Is Crowd Sourcing Just a Cheap Way for Brands to Develop New Products and Services - Case Study Example

Is Crowd Sourcing Just A Cheap Way For Brands To Develop New Products And Services? Table of Contents Introduction 3 Discussion 3 A Brief Overview of Crowdsourcing 4 Reasons of Using Crowdsourcing Systems in Business 5 Evaluating Whether Crowd Sourcing is Just a Cheap Way for Brands to Develop New Products and Services 6 Conclusion 9 References 10 Introduction Business has become quite challenging for the companies operating in the global scenario to conduct in an effective manner. With the rising intensity of competition in the business market among the players, it becomes quite important for the companies to develop a distinct position and reputation for themselves so that they can easily comply with the changing nature of the business. Contextually, companies have the need to strategize their move in a distinct manner in order to present themselves as a more developed and innovative player in front of the potential customers. In this regard, the strategic decision making of the business units has become quite crucial (Society for Human Resource Management, 2006). Hence, in order to diversify and enhance their decision making, companies adopt the approach of crowdsourcing. It is a particular practice wherein corporate houses obtain the required services, ideas as well as contents from a large pool of people rather than following conventional format, wherein ideas are usually acquired from employees or suppliers of the business (Brabham, 2013; Li, 2012). With this concern, the essay will primarily emphasize analyzing whether the approach of crowd sourcing is just a cheap way of companies with regard to develop new products or services. Discussion From the above discussion, it is quite apparent that business has become quite challenging for the companies belonging to this modern day context due to various critical aspects. These aspects comprise increased level of business market competition, gaining momentum of globalization along with internationalization and adoption of pioneering technological advancements. These aspects eventually compelled the companies to develop strategies that are different and innovative in nature, attracting the attention of maximum number of people. Contextually, the notion of crowd sourcing came into existence (Li, 2012). A Brief Overview of Crowdsourcing Crowdsourcing is regarded as a particular approach of the companies wherein they take the assistance of the people of the outside world to deal with certain problems of the business or consider their viewpoints in that particular regard. A few of the examples in this regard can be the approach of the companies like Wikipedia and Yahoo Inc. among others that actively and extensively involves common people in their operational activities. It has been noted that the approach of crowdsourcing registers a group of people or the users of the products to build a collaborative relationship with the business further benefitting the entire community altogether. Another example, which could explicitly explain the aspect of crowd sourcing, is the approach of ESP Games. Such business units allow the users to collaboratively label images for the games while playing the same. Hence, this approach is considered to be quite beneficial for the business units owing to the innovative nature of the same along with its ability to acquire information directly from the users of the products. However, the process of implementing this particular approach entails certain critical challenges. For example, crowd sourcing system users like Yahoo and Wikipedia face challenges in the process of recruiting along with evaluating the people who are supposed to be collaborated with the operations of the business. Similar challenges can also be observed in the operations of other companies that implement the crowd sourcing approach (Doan & et. al., 2011). Reasons of Using Crowdsourcing Systems in Business Crowdsourcing is regarded as one of the modern aspects in the world of business. Companies often implement this particular approach with regard to deal with various day to day operational challenges arising in the business. This aspect is effective and beneficial for the business units owing to the fact that this enables business units to directly acquire information from the potential customers or the present users of the products. One of the most vital reasons for implementing the crowdsourcing model in business is to solve the problem associated with business operations in this contemporary world. Observably, crowdsourcing is often regarded as the online distributive problem-solving model, which facilitates the companies to solve various problems relating to operational aspects at large. With the implementation of crowdsourcing aspect, companies are now been able to conduct activities that were once being executed or solved by the employees of the business or any other outsourcing company. The use of crowd sourcing by companies in solving problems especially in the domain of product can be understood from the example of Threadless. It is a particular company engaged in making T-shirts, which can be apparently observed to design its various products based upon the ideas of the winners participating in online crowdsourcing competition. One such competition held in the year 2000 witnessed Jake Nickell and Jacob DeHart as the winners. This eventually impacted the operations of the business in a favorable manner as the ideas of the winners implemented in designing the t-shirts eventually augmented the sales of the business to an unexpected level altogether (Brabham, 2008). Furthermore, crowdsourcing is also implemented by companies with regard to the development of new products or services with the help of the ideas obtained from customers. By taking the help of crowdsourcing via internet, companies are now been able to collect huge set of database concerning the needs along with the demands of the customers. This aspect further influences in producing along with developing products in accordance with the desires of the customers. Moreover, it also saves a lot of money for the companies (especially that operates having a small capital) by a considerable extent. Moreover, it also boosts the sales of the business as the products are directly made in accordance with the tastes of the customers (Croon, 2013). Companies also deemed to implement the approach of crowd sourcing with regard to enhance innovation as well as creativity in the workplace and eventually the product or services of the business altogether wherein views of external people are duly considered in the decision- making procedure of the business (PWC, 2011). Outsourcing is another domain of business wherein the role of crowdsourcing is quite significant. Companies that are especially operating in small scale lack system skills in various areas and activities of business. Hence, they can always seek for obtaining suggestions from the external experts with the assistance of crowdsourcing (Schenk, 2009). Evaluating Whether Crowd Sourcing is Just a Cheap Way for Brands to Develop New Products and Services It is apparent from the above discussion that the aspect of crowdsourcing is quite beneficial for the business units in various domains of the same. Observably, the above discussion succinctly discussed that crowdsourcing is used for various purposes in the operations of the business. However, it is often argued that crowd sourcing is just a cost way means for companies to develop their products or services (Bayus, 2012). This statement or argument can be opposed owing to the fact that apart from being cost effective, crowdsourcing provides several other advantages in various other operational domains of the business where it is being implemented (Sloane, 2011). In this regard, it will be crucial to mention that crowdsourcing is a particular notion wherein people of diverse intelligence and knowledge offer their crucial views and ideas to the business, which further ensures better results in the operational aspects. Owing to various facets associated with crowdsourcing, companies are now been able to offer product or services to the customers in accordance with their needs and growing demands by a considerable extent. Prior to the emergence of the approach of crowdsourcing, companies tends to acquire external information and views only from the employees or the suppliers who are deemed to be quite limited. However, with the help of crowdsourcing, companies are now been able to obtain information from a wider group of people (Fernando J & et. al., 2012; Simonson & Brahma, 2011). Again, with the implementation of crowdsourcing, companies are now been able to deliver mass creative productions which were once recognized as an unaccomplished dream. It has been noted that the information which is required to be obtained via crowdsourcing is massive and diversified in nature. These aspects not only enhance the operations of the business but also impacts the profitability in a favorable manner altogether. With maximum creativity in the products or services of the business, customers get easily attracted from the same. This augments the sales of the products of the business and in turn augments the profitability of the overall business (Howe, 2008). Increase in customer engagement is one more benefit, which crowdsourcing provides to any particular business unit. It can be affirmed in this similar concern that owing to the aspect of crowdsourcing, customers can get completely aligned with the operations of the business, which further keeps their loyalty intact with the same. This is also a favorable contribution of crowdsourcing towards the modern day business operations (Bekkelund, 2011). Motivation of customers is duly considered to be the other beneficial aspect of crowdsourcing. Observably, in the practice of crowdsourcing, companies allow the customers to get involve in various operational domains that further enhance their self-esteem along with enhancing their skills and knowledge. This can ultimately result in gaining maximum loyalty of the customers towards the business units, resulting in making the business operations to be performed effectively (Libert & Spector, 2010). From the above analysis, it can be affirmed that crowdsourcing is beneficial in various ways for a particular business. It can be implemented in various operational domains of the business with acquiring beneficial results in each of the same. Hence, it can be stated that crowdsourcing is not just merely a cheap mean for companies in the development of new products or services, rather numerous significant benefits can be acquired from the same. Conclusion As per the above discussion, it can be summarized that crowdsourcing is regarded as one of the latest developments in the world of business, which has been able to facilitate the companies to attain significant benefits. It can be implemented in various operational aspects of business with diverse intentions and purposes. With the implementation of this particular approach, companies are able to get views and knowledge from a wider audience, which eventually enhances the overall efficiency of the business up to a larger extent. However, it has often been argued that companies only implement this particular approach in developing their products or services as it is cost effective. This statement can be opposed from numerous benefits that can be acquired from the approach of crowdsourcing apart from assisting brands towards developing new products or services. Thus, it can be concluded that crowdsourcing is indeed quite important and extensively used in the business units all over the world as it provides maximum number of benefits. References Brabham, D. C., 2008. Crowdsourcing as a Model for Problem Solving. The International Journal of Research into New Media Technologies, Vol. 14, No. 1, pp. 75–90. Bayus, B. L., 2012. Crowdsourcing New Product Ideas over Time: An Analysis of the Dell Idea storm Community. Home. [Online] Available at: http://public.kenan-flagler.unc.edu/faculty/bayusb/WebPage/Papers/BayusCrowdsourcing(5-2012).pdf [Accessed December 30, 2013]. Bekkelund, K. J. R., 2011. Crowdsourced Customer Acquisition A Conceptual Framework for Freemium and Propositions for Future Research. Norwegian University of Science and Technology, pp. 1-89. Brabham, D. C., 2013. Crowdsourcing. MIT Press. Croon, S., 2013. Co-innovation: Developing New Products and Services in Cooperation with Customers in Social Media Platforms - Customer Motives. University of Twente, pp. 1-11. Doan, A. & et. al., 2011. Crowdsourcing Systems on the World-Wide Web. Communications of the ACM, Vol. 54, No. 4, pp. 86-96. Fernando J. G-S. & et. al., 2012. The Importance Of Crowdsourcing. International Conference on Industrial Engineering and Industrial Management, Vol. 16, pp. 661-666. Howe, J., 2008. Crowdsourcing Why the Power Of The Crowd Is Driving The Future Of Business. The International Achievement Institute, pp. 1-9. Libert, B. & Spector, J., 2010. Crowdsourcing Customer Service: How May We Help We? Pearson Education. Li, G., 2012. Crowdsourcing: Challenges and Opportunities. Home. [Online] Available at: http://hotdb.info/hotdb2012/slides/hotdb12-crowdsourcing.pdf [Accessed December 30, 2013]. PWC, 2011. Harnessing The Power Of Crowdsourcing Does Your Company Stand Out In A Crowd? Home. [Online] Available at: http://www.pwc.com/en_US/us/people-management/assets/crowdsourcing-paper.pdf [Accessed December 30, 2013]. Society for Human Resource Management, 2006. The Essentials of Strategy. Harvard Business Press. Sloane, P., 2011. A Guide to Open Innovation and Crowdsourcing: Advice from Leading Experts in the Field. Kogan Page Publishers. Schenk, E. & Guittard, C., 2009. Crowdsourcing: What can be Outsourced to the Crowd, and Why? HAL, pp. 1-29. Simonson, E. & Brahma, S., 2011. Simonson & Brahma, 2011. Every Crowd has a Silver Lining. Everest Global Inc, pp. 1-7. Read More