Managing Innovation in Samsung Group and Nokia Oyj - Case Study Example

Managing Innovation Table of Contents Table of Contents 2 Introduction 3 Overview of Samsung Group 3 Overview of Nokia Oyj 4 Innovation Management inSamsung Group 5 Radical Innovations 5 TRIZ Tool, SCM and Six-Sigma Solutions 5 Innovation Management of Nokia Oyj 7 Innovation Network 7 Open Innovative Strategy 8 Compare and Contrast between Samsung Group and Nokia Oyj 9 Learning from One Another in terms of Innovation Management 9 Recommendations 10 Idea Formulation 12 Implication 12 Review 12 Conclusion 13 References 14 Bibliography 18 Introduction Overview of Samsung Group Samsung Group is one of the leading electronics information technology brands, which was established in the 1938. Samsung Group is a South Korean multinational company and the company has extended its business operation in the globally with its innovative ideas and commitment towards the need of the consumers. Over the years the company has successfully targeted all the three segments of customers such as niche segment, economic segment and lower segment. Apart from this, the company has operated its operations in the global market with the assistance of its several subsidiaries such as ‘Samsung Electronics’, ‘Samsung Heavy Industries’, ‘Samsung Life Insurance’ and ‘Samsung Everland’ among others. The brand has faced with intensive competition with multiple other mobile phone manufacturing companies such as Apple, Nokia and Sony among others. Samsung Group has started its business since late 1970’s with the manufacturing of black and white televisions. Samsung expanded its operations to electronics manufacturing sector by taking reference of the competitive pattern and by implementing advanced technology (Silva, 2014). With the effect of increasing globalisation, Samsung has extended its operations in the world wide market place. Samsung Group had captured a large number of market shares in the global market through the help of three key strategies such as introducing ‘New Technology’, ‘Innovative Products’ and ‘Creative Solutions’ for its customers (Samsung, 2014). At the same time, the company has promoted ‘Industry’, ‘Partners’, and ‘Employees’ with the aim of attaining substantial profit from its operation in the global market (Samsung, 2014). However, with respect to the mobile phone market, the company has been losing its competitiveness over its major competitors. In this regard, it was reckoned that the company market share dropped by 24.9% in the first half of 2014. In addition, the increasing competition from the Chinese cell phone manufacturers in terms of price, features, and reliability has hampered the growth of Samsung Group in cell phone market segment. The brand currently employees a total count of 270,000 employees. Apart from the cell phone manufacturing sector, Samsung has always been counted as world leaders in display technology (Silva, 2014). Overview of Nokia Oyj Nokia Oyj is a globally renowned communication based company, which was established in the late 1900s. Nokia Oyj is a multinational corporation, operating its business in communications and information technology segment. Over the years, the company had contributed its pioneer effort in the telecommunication industry. It has spread its product and services in more than 150 countries (Nokia, 2014). Nokia has dominated the mobile phone market for more than a couple of decades. In order to attract the attention of the consumers’ in a competitive market place, Nokia has launched various exciting features in its mobile product. At the same time, the company has also introduced several innovative tools technique with the intention of ensuring its competitive advantage in the global market. In this regard, it can be claimed that the company had to witness a drop in its share value by 4.4% during the early 21st century due to the fierce competition from Apple and Android in the marketplace (Olson, 2011). In this assignment the objective is to compare and contrast the innovation management of the Samsung Group along with Nokia Oyj with the assistance of appropriate models and frameworks. The study will aim to identify the innovation aspects of both these organisation. Moreover, the study will emphasise towards additional tools with the aim of improving the innovation management of both these business organisations. Innovation Management in Samsung Group Radical Innovations Innovation is essence for any business organisations in the contemporary environment. In this regard, Samsung has contributed its utmost effort for the development of people, planet and society. Samsung has incorporated innovation approach with the aim of improving the capabilities of the organisation. At the same time, innovation approach was introduced by Samsung for a change in the organisational structure along with its policies and methods. The continuous innovation has promoted greater degree of within Samsung (Tidd & et. al., 2001). Through incorporating radical innovations, Samsung has brought fundamental changes on its offerings, which has enhanced its position in terms of technological aspects as well as popularity (Tidd & Bessant, 2009). Moreover, Tidd and Bessant (2009) claimed that the application of four phases of innovation process has assisted Samsung to identify opportunities for the innovation. In this context, Tidd and Bessant (2009) further claimed that the company has focused on its current offerings through the assistance of innovation approach. Similarly, through the assistance of second and third phases of the innovation process Samsung has improved its competitive position in the global market context. It is also recognised that with the acquisition of fourth phase the company has improved its research & development aspects, which has assisted the company to design and develop products for all market segments at a reasonable price (Tidd & Bessant, 2009; Tidd & et. al., 2001). TRIZ Tool, SCM and Six-Sigma Solutions According to Ball & et. al. (2012), Samsung has applied TRIZ tool, SCM and six-sigma solutions for ensuring its long term sustainability in the global market. As TRIZ tools is the traditional problem analysing and solving technique, which was first introduced by the Soviet Union in terms of analysing and solving the required inventive issues. In addition, Samsung has also incorporated SCM solutions with the aim of ensuring the effectiveness of its supply chain management in the global market context for an extensive manner. In this context, it is recognised that through the adoption of this SCM solutions Samsung has brought excellence in its advanced planning and scheduling (APS) systems, which has enhanced the performance of the organisation in the global context (Ball & et. al., 2012). The adoption of six-sigma approach has assisted Samsung to attain success in its business operations spread across the globe. According Yang & et. al. (2007), Samsung has improved its product quality by proper assessment. At the same time, Samsung has concentrated on its consistency of the quality with the aim of ensuring the need of the consumers. In this regard, it is recognised that through the assistance of SCM solutions Samsung has enhanced its global business operation, which has also improved the performance of supply chain operations for the company. The execution of six-sigma approach has also assisted Samsung to improve four key aspects of business including ‘project discipline’, ‘sustaining results’, ‘effective HR framework’ and ‘quantitative strength’ of the company (Brown, 2008; Yang & et. al., 2007). The strong supply chain network has facilitated the Samsung to practice continuous innovation which has resulted in increasing the competitiveness of the company in the global electronics and telecommunication industry. According to the report published by Samsung C&T Corporation (2013), Samsung has accomplished growth and sustainability through establishing strong partnerships with its suppliers. At the same time, the company has focused on strategies with the aim of enhancing its effectiveness in the global market. Similarly, it is also identified that Samsung has adopted utility tools such as ‘Super AMOLED display’ technology for improving its technology. Consequently, Samsung has attained highest lead in terms of market share in the year 2013. On the other hand, through incorporation of TRIZ tool, Samsung has succeeded in providing customers a reliable and user friendly communication device packed with an appreciable display unit (Samsung Electronics Co., Ltd., 2013). In this regard, it can be claimed that ‘Super AMOLED display’ technology supports multiple display dimensions, added value to this brand in terms of launching multiple variants within the galaxy series. Moreover, Samsung has successfully brought up multiple product segments each targeting specific category of customers based on its features and prices (Oleaga, 2014; Samsung C&T Corporation, 2013; Samsung Electronics Co., Ltd., 2013). Innovation Management of Nokia Oyj Innovation Network Nokia Oyj has applied its innovation network to address the challenges of the business environment do to the changing technological aspects. The company has established long-term and short-term research and development department for improving its ability to innovate. Besides, to ensure the growth aspect of the organisation Nokia had incorporated ‘Open Innovation’ tool with the aim of enhancing the opportunity for the organisation and to maintain grater competitive traction. Nokia had also introduced a new innovation dimension for extended its market share in the global context (Nokia Growth Partners, 2014). Additionally, through open innovation tool, Nokia has ensured its opportunities for the service providers. In this context, it is depicted that ‘Colossal data analytics’ and ‘Telco Cloud’ are the most advanced solution incorporated by Nokia Oyj, through which the organisation has provided support to its millions of information technology and mobile internet customers (Argenbright & et. al., 2013). Through the assistance of innovation tools Nokia Oyj has improved its long term planning for ensuring sustainability in the competitive global market position. At the same time, Nokia also has enhanced its inter-organisational culture, which has assisted it to establish strategy according to its strength and capabilities. Apart from this, through the aid of open innovative tools, Nokia has incorporated appropriate strategies for ensuring the need of the consumers and also meets the expectation of the stakeholders. Moreover, it is also notified that innovation has assisted Nokia to maintain its commanding position in the global market (Jemala, 2010). Open Innovative Strategy Through incorporating open innovative strategy Nokia has improved its productivity and profitability in the global market context. Nokia has also established large design team for ensuring continuous innovation necessary for its survival in the current highly competitive market place. According to the report of Nokia Research Centre (2009), through the application of ‘Open Innovation’ tool, Nokia has improved its inter-organisational culture. In this regard, the application of ‘Open Innovation’ tool has motivated the entire workforce of Nokia to contribute their utmost effort towards the attainment of goal or objective of the organisation (Nokia Research Center, 2009). It is also notified that Nokia has incorporated specific new innovations to improve its designing and imaging applications of its information technology related products. The company has also invested huge amount in the development and innovation of new software and has acquired several companies with the intention of improving its ability to innovate (Soper, 2013). Compare and Contrast between Samsung Group and Nokia Oyj The analysis of the innovation management in Samsung Group and Nokia demonstrated that both the companies are involved in extensive research and development activities primarily to increase their ability to innovate. However, the analysis of Samsung revealed that Samsung is primarily involved in the incremental innovation while Nokia primarily focuses on radical innovation. Besides, Samsung focuses on extensive research to develop new technology to increase its knowledge and attain increased competiveness in the global market segments. On the other hand, Nokia has adopted open innovation tools for designing new products in the competitive market position with the aim of enhancing its competitive advantage (KTH School of Industrial Engineering and Management, 2013). Notwithstanding, the Samsung has been charged against copying iphone a brand of Apple Corporation which further reveals that the company is follower rather than the innovator of new technologies. Nokia in the recent time has been seriously influenced with the reduced capability to innovate new technologies which has dramatically resulted in losing its market share over few major competitors such as Apple Corporation and HTC (Martin, 2012). Learning from One Another in terms of Innovation Management Innovation is a continuous process which is important for the business organisation to sustain profitably in the highly competitive business environment. Thus, it is crucial for the organisations to acquire knowledge from their competitors and strengthen their ability to innovate. Although, both Samsung and Nokia can be identified to have made extensive investment in research and development activities, there still persist a space for these companies to learn different things from one another that would facilitate them to emerge as a strong competitors. In this regard, it can be apparently asserted that through incorporating TRIZ tool, Samsung has improved its display unit of the telecommunication devices. t It is recognised that through the implementation of this tool Samsung has gained customer loyalty and confidence. Moreover, it has also assisted the organisation to fulfil the need of the consumers more adequately (Oleaga, 2014). In this regard, it can be claimed that through incorporating this measure Nokia can improve its performance as well. On the other hand, Nokia Oyj has applied ‘Colossal data analytics’ and ‘Telco Cloud’ solution for its consumers with the aim of ensuring effective support to its millions of information technology and mobile internet consumers. Thus, it can be claimed that through incorporating ‘Colossal data analytics’ or ‘Telco Cloud’ solution Samsung can ensure its long term sustainability and enhance its market share in the global market place (Nokia Growth Partners, 2014). Recommendations Based on the above discussion, it is depicted that Samsung has adopted incremental innovation with the aim of improving its competitive advantages in the global market context. Considering this aspect it can be recommended that Samsung should implement ‘Multi-pronged Open Innovation Approach’ or radical innovation for its long-term success. In this regard, justifiable it can be claimed that through considering this approach Samsung will be able to enhance the opportunity of communicating and indulging in deep research projects with multiple other global industries and technology vendors. Moreover, it can be claimed that through the help of this approach, it can be possible to design and develop new technological products in the competitive market place, which will ensure sustainability for the organisation and also assist to maintain market leadership in the global market context (Samsung, 2014). In addition, Nokia Oyj has incorporated open innovation tools with the aim of enhancing its productivity and profitability. At the same time, Nokia has also tried to ensure their competitive position in the market place by improving the financial stability of the organisation. Thus, in this regard, it can be recommended that Nokia Oyj can improve its capabilities and efficiency through incorporating additional creativity tools. ‘Lean Six-sigma’ approach is one of the suitable approach through which it can be possible to enhance the strategic value of an organisation. Moreover, it can be also claimed that ‘Lean Six-sigma’ approach will also assist to improve the competitive value of an organisation (Go Lean Six Sigma, 2012). At the same time, the company should also engaged in developing new operating system (O/S) in order to eliminate the challenges faced by it in the past few years (Motorola, 2013). Apart from this, it can be recommended that both the organisation Nokia and Samsung can enhance their capabilities and efficiency through utilising appropriate models and frameworks during the innovation process (KTH School of Industrial Engineering and Management, 2013). In this context, it can be claimed that adopting the below articulated four steps would increase their capability to innovate. Idea Formulation Idea formulation is highly essential in case of improving or enhancing the performance of an organisation. In this regard, both Samsung and Nokia should motivate employees to come with new ideas with the aim of ensuring the sustainability of the organisation (KTH School of Industrial Engineering and Management, 2013; Shneiderman, 2007). Research and Development Both these organisation will need to emphasise on the research and development aspects with the aim of improving the quality of the product and services. Besides, creating separate unit or team for research and development activities would facilitate these organisations to ensure continuous innovation in their business process (KTH School of Industrial Engineering and Management, 2013). Implication After generating the idea and improving the research and development, it is highly essential to ensure that the entire process is implemented prudently and effectively (KTH School of Industrial Engineering and Management, 2013). Review Moreover, reviewing the entire process is also essential through which it can be possible to improve the performance of the organisation and bring further improvement in the innovation process (KTH School of Industrial Engineering and Management, 2013). Conclusion Based on the above evidences it can be claimed that additional creativity tools can enhance the performance of an organization. In this regard, it is recognised that both the organisation has applied innovation tools with the aim of enhancing the performance of the organisation through improving the quality of the products. It is also identified that through the assistance of open innovation and incremental innovation organisations have maintained consistency in terms of productivity. Thus, in order to conclude, it can be suggested that Samsung and Nokia can adopt Multi-pronged Open Innovation Approach and lean six-sigma tools in order to meet the objective of the organization in a more effective manner. References Argenbright, A. & et. al., 2013. A Case Study about the Impact of Communication on Innovation. Nokia, Oyj. [Online] Available at: http://classic.marshall.usc.edu/assets/164/26442.pdf [Accessed November 18, 2014]. Brown, T., 2008. How To Deliver On a Great Plan. Harvard Business Review, pp. 85-92. Yang, H. M., & et. al., 2007. Supply Chain Management Six Sigma at Samsung. Emerald Group Publishing Limited, Vol. 12, No. 2, pp. 1-3. Go Lean Six Sigma, 2012. The Basics of Lean Six Sigma. Wp-content, pp. 1-15. Jemala, M., 2010. Introduction to Open Technology Innovation Strategies. 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