Strategic Management of Technology and Innovation - Case Study Example

Select TWO cases (not covered (except perhaps superficially) in the textbooks) where one case shows successful strategic management of technology andinnovation and the other does not (i.e., compare and contrast the successful technology strategic management process with the unsuccessful one in terms of the best practices covered in the course). These cases may be ones that you know from direct experience at your current or past organizations, or that you glean from the literature (try to be imaginative with your selection). What are the key issues and lessons learned, in terms of the strategic management of technology and innovation, from your cases? Solution: Introduction: With the growing competition and the fast paced world, the importance of strategic management has also become very important. Companies with well designed and well planned strategies have shown high levels of success and profits when compared to companies with a weak strategic plan. This paper aims at contracting and comparing two cases of strategic management. The two cases chosen here are Amazon.com and Xelebri. The reason for choice of these two companies is the fact that although both companies have use technology and innovation in their planning there has been a strong difference in the results of the two companies (Mintzberg, Lampel, Quinn & Ghoshal, 2002). Amazon has become a world famous company while the Xelebri has been quite unsuccessful and has not shown the desired results as would have been thought. This paper firstly provides a brief introduction to each of the cases with a focus on the issues of the companies and the factors that have led to their success. Furthermore this paper will discuss the lessons learnt from each of these cases and a conclusion. Case 1: Amazon.com: Amazon.com was founded in 1995 by Jeff Bezos. The company only started marking profits in 2003 further which it has grown to become one of the most well known brands of the world. The company has always maintained its strategy to emphasis on widening of the business model by expansion and also customer innovation. The company has now grown to become one of the largest and most recognised brands of the world and is regarded as the number one online service. With a total of as many as six websites catering to almost thirty two million customers across the world, the company has been very successful. The company has developed patented software for itself and the company has a number of other companies who like to put their content onto the website. The company has used technology to develop a state of the art website which caters to all the needs of the customers and includes browsing, searching, reviews and content, and also recommendations and personalisation. The company was started with the aim of becoming one of the biggest and best online book stores. This however has changed a great deal over the years and the website is now becoming a store which is developed for customers and where customers can buy ‘Anything with a capital A’. The company’s strategies were completely customer centric and aimed to ensure that customers receive the best at all times (Markides & Markides, 1999). This is evident from the fact that the company took drastic steps to ensure the stopping of the email frauds. The company also filed cases against almost 11 fraudulent marketers who used the name of the company and forged emails to cheat customers. The secret behind the success of the company is the customer centric strategies that the company follows and the main focus of ensuring a variety and choice for the customers at all times. Case 2: Xelebri: Xelebri is one of the various other brands of Siemens. This brand is one of that has been developed to provide a phone to the fashion industry. Siemens has been known in the market for the excellent phones and contribution to the telecommunication industry. Xelebri falls into the category of Information and communications of the Siemens AG and under this is falls into the category of Mobile Phones. The phones are known for the voice centric, user centric, 3C, and accessory devices. Siemens holds a total market of almost eight percent of the total global market place of handset producers. The main purpose of this mobile phone was because of the fact that the designers had various complaints that their ideas were not being used completely and that the technology is important and not the design for the appearance of the product. However this company was a complete failure because the company did not have any strategies developed for the launching in line with the development, and also the company was unsure of the initial roll out companies and the pricing that the product would offer. These caused a serious issue for the company and were the basis of the failure of the company (Chesbrough, 2003). Also although the technology used in the product was great and the innovation was excellent, the usability was very low and was not user friendly. This caused the company to go into losses and not be successful despite the technology and innovativeness (Johnson, Scholes and Whittington, 2006). Issues and Lessons: The two cases that have been discussed provides us with a better understanding of how technology and innovativeness can be perceived differently and how the use of this can cause one company to be extremely successful while making the other a complete failure. In the case of Amazon, the company has also used high levels of technology and innovation to provide the customers with excellent services and innovative ideas every single day. In an interview when Bezos was asked the difference between retail and his business, he responded: ‘The three most important things in retail are location, location, location. The three most important things for our consumer business are technology, technology, technology. That’s what takes the place of real estate in out business. When we can improve our personalization algorithms so that we show something to somebody that they wouldnt have discovered in any other way, and then that product serves them very well, thats something thats incredibly valuable. And I can assure you that thats available on our Web site only because weve hired some of the most talented computer scientists in the world’ (BW Online, 2003). He further more moved on to say, ‘At a certain point, as old technologies do become well-understood and widely disseminated, they do become baseline technologies that no longer provide anyone a competitive advantage. Instead, those old technologies are just part of the cost to play. But throughout hundreds of years, there have always been new technologies that came along. If youre talking about new technologies, you can get competitive advantage. By building new technologies ourselves, we get to offer a better customer experience for millions of people. Does that give us an advantage? Absolutely. [But] you have to continue to innovate. This is something that has to be refreshed every day, every week, every year’ (BW Online 2003). This highlights the success factors of the company and how the company has recognised the effectiveness of technology and put it to good use. However, considering the strategy that was undertaken by Xelebri, the use of technology and innovativeness has led the company to face a number of losses. The company’s strategy was to develop a product which could be used as a fashion accessory like watches, glamour, and style rather than with computer, technological gadgets and microchips. The main lesson learnt from these cases is that a company can be successful if they use the technology and innovativeness in limited means to develop their products or services but do not overuse these to make them not as useful as the actual product. Technology and innovativeness play a strong role in the success of a product (Treqoe, 1983). If these factors are able to build a product, it is also possible that misuse of these can lead to complete destruction of the products and services as well. Being innovative is one aspect of the development of a product, however Xelebri has also taught us being innovative does not mean that the company will be successful as well. A successful brand or product is one which uses all the various elements in the right amounts and the right proportions and mixes technology into it to develop the product or in some cases rely on technology for the usage of the product. However if a company does not use the technology in the right proportions and does not take into consideration the customer needs then this would lead to a failure. No brand or product is successful without the customers and hence while designing a product it is essential to keep the usability factor in mind as well. Conclusions: As every other aspect of a company, the technology and innovativeness also require strategic management. This will allow the companies to ensure better overall products and services to the customers and will also lead to better brand building. A well planned and strategic use of technology can lead a company from aiming of being the largest online book store to the largest online store with almost anything available for its customers. Also it can lead the company to become successful like Nokia, which keeps innovativeness and technology as the forefront of the business and the basis for all the products, however in complete sync with the customer needs. A company needs to also consider factors like usability, reliability, endurance, accessibility and pricing in mind before using the technology or innovative ideas (Afuah, 2003). Also since the final users are always customers it is essential that all the strategic planning in terms of the technology and innovativeness is customer centric and customer focused. References Afuah, A. (2003). Business Models: A Strategic Management Approach. 22 August 2003. 1 Edition. McGraw-Hill/Irwin. BW Online, (2003). Speaking Out: Amazon.com’s Jeff Bezos. 25th August 2003. Accessed on 12th August 2009. Retrieved from http://www.businessweek.com/magazine/content/03_34/b3846634.htm CHESBROUGH, H., (2003) Open Innovation The New Imperative for Creating and Profiting from Technology. Harvard Business School Press, Cambridge, MA. Johnson, G., Scholes, K. and Whittington, R. (2006). Exploring Corporate Strategy. 7th edition. Prentice Hall, Essex. Markides, C., & Markides, C.C., (1999). All the Right Moves: A Guide to Crafting Breakthrough Strategy. December 1999. Illustrated Edition. Harvard Business School Press. Mintzberg, H., Lampel, J., Quinn, J.B., & Ghoshal, S. (2002). The Strategy Process: Concepts, Contexts and Cases. 4th Edition, Financial Times Management, Prentice Hall. Treqoe, B.B. (1983). Top Management Strategy: What It Is and How to Make It Work. Mach 1983. Touchstone Books. Read More