Where Does the Customer Fit in Innovation Strategy - Assignment Example

A Comparative Study: The and Innovation Strategy Details: al Affiliation: Submission
A Comparative Study: The Customer and Innovation Strategy
The modern consumer is, understandably, very active and well connected, and so informed, to be precise (Prahalad, Ramaswamy, 2004). With an internet regime that has leveraged information sharing far beyond the traditional word-of-mouth, it has become increasingly apparent that the “voice of the customer” is but a key element of competitive advantage that can no longer be ignored. In their study titled “Is Market Orientation a Source of Sustainable Competitive Advantage or Simply the Cost of Competing?” Kumar, Jones, Venkatesan, and Leone (2011) use a panel data constructed from numerous organizational surveys conducted over a nine-year period to prove the very importance of customer-input as a way of responding to rapid market changes; “market orientation” is, thus, a critical factor both for the success of a new product released into the market as well as that of the firm in general. Investigating the very same topic but in a different dimension in a study titled “Integrating Customers in Product Innovation: Lessons from Industrial Development Contractors and In-House Contractors in Rapidly Changing Customer Markets,” Sandmeier, Morrison and Gassmann (2010) concurs with above scholars noting that the modern customer is an active co-designer in the creation of value, injecting their specialized knowledge of needs into the mainstream production away from the traditional, passive recipient.
Dell’s ‘IdeaStorm,’ one of the most successful crowd sourcing forums ever invented in history, serves as a perfect example of how the ideas generated by the customers can be efficiently incorporated into the innovation process. Through IdeaStorm alongside organized events, customer panels, partnerships among other avenues, the company gathers product requirements directly from tens of thousands of daily customer-interactions with a complete view of the industry’s landscape (Rohrbeck, Steinhoff, & Perder, 2008).
Dell started out as a direct seller from its very inception—beginning with a mail order way before the use of the internet to drive sales. The deletion of the traditional middlemen distribution process allowed the company to generate own corrective market data tailored towards customer needs. In its quest to deliver value to customers, the company has pursued virtual integration, developing effective partnerships with manufacturers [suppliers] that enabled “just-in-time” delivery with significant cost and product pricing advantages compared to the competitors’ in-house operations. Most importantly, the company reorganized its assembly processes in line with data collected, grouping workers into “cells” with complete assembly capabilities to meet the customer specifications; thereby enabling the transfer of knowledge between them and ultimately reducing assembly times by 75 percent.
References
Kumar, V., Jones, E., Venkatesan, R., & Leone, R. P. (2011). Is market orientation a source of
sustainable competitive advantage or simply the cost of competing? Journal of Marketing, 75(1), 16–30.
Prahalad, C. K., & Ramaswamy, V. (2004). The future of competition: co-creating unique value
with customers. Boston: Harvard Business School Press.
Rohrbeck, R., Steinhoff, F., & Perder, F. (2008). Virtual customer integration in the
innovation process: Evaluation of the web platforms of multinational enterprises (MNE). International Conference on Management of Engineering & Technology, PICMET 2008, Portland, 469-478. Retrieved from http://dx.doi.org/10.1109/PICMET.2008.4599656
Sandmeier, P., Morrison, P. D., & Gassmann, O. (2010). Integrating customers in product
innovation: Lessons from industrial development contractors and in-house contractors in rapidly changing customer markets. Creativity & Innovation Management, 19(2), 89–106. Read More