation of the blog and personally i feel that having an idea is not everything in this world, you need to have sustainable evidence and knowledge of whether there is a need for that new idea and if it is has an opportunity to succeed. The perfect example of this is Coca Cola trying to improve a product that definitely did not need improving and resulting in the loss of millions. I hope this blog helped and as always...have a nice day

Product Lifecycle

Nearing the end of my blog and looking back I briefly touched on the Product Life Cycle in my second post. I thought i would bring you a quick post expanding on how a new products life develops and changes during its introduction into the market. It is of major importance to a company such as Apple or Microsoft because it allows them to identify when the product is reaching the end of its life and a new product needs to be ready to be put into the market. The process is called The Product Life Cycle, which is shown in the Diagram below:

According to jobber (2010: 355) no matter how wide the product mix, both product lines and individual brands need to be managed over time. A useful tool for conceptualizing the changes that may take place during that is called the Product Life Cycle. Apple are a good company to show how they link their products to the Product life cycle, for example looking at the Iphone there has been five different versions of the phone each new product has been released as the other started to enter into the decline stage of this process. 

However some companies choose not to let their products enter the decline stage and will change their strategy to prolong its life within the maturity stage, therefore extending the product life cycle. this is shown in the diagram below: 

There are a number of ways a company can do this, for example update the product or its software, Sony did this with the PlayStation 2 as it began to fall into decline they updated its software and this therefore prolong the interest within the games console although it will not last forever and new innovations need to be released which resulted in the release of the PlayStation 3 and resulted in the end of the PlayStation 2.....

Jobber. D, 2010, Principles and Practice of Marketing, Sixth Edition, McGraw-Hill Education

Website: Product Life Cycle Extension

http://mgmt280.blogspot.com/2010/01/product-life-cycle-extension.html, 

[Internet] Accessed 17/01/12

Website; Pricing Professional Services & Product Life Cycle

http://liveseysolar.com/pricing-professional-services-and-product-life-cycles-case-study

[Internet] Accessed 17/01/12

Coca Cola

Coca Cola are possibly the most recognizable brand name on the planet and they remain as one of the major innovative companies in the world. There recent focus has been turned towards the environment and as we are aware of the current climate problems facing us Coca Cola are developing recyclable products which are reusable after disposal.

Coca Cola (2011) aim to be the beverage industry leader in energy efficiency and climate protection!! Browsing through their website shows a huge number of innovations which they have come up with over the years, there really is not much competition left for them to compete with as they buy out all there competition when a new idea comes onto the market.

The innovation i wanted to focus on was to do with the new packaging which Coca Cola is highly advertising at this time to show that they have a strong position on helping the environment and developing environmentally friendly products. The new packaging is called "PlantBottle" packaging, the new bottle has the same design as the old one but is 30% plant based and is 100% recyclable. Coca Cola (2011) state our focus on life-cycle management has helped the use of high value recyclable materials and reusable packages.

About 85% of our global beverages volume is delivered in primary packaging made from polyethylene terephthalate (PET) plastic, aluminium, glass and steel. The materials are 100% reusable. They continue to drive new innovations around bottle closures, recently a shorter height closure was developed to reduce the amount of plastic in the packaging. Coca Cola show a huge variety of innovative ways that they are reducing our carbon footprint, the link below shows how they are reducing the packaging of their products to help with disposal and recycling

http://www.thecoca-colacompany.com/citizenship/package_design.html

Even though Coca Cola put a lot of money in to their innovation they have had a number of failed products which have cost millions for the company. Shavinina (2003: 850) explains that Coca Cola developed a new formula for Coke, in an effort which lasted for two years the company spent around $4million on the new formula conducting extensive testing with customers to develop a taste that they would prefer. The blind taste tests showed that 60% of the consumers preferred the new product. When the new product was entered onto the market it was quickly rejected and consumers were demanding the old formula back within three months of its release.

This just shows that product innovation alone cannot always be a success for a company without the backing up of the other areas of the company such as the marketing and customer relations sectors, all are needed to work together for a company to be successful.


Website, Coca Cola Reducing Packaging, 2011,
http://www.thecoca-colacompany.com/citizenship/package_design.html
[Internet] Accessed 17/01/12

Shavinina. V. L, 2003, The International Handbook on Innovation, Elsevier Ltd, P. 850

 

Microsoft

Here at Microsoft in the UK, innovation is at the core of everything we do: our ultimate goal is to help the UK become a leader in the world's digital economy. (Microsoft (2011) Innovation)


Microsoft are possibly one of the top innovative software companies recognized all over the world, there is rarely a computer in homes without access to the famous Microsoft Office Programs. The previous CEO Bill Gates is one of the best known entrepreneurs of the computer revolution, Gates relinquished his role as CEO for Microsoft in 2000 to Steve Ballmer although he is still the Chairman of the company. The company offer a wide range of user friendly products from computer and phone software to the Xbox 360.

 They are also looking into other areas of the market to exploit such as the break through's in the development of the Worldwide Telescope and their new focus on genetic research. (Microsoft (2011) innovation) The video below is a great example of Microsoft and how they represent innovation, the video shows how Microsoft hope to improve learning within schools in 2019. Take a look, its inspiring......



Microsoft is most recognised for the success of its computer desktop features such as internet explorer and Microsoft office, they have had little competition within these areas and the only competition i can remember is Mozilla Firefox which has been left in the background of internet explorers success. The company also bought out the windows phone which in comparison to the current Blackberry's and Iphones has not been as competitive as they would have liked. Not only were they late entering the competition their was little desire for the product from the company and there were also complaints that their operating systems just were not that good in comparison.

The area that microsoft are excelling within at the minute is the games market with the current Xbox 360 being one of the most wanted consoles and outselling Sony's PlayStation 3. Brightman (2011) states that with the NPD data continuing to trickle in, we know see that 1.21million units of the PS3 were sold during December, certainly not bad but it represents an 11% decline compared to Xbox 360's 42% increase. With December in rear-view, totals can be added and we see that PS3's total for November-December is just 1.74 million compared to Xbox 360's whopping 3.27 million. That represents a difference of 88% somewhat disappointing for Sony.

Microsoft is currently working on a new software app for Smart phones where a GPS system allows the user to see what areas are like and whether they should avoid them. The system is to keep the public safe from dangerous areas and will also give a crime record of the area to give you warning on whether you should avoid it or not. Personally i don't think it will work but we will see speak soon....


Website: Brightman. J, 2011, Xbox 360 Outsells PlayStation 3
http://www.industrygamers.com/news/xbox-360-outsells-ps3-by-88-during-holidays-in-us/
[Internet] Accessed 17/01/12

Website: Microsoft Innovation Page, 2011
http://www.microsoft.com/en-gb/about/innovation.aspx
[Internet] Accessed 17/01/12

Electric Cars....

More and more people these days are stressing the importance of environmentally friendly products, packaging and recycling! The main new product which will be introduced into the market will be the electric car, as of 2012 there is a limited number of available electric cars because they are not essentially at the same level as a petrol based car.

Although, there is a serious amount of interest in the electric car market as can be shown by the current sales of the Nissan Leaf. Which was brought onto the market in December 2010, since then sales  have rocketed and it is said to be the best electric car on the market.

Sales of the 100-percent electric Nissan LEAF totalled 954 units in December, with deliveries totalling 9674 since the vehicle's December 2010 U.S debut. With sales exceeding 21,000 globally, the Nissan LEAF is the worlds best-selling electric car.
 (http://www.inautonews.com/us-auto-sales-nissan-sales-up-77-in-december-2011-volume-up-173)


After some research into electric cars it seems that there are a number of companies willing to develop the innovative vehicles as a result of peoples interest in reducing pollution and lowering carbon emissions.  The electric vehicle developed in Spain aspires to transform city transport, doing for electric cars what London's "Boris Bikes" had done. The idea is that local authority owns a fleet of Hiriko cars and rents them out to people who need them for a small fee. They have an inbuilt GPS system so they can be located by smart phone and can be left anywhere and the electric batteries mean they have zero emissions. 


Although the statement about emissions being reduced is true i did notice a comment on the article about the electricity being used by these cars from Wadjet (2012). Basically explained that the electricity used to recharge the batteries is used by the public electricity supply and how is that generated within the UK? The majority is generated by fossil fuels, mainly by the highest carbon fuel of all namely coal. The only real environmental advantage electric cars enjoy is that they have much smaller ranges and recharge times last several hours. So they are unable to run the same mileage a petrol car could go for. 
http://www.guardian.co.uk/society/2012/jan/17/hiriko-electric-car-social-purpose


To conclude i can see why more people are attracted to having an electric car with the constant increase of petrol prices and the attractiveness of having a car which is environmentally friendly, although with the electric costs and the need for recharging often puts doubts into my mind as to whether they are really worth it....


References


Website: Hiriko Electric Car Social Purpose
http://www.guardian.co.uk/society/2012/jan/17/hiriko-electric-car-social-purpose
[Internet] Accessed 14/01/12


Website: US Auto Sales Nissan
http://www.inautonews.com/us-auto-sales-nissan-sales-up-77-in-december-2011-volume-up-173, [Internet] Accessed 14/01/12

People result in success....

Whilst looking through Google I discovered this website which made me think about my previous post on creating a competitive advantage for a company. The website showed how the key to success is a successful workforce. Clicking the diagram below will show you the diagram of the link between leadership and creating a competitive advantage, I felt that employee involvement was key to a successful innovative company as giving the employees room to breathe will be key to overall progressive performance. A Leader is important to the direction a company goes in and this diagram shows how good leadership and practicing good business techniques can therefore lead to everything shown within the centre of the diagram. 

The website went on to analyse the diagram and it explained that each of the three stages within the diagram all linked together result in the central goals being achieved. For example a workforce which is given the quality of work life, such as job security and realistic workloads will result in quality service being achieved. Employee involvement within the company will give them a sense that they are more involved within the company and would boost morale and productivity within the workforce.

Website: Your People Are Your Competitive Advantage
http://www.corporate-eye.com/blog/2008/06/your-people-are-your-competitive-advantage/ -
[Internet] Accessed 12/01/12

Creating Competitive Advantage.....

Using innovation companies are able to give themselves a competitive advantage, there are a number of different strategies which businesses use. the innovation strategy is essentially devising the overall business strategy, it determines when and where innovation is required to meet the aims of the organisation. Innovation strategies depend on the particular organisation, its culture and business aims.

After looking through my lecture slide i have been able to identify the main generic strategies which are used by a company. For example businesses will adopt the following generic strategies for innovation within different areas of their company:

• Product Market Focused Strategies 
• Cost Reductions 
• Differentiation
• Niche Markets 
• Re-positioning
• Diversification 
• Supply Chain 
• Pioneering, First to market strategies 
• Outsource and alliance strategies

(Gordan-Hall: 2011) 

I wanted to focus on what i thought were the most influential strategies for the company such as Niche Market, Supply Chain and Product diversification. Today i was reading up on small and medium sized enterprises, they have to operate within niche markets to survive and product innovation is key to their survival. Stamm & Trifilova (2009: 404) explained that small to medium companies have always operated within niche markets, they have developed products that satisfy specific customer needs. Whereas large firms develop new products to exploit new markets to satisfy customer needs.
However to survive into the future the smaller companies will need to innovate within global markets, they must learn to think more strategically about the products they release and to understand their unique position within the market. The niche market approach is directly related to product innovation, it is all about finding a gap in the market and exploiting that gap to fill the needs of the consumer. It is the base point of innovation and it gives the smaller companies that small edge on the larger companies who are not looking for innovation.

I also wanted to look at supply chains, a supply chain is the stages a product takes from assembly to reaching the consumer, companies are constantly looking for ways to reduce that time and come up with new innovative idea of getting better products to the consumers as fast as they can.
Porter cited in Zachariassen (2010: 347) states that being competitive can be measured by several parameters that are linked to products, processes, improved quality, time and delivery performance. Traditionally, sources for competitive advantages are found in costs and differentiations linked to the product, market and manufacturing strategies. Several practical examples exist that demonstrate the impact of Supply chain solutions on overall company performance.
In this current economic climate innovative product demand is high and people want to have the best products at a certain time with the best quality available. The video i found on YouTube below shows the top 10 supply chain innovations in the world, i found this very informative on how innovation affects this part of the company and how beneficial it can be to focus on...

The video basically shows how new innovations have revolutionized the economy, for example the bar code reader improved the speed of sales from shops, or the assembly line developed by ford. Henry ford showed the idea of innovation to new levels, he developed the idea from flow type operations in meat packing operations. As shown in the video he took the original time of 12.5 labour hours to make a car and turned it into just 93 minutes. This is an incredible example of innovative thinking from Henry Ford and not only did he improve the car manufacturing but this had an effect on how all products began to be developed.


Finally i want to discuss the importance of product diversification and how much of an effect that can have on a company trying to survive in today's economic climate. Diversification is all about changing the consumer base and who the product is aimed at, and its main aim is to expand the market of which the product is currently aimed at. 


Teen People was an example of product diversification since it was a new product that expanded the market potential of the original product, People magazine. While some teenagers undoubtedly bought Peoplemagazine, they were not People's target market. Eventually, however, the product and Web site were merged into the People brand. Courtyard by Marriott and Fairfield Inn are other examples of product diversification since before Marriott offered those new brands they had little potential to expand sales in the business and budget categories. Marriott had business and budget guests, but they were not specifically targeted, so by concentrating on these two markets they were able to add to their market potential.
(http://www.theproduct.com/marketing/diversification.htm)

This just basically shows how important innovative strategies are to a companies success and influential they can be in developing the companies market share. The simple things such as product diversification or exploiting new niche markets can give the smaller companies that competitive edge against the larger more experienced giants in the market!!

References

Stamm. V & Trifilova. A, 2009, The Future of Innovation, Cower Publishing Limited

Gordan-Hall. J, 2011, Lecture 3, Innovation Strategy - Designed to Achieve Competitive Advantage, Accessed 08/01/12

Zachariassen. F & Mikkelsen. O. S, 2010, Supply Chain Management - Sources For Competitive Advantage, Academica 

Website: Product Diversification 
http://www.theproduct.com/marketing/diversification.htm -
[internet] Accessed 10/01/12