Innovation and Technology Management - Assignment Example

TABLE OF CONTENTS Innovation and Technology Management Introduction Literature Review 3 Task One 3 Successful Strategic Planning 3 L’Oréal 4 ARM Holdings UK 4 Failure of Strategic Planning 5 Kodak 5 Hewlett Packard 6 Task Two 7 Barriers to Innovation 7 Gale Company UK Limited 8 Whirlpool Corporation 9 Apple 10 IBM 10 Amazon 11 Discussion 11 Conclusions 12 Recommendations 14 References 15 Innovation and Technology Management Introduction Innovation was defined by Rogers to constitute an object or practice that was regarded as novel by a person or other unit of adoption. This idea was expanded upon by Egbu and Young, who described innovation as the effective introduction, application and utilisation, of ideas in a group, organisation or role. Barrett et al. demarcated it as the effective creation and execution of a novel idea that improved the overall working of the organisation (Pan, 2010, p. 79). These definitions establish that innovation is recognised in the literature, as being a process. Jones and Sadd stated that innovation denotes an entire series of events that transpire over time, and not some isolated or sudden act. It entails all the activities necessary for bringing a new process or product to the market (Pan, 2010, p. 79). McAdam et al. have stated that better innovative orientation results in the enhanced growth of small and medium enterprises (SMEs). The reason behind this is that the capacity of a firm to generate knowledge for the purpose of innovation constitutes a cardinal determinant of competitive advantage. This has been described in the works of several researchers, such as Freeman and Soete (Thompson, et al., 2013, p. 934). Thus, innovation in SMEs enjoys a positive correlation with stronger performance, with respect to the areas of employment, profitability, and sales. Nevertheless, as declared by Christensen and other researchers, a few of the studies discerned conflicting evidence. Such evidence has shown that endeavours to innovate can dislocate business activity to the extent that they jeopardise performance (Thompson, et al., 2013, p. 935). Bergemann disclosed in his work that such effects could be attributed to the resources required for innovation. As such, these requirements of resources had the potential to divert crucial resources from the other routine activities, which could affect its very survival. Consequently, managers who are more averse to taking risks, tend to avoid investment in novel ideas. Therefore, SMEs are likely to achieve either innovation or growth. Attempts to realise growth and innovation, simultaneously, could create serious difficulties (Thompson, et al., 2013, p. 935). In addition, the Organisation for Economic Co-operation and Development (OECD) defined innovation as being comprised of the essential commercial, financial, scientific and technical measures for the following. First, the development and marketing of improved or new manufactured products. Second, the commercial use of improved or novel processes or equipment. Third, the introduction of a new approach to a social service. Research and Development is one of these steps (Mobbs, 2010). As such, there are conflicting views regarding the origin of innovation and the circumstances from which it emerges. A certain amount of ambiguity persists in the description of innovation. Moreover, its wide applicability has resulted in a large number of definitions employed to describe this phenomena in different contexts (Cardellino & Finch, 2006, p. 151). There is considerable difficulty involved in establishing a common comprehension of the extent of change, novelty, and diffusion necessary for classifying a phenomenon as an innovation. Literature Review Task One Successful Strategic Planning Industries and firms function in a macro-environment that consists of economic, socio-cultural, political-legal, and natural environments. A firm could enter a market due to the apprehension that a disruptive technology would wear away its competitive advantage. On the other hand, a firm could employ the very same disruptive technology to attack incumbents who had been successfully using an extant technology. Finally, another firm could be acting in response to the opportunities presented by its political-legal environment (Afuah, 2009, p. 15). The industry environment is characterised by buyers, complementors, rivals, substitutes, and suppliers. Frequently, a firm may decide to introduce a new product, in order to makes its presence felt in an area of the market that it has identified, and in which there is no such product. An instance of this is provided by the A380 super jumbo aircraft that was introduced by Airbus (Afuah, 2009, p. 15). On occasion, new strategies could arise, on account of a hostile competitive environment. An example of this is provided by Dell’s decision to makes sales directly to customers, instead of utilising distributors. The latter had refused to stock its products, at that juncture. During that period, Dell had commenced business and the distributors were more interested in selling IBM and Compaq merchandise (Afuah, 2009, p. 15). L’Oréal L’Oréal has a diverse and exemplary workforce, and believes that utilising diversity results in greater creativity and problem solving skill. Its diversity of talent motivates innovation and promotes commitment towards comprehending customer requirements. This company is proud of its strong female workforce, and 64% of its management is female (L’Oréal, n.d.). The diversity of talent in this company motivates innovation and promotes commitment towards comprehending customer requirements. L’Oreal’s success can be attributed to the diversity of talent it employed to satisfy customer requirements. This diversity of talent contributed to enhancement of innovation and commitment towards customers. ARM Holdings UK ARM an UK company dealing in semiconductors, implements an innovative business model. It does not manufacture products, wherein its technology is utilised. Its technology is used by its partner companies, who combine ARM IP with their technology to produce energy-efficient and smart semiconductor chips that find wide use in the contemporary electronic contraptions (Business Case Studies, 2014). ARM charges a one-off licence fee for the use of its IP. Thereafter, it receives royalty fees for every semiconductor chip that incorporates its technology. Significantly, ARM functions as an outsourced research and development department, for its partners, and monitors changes in its external environment, in order to keep ahead of its competitors (Business Case Studies, 2014). By analysing the changes to its external environment, ARM successfully establishes challenges, opportunities, and threats. ARM Holdings UK projected itself as an innovative model by sharing its technology with its partner companies. The major technique followed by ARM in achieving success was that it worked as an outsourced research and development department for its partners. Failure of Strategic Planning Kodak The Chief Executive Officer of the Eastman Kodak Company, during its days of dismal performance, was George Myles Cordell Fisher (Deutsch, 1999). As the chief of Kodak, Fisher failed to come up with innovative and brilliant ideas. One of his major shortcomings was that he did not outsource the major portion of production. Such a move would have rendered Kodak more creative and responsive. In addition, he was unable to adopt the Gillette model, wherein, the main profit was from blades and not the razors. In the context of Kodak, the sales of photographic film should have been the main focus. Kodak sold inexpensive cameras and relied upon customers purchasing large quantities of expensive film (The Economist, 2012). With respect to digital cameras, the Gillette model does not succeed. All the same, Kodak developed a significant business with digital cameras. However, the advent of camera phones ruined this market. Moreover, Kodak proved to be unsuccessful in evaluating market trends. For instance, it had placed considerable reliance upon its photographic film being purchased in large quantities by the new Chinese middle class. This class initially purchased photographic film, but subsequently transited to digital cameras (The Economist, 2012) Furthermore, Kodak has been subjected to inconsistent leadership, and its strategy has been changing with its changing leadership. Kodak had failed in making innovative decisions, akin to the sale of Gillette razor blades, in the area of digital cameras. Since, Kodak could not evaluate the market trends it relied mainly on the sale of its photographic films, which finally proved to be a failed venture. Inconsistent leadership with frequently changing strategies contributed to Kodak’s failure. Hewlett Packard Carly Fiorina (born Cara Carleton Sneed) was the Chief Executive Officer of Hewlett-Packard Co, during the 1990s, when the company faced very strong competition from Dell and IBM (Vries, 2005). Under Fiorina, Hewlett Packard (HP) emerged as one of the widest ranging technology company across the globe. This company produced several devices ranging from digital cameras, to printers and supercomputers. In the year 2002, Fiorina adamantly went ahead with the acquisition of Compaq, for which she paid with the loss of her illustrious career. This move had been strongly opposed by the major shareholders of the company, including Hewlett. Moreover, she undertook legal battles against Dell, IBM, EMC, Sony and other companies, without any success (Mendenhall, 2014). Despite being a gifted and decisive communicator, Fiorina could not succeed. Many executives working for her either left for other companies or were dismissed by her. Fiorina was opposed to altering strategies, although she engaged in dramatic acts. She merged the 80 odd autonomous business units of HP into four divisions. This had the effect of depriving thousands of workers of their employment. Moreover, she was compelled to oppose the disparate cultures of Compaq and HP (Mendenhall, 2014). The termination of Fiorina’s career in HP has been attributed by some to her failure to execute her strategic plan. HP faced several difficulties, such as in enterprise computing. Moreover, the EMC Corp emerged a stronger competitor in storage. Furthermore, HP was losing business to Dell and IBM in the area of servers. It had been contended by analysts on Wall Street that the various divisions of HP would have much greater value, in isolation, when compared to that as an integral entity. Fiorina had resisted every attempt to disband HP (Mendenhall, 2014). As such, the failure of HP can be attributed to the absence of well thought out strategic planning, by its CEO Fiorina. Task Two Barriers to Innovation The successful implementation of policy interventions is promoted by comprehending the impediments to business innovation. An understanding of these barriers is, in addition, essential for constituting the evidence base for such interventions. Some of the hurdles to business innovation are; internal obstacles envisaged by the enterprise at the time of conducting innovation activities; and the external elements that prevent innovation (Robson & Kenchatt, 2010, p. 32). All the same, in comparison to the other impediments, which was also observed in the previous survey, cost factors were most frequently deemed to be the most significant barriers to innovation. This included the direct resource costs of innovation activities, the economic risk associated with such activities, and the costs to be borne at the time of acquiring finance (Robson & Kenchatt, 2010, p. 32). In addition, market factors were isolated by a larger number of firms, in comparison to the survey of the year 2007. However, comparatively lesser number of enterprises experienced constraints due to lack of knowledge. This was despite the perception that the absence of qualified personnel constituted a major impediment (Robson & Kenchatt, 2010, p. 32). As such, the enterprises undertaking innovation activity could be expected to regard cost and regulatory aspects as barriers. On an average, this perception was twice that of the businesses that did not innovate. The harmonising was closer, with regard to market factors, despite market knowledge or technology not being considered an impediment to efficacious innovation. From this it can be surmised that businesses acquire knowledge about barriers to innovation, as the outcome of their endeavours to innovate (Robson & Kenchatt, 2010, p. 32). Gale Company UK Limited The Gale Company, UK limited provides services related to real estate assignment. It was founded in the year 1997, with the intention of extending the services being provided in the US. This organisation obtained a contract for providing front-of-house and back-of-house services for the global corporate headquarters of GlaxoSmithKline (Cardellino & Finch, 2006, p. 157). The Gale Company developed the Content Management Solution at GlaxoSmithKline. This innovation utilised plasma screens with dedicated digital feeds to enable the transfer of information throughout its facilities. By employing the networked multimedia solution developed by the Gale Company, these plasma screens received independent multimedia feeds (Cardellino & Finch, 2006, p. 157). As a consequence, targeted and localised information could be transmitted to different users and organisations, located in the building. This plasma screen programme had developed into a sophisticated system, with the recognition of the full potential of the technology involved. Whirlpool Corporation The Whirlpool Corporation is of a hundred years vintage. It has provided household appliances, such as those used for laundry and in the kitchen, to its consumers across the globe. Its success has been maintained and promoted via innovation, which is the driving force of this company. One of its major innovation activities is the Derwent World Patents Index on Thomson Innovation. This component of Whirlpool Corporation makes available the crucial patent data and analysis tools. These enable the company to provide unique solutions that sustain its competitive edge, ensure superior share value, and are aligned to its brands (Thomson Reuters, 2011). Despite being a manufacturer of refrigerators, washing machines and dishwaters, this company is a redoubtable global innovator. This company believes in having cross-functional global teams, which successfully amalgamate varying perspectives and areas of expertise. Such functionality has ensured its dominant position in innovation (Kostopoulos, 2008). It is the unswerving conviction of Whirlpool Corporation that innovative thinking emerges from every place and person. Approximately a decade ago, this company had conducted a worldwide campaign to infuse innovation as a basic competency throughout the length and breadth of the organisation. As a result of this initiative, its employees across the world participate and contribute to innovation related activities (Whirlpool Corporation, n.d.). Apple In the year 2001, Apple introduced its iPod. However, the MP3 industry had already reached awesome proportions by that time. The classic simplicity and user friendly interface of the iPod rendered it a favourite with the consumers. Another innovative feature of the iPod, which endeared it to its users, was its ability to shuffle through songs and to create playlists (Ene, 2014). At present, the iPod has more or less come to symbolise Apple. This was one of the first products to have been released, after Steve Jobs returned to Apple, in the year 1996. A large number of products tend to become obsolete or unfashionable, with the passage of time. However, the iPod has not met with this fate, and it continues to be re-invented and re-imagined (Ene, 2014). Due to continuous innovative changes to its products, Apple emerged a market giant in the iPod section. IBM As a measure of innovation, IBM transformed its intranet into a social networking site. With this change, it became an easy task for its 400,000 staff, located all over the world, to confer with each other (Martynenko, 2012, p. 21). As a consequence, its interrelated skills became available throughout the world. Amazon In general, there have been several categorisations regarding innovation types in the large firms. Product innovation tends to be the most frequently observed form of innovation. It could include, new products and improved products. Another areas is that of service innovation, which has become particularly significant. Such innovation can be described as original developments in the activities that are undertaken, in order to make available the basic product and to render it more attractive to the consumer (Oke, et al., 2007, p. 738). Discussion The following discussion deals with the data pertaining to innovative success of some of the above mentioned companies. The UK IS data of the year 2009, disclosed an enhancement in the perception regarding the cost barriers to innovate. In this regard, the availability of finance depicted the maximum increase at 9% over the corresponding figure for the year 2007. In comparison to large firms, SMEs regard hurdles to innovation to be greater (Robson & Kenchatt, 2010, p. 32). L’Oréal is a major recruiter of graduates, and accounts for an eighth of the graduate placements in the UK FMCG. Around 40 graduates are admitted to its Management Trainee Scheme, every year. Most of these individuals undertake long and successful careers with L’Oréal. In addition, every year this company provides 100 paid internships (L’Oréal, n.d.). In the realm of innovative home appliances, Whirlpool Corporation is a major manufacturer and marketer. With its headquarters in Benton Harbor, Michigan, this company employs in excess of 80,000 people. It has around 60 production and research centres across the globe (Kostopoulos, 2008). In a silent but steady manner, Amazon successfully tripled its revenues to $13 billion, from its earnings in 2002. The chief reason behind this success was the provision of alternatives to its customers. Such choice was not only provided with regard to products, but also in the context of purchasing directly from Amazon or from external vendors. Such options were evident in the music, videos, and e-books sold by this company (Fast Company, n.d.). Conclusions In the case of organisations, innovation is not restricted to the development or employment of technology, or other varieties’ of goods and services, and change in the process. It is possible for enterprises to transform their conduct of business strategies, in order to make themselves better adapted to the competition. Such change is frequently accompanied with innovation in the process or product. It also transpires as an independent course of action for ameliorating competitiveness Furthermore, process innovation entails the improvement or creation of production processes, service or administrative functions. It also includes developments in the systems, processes and re-engineering measures adopted at the time of developing new products. Moreover, organisation innovation pertains to innovation in management initiatives. This variety of innovation belongs to the firm level type of innovations. The strategic planning of HP failed for the following reasons. HP executives were not swift enough to comprehend the complementary and non-complementary competencies, synergies, and strategies of the different cultures. There was also absence of trust and support among the stakeholders; such as Fiorina, shareholders, employees, and the board. In addition, Fiorina failed to earn the loyalty of her employees. In the case of Whirlpool Corporation, in order to achieve its objectives, it engaged in a long-standing investment to create such competency. Some of the constituents of this investment are; redesigning business processes, providing training to thousands of employees, generating an innovation management mechanism, and changing the culture of the company. In the above mentioned instance, such employee participation has produced novel ideas, services and products. The beneficiaries have been the consumers, who have been provided with unprecedented gains that have never been witnessed in the home appliances industry. Whirlpool Corporation has always emphasised the importance of embedding innovation as a core competency. In addition, companies such as IBM, and Amazon, achieved success by expanding their clientele by novel methods. Apple took innovative measures with its products to achieve its objective of emerging a market giant in the business field. As such, innovation cannot be restricted to one particular area. It may be with respect to product or service or an idea that encroaches into the customer world. Management initiatives play a major role in the success of any firm. Some companies like ARM Holdings and L’Oréal achieved success by adapting innovative measures, such as projecting themselves as outsourced departments and using diversified skills that were consumer friendly. At the same time, companies such as Kodak and Hewlett Packard failed due to lack of innovative measures that were in coordination with market trends. Recommendations It can be surmised that, innovation cannot be restricted to any particular field of an organisation. Barriers to innovation may be costs incurred due to innovation or lack of skilled labour or technical knowledge that coordinates with the latest market requirements. Organisations can overcome these barriers by identifying the problems that hinder their development and making suitable changes. This has to coordinate with the market trends. As such, innovative management arises from the effective management of innovation processes in business. The objective of innovative management is to perpetually improve and provide the tractability to address the escalating demands of customers. The outcome is improved competitiveness. The success of innovative management is determined by the early identification of risk areas and the adoption of suitable measures. These measures should bring about the successful implementation of innovation in the business. Moreover, there should be emphasis upon possibility. It is to be realised that uncertainty is an integral feature of the process of innovation. As such, the leaders concerned have to remain vigilant regarding indications of market fluctuations affecting their project. They should respond immediately to any market changes that affect their business. References Afuah, A., 2009. Strategic Innovation. New York, NY, USA: Routledge. Business Case Studies, 2014. ARM-A vision for a smarter world. [online] Available at: [Accessed 13 August 2014]. Cardellino, P. & Finch, E., 2006. Evidence of systematic approaches to innovation in facilities management. Journal of Facilities Management, 4(3), pp. 150-166. Deutsch, C. H., 1999. Chief Says Kodak Is Pointed in the Right Direction. [online] Available at: [Accessed 26 August 2014]. Ene, S., 2014. Retrospect: Apple & It’s History Of Innovation. [online] Available at: [Accessed 15 August 2014]. Fast Company, n.d. The Worlds Most Innovative Companies. 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