Innovation of the Nike Fuel Band - Case Study Example

Innovation (Nike FuelBand) Name Course Instructor Date Executive Summary A Nike Fuel Band is an innovative wristband that can track movements all through the day and it is designed to encourage users to increase their activity. This agronomic Nike Fuel Band records and displays four types of metrics that is; calories, time, Nike fuel and steps i.e. the ultimate athletic activity. Under the lead of Shaffer in 2013, Nike has been named as one of the most innovative company by Fast Company. This essay entails Nike Fuel Band Innovation. Its main aim is to analyze innovative perspective taken by Nike and competitiveness of this brand innovation. Nike Company has been used as the case study. The paper reveals brand influence, the commitment of the management, their attitude and how these influence innovation. This paper also analyzes some of the characteristics that lead to slow innovation, innovative characteristics like complexity and incompatibility which have been identified to be some of the challenges resulting to slow innovation. Elaborately, Nike innovative kitchen has been connected to wearable products like popular Flyknit shoe and the Nike Fuel Band. The idea of the Fuel Band works really well and it is an astonishing motivator. This innovative idea from Nike looks gorgeous and it has a band of silver at the clasp and a simple black rubbery exterior. Nike Fuel Band are water resistant though they are not waterproof meaning they can not be used for any water related activities like swimming, surfing or wakeboarding. Table of Contents Table of Contents 3 2.0 The idea – creativity 5 3.0 Invention and improvement 6 4.0 New Product Design 7 4.1 Comfort 7 4.2 Use 7 5.0 Paradigm Shift 8 6.0 Industrialization 9 7.0 Environment 11 8.0 Innovation management 13 9.0 Innovation and Competitiveness 14 10.0 Benefits of Nike FuelBand Innovation 15 11.0 The future on Nike FuelBand 16 12.0 Conclusion 16 13.0 References 17 1.0 Introduction According to Atkins et al (2002), many companies are knowledge based, and therefore they understand the fact that survival and success heavily rely on discovery, inventiveness, innovation and creativity. As such, an effective response to such demands both managerial and innovational changes within the company to ensure continued success. In the recent times, it has been noted that the rate of change is speedily increasing due to increase in knowledge generation, global diffusion, as well as, idea generation. The company began it expedition to elasticity in 1987 when it launched Nike Monitor. This was an early and very abortive attempt to come up with telemetry and biometrics for its clients while running. From the beginning, it was Nike’s idea to establish an increasingly engaged relationship with clientele. In accordance to Burke (2002) innovation generates momentous benefits, that is, in can introduce a chain of latest and superior quality of products and services in the market that enables the organization to increase its profitability. Actually, Nike among other producers of sports related accessories, globally, encounter various setbacks, most of which are experienced during routine actions (Burke 2002). However, even with many challenges being encountered, management often shifts blame and assigns different allegations, i.e. lack of apposite decisions on daily organizational operations, labor force and employment of technological assistance. On the other hand, a significant amount of research has shown that Nike Company has easily transformed the challenges encountered into success through innovation (Scott 2003). Nike through Fuel Band has demonstrated that it has ability to apply proper innovation to solve everyday challenges that are encountered. However, while the company has basic knowledge with regard to this innovation and has successfully applied it successfully, the company has been met by several challenges like production of Fuel Band that is waterproof though the Band is water resistant. Scott (2003) states that most companies only pay lip services to the advantage and power of innovation and remain reluctant to aggressive commitment to the high levels of investment that is demanded by innovation. Even with the fact that innovation is highly recognized as the support of the company and numerous advantages have been associated to innovation and many companies have ignored innovation and a trend to upgrading company's product. In reference to Scott (2003) innovations reflects a great approach through which many companies that are relates to sports accessories like Nike, Puma and Adidas have responded have responded to technological challenges. In addition, it is noteworthy that the survival in the global competition demands innovation. As such, it is evident that innovation is a fundamental tool applied by most companies to attain success. Even though, innovation has not been entirely attained in the Nike Fuel Band, thus raising an alarm that Nike as a company might be facing enormous challenges that hinder it from attaining organizational change. As emphasized earlier, this study expansively discusses Nike Fuel Band innovation, its challenges and how this innovation has helped to Nike as a brand. 2.0 The idea – creativity The latest Nike+ Fuel Band is easy for the uses to share and celebrate the achievements. With the new creativity users can easily capture their activity through photo, uploaded images from an iOS, friends, tag location and tag on the pictured activity. Users also have an option to customize their photo with an overlay which includes the current Nike Fuel score and the Nike+ logo prior to sharing images with the rest of the face book community. The users on Nike Fuel Band with an iPhone application are able to invite, manage and compete with friends through Facebook, contacts and Nike+. The update allows the athletes to utilize Nike Fuel in an innovative customizable leader board that help to compare, challenge friends and to compete with them to keep up. 3.0 Invention and improvement After the successful launch of Nike Fuel Band in the beginning of the year, Nike has since released an update version Nike+ FuelBand Application that is used on iPod and iPhone today this new upgrading has designed to improve the overall experience. One of the key additions to the updated fashion include integration with path- the mobile platform that enable one to share his or her activity with acquaintance and family. This kind of partnership allows athletes to sync Nike+ FuelBand activity with their path profile allowing the user to keep track of the places and moments where they had their NikeFuel. By the end of their day, it is possible for them to see their graph of progress against their goal and the path moments aligned with that progress. As such, with path, it is possible to share the moment that matters and the NikeFuel goal with acquaintances and who matter. From pattern ship, innovation follows on from the most recent integration i.e. Nike+ Running which allows the users to share their running information with the Path profile. Additionally, the new application update further consent to background syncing that makes the process seamless and easier. In order to initiate the sync, one holds down the button of Nike+ FuelBand for at least three seconds and the application finishes you sync and notifies when it is fully done. With the new version, it is needless to open an application with the preceding version. With the new version, setting the time can be done through app as opposed to just through computer. It is also possible for a person to view the work offline and without the need to be connected. At last, one can easily check on the battery level through the app instead on waiting for the warning signal that you are approaching charging time. 4.0 New Product Design The design of the new product i.e. Nike FuelBand tracks a persons activity through a sport tested accelerometer. The gadget then translates every move into NikeFuel Points. Nike Company claims that the product tracks any movement that a person can perform and allows one to sync the FuelBand to a web platform and/or a mobile device. Once a person syncs, the results can then compare the projections against those of acquaintances or the actual goal. Pressing the FuelBand's button make the system to emit LEDs light up on the face. Different from any other gadget, the lights on the FuelBand seem to be embedded into the band and the effect is astoundingly pleasing. The white lights on themetric display readouts for its key metrics- like calories burned, Nikefuel accrued or Number of steps, and telling the time. It would be good to have alternative of keeping the time displayed always so that one can glance at the Nike FuelBand like a watch, though that would heavily effect on the life of the battery because the battery can only go for a week. It is effective to having live data on ones wrist rather than on ones an iPhone or iPod and unlike the Fitbit which only sync on the PC, Nike FuelBand can also sync directly with the iPhone compared to Bluetooth. 4.1 Comfort The Nike FuelBand is a very comfortable and light wear and it can be compared with livestrong band with a very small weight on it. 4.2 Use Nike FuelBand has a great boost from behavioral identification. With just a simple click on its button, one receives a LED notification which displays Fuel Points earned up to that second and the total calories burned during the exercise. In addition, a line of up to 20 lights alert a person on the progress. This data syncs wirelessly to the iPod, iPhone and can also be transmitted manually through the USB to the web platform. This platform provides a breakdown of all information in reports which can be daily, monthly, or annual. It is also easy to see how an individual's rates versus the gender or age group rate fair as well as, the entire Nike+ community. The gadget also has a trophy section where one can celebrate goals and other milestone one has hit. 4.3 Accuracy The Nike FuelBand accuracy is excellent, as analyzed by the charts. It is easy for a person to identify times he/she has exercised or moved more according to the hourly snapshots. 5.0 Paradigm Shift Paradigm shift and innovations have remained to be a normal part of the company. In reference to Scott (2003) new paradigm stimulate growth of new product-market opportunities require new capabilities and strategies. Unmistakably, the relationship between Nike Company and innovation become visible to be dynamic complex multi-level (Scott 2003). Documented literature studying innovation is diverse and capacious. In this study we seek to understand the nature of company and innovation relationship from different perspectives that is; the link between innovativeness and the business structural forms; company's innovation as a key process that enhance organizational learning and establishment of knowledge; and the company capability to introduce new innovative products and to adapt in the new competitive grounds. Nike FuelBand has improved Nike as a brand as assumed the competitiveness of other Nike products in the industry. The spread recognition of Nike FuelBand among athletes has attracted other competitors in to the market who produce similar products as the Apple Company which has gone far too poaching innovative staff from Nike being its major competitor. Expectedly, more innovations continue to come up and Nike as a company has since advanced to producing Nike+ FuelBand which is an upgrade of the Nike FuelBand. 6.0 Industrialization In accordance to Howells (2005) digital sport is not only about creation of essential sports gadgets. Nike FuelBand has a very promising market due to its ability to hold exceptional data. Nike is able to follow its clients through maintaining data, building an online community for the clients and through forging a tighter relationship with the clientele. Building the online community has been part on the broader effort to shift the heavy marketing difficult task into the digital realm. The Nike digital hook includes the Nike+Logo, Nike+SportWatch GPS, and the New Nike FuelBand. The time when companies used top-down campaigns is now old fashioned where stars like tiger Woods would bring up their signature shoe commercial of Airforce 1 or adverts bring up Bo Jackson’s commercials that would indicate “Bo Know” kind of Adverts on their replacement Nike Brings about a entirely new repertoire that brings about interactive elements where Nike as a Company communicates direct to it clientele. This happens either through performance tracking wrist band or a 30 story billboards. The company also chooses to use social media to in its campaigns and advertisements to fasten its commercials and reach it target customers all over the world in the cheapest channel of advertisement. The main reason behind this shift is very clear, Nike Company is going where its potential clientele base can be found and its main customer is the youth who spends 20% more on footwear and sports related costumes than the adult counterpart. This has given Television a big blow on advert compensation. Nike believes that the digital world allows the brand to interact more directly with its customers. This has been the key change that has been explained by Mark Parker the Nike CEO. The chart above explain the much that was being consumed through adverts a figure that has been significantly been reduced through the evolvement of industrialization in the modern marketing strategy. In addition, Marquee athletes have also remained example Kobe Bryant is arguable the greatest sports celebrity in China (China is the second largest Nike’s market); Mike Jordan has remained to be the most powerful Nike Company’s franschise. However, Nike note over relied of its handful of superstars to move its merchandise. Social sites have remained to be the biggest partners for Nike FuelBand advertisement and remain the cheapest way of advertisement for this innovative move. Compared with its competitor Nike has taken lead in this approach as demonstrated in the table below. FOLLOWERS OF THE LEADING SPORTS BRANDS IN TWITTER (As at Jan 26th 2012) Nike Basketball 192,000 Adidas Originals 174,000 Lulu lemon Athletic 169,000 Reebok 43,000 Sources: twitter The Nike digital perspective remains a true replacement for other marketing strategies that has come with this innovation. The innovation prides itself with unconventional approaches that have won accolades from insiders. In keeping with David Carter USC’s Director of Sports Business Institute, they have their finger on the pulse of what the clients wants. He starts that Nike subtlest moves have embraced it innovative approach in advertisement. In the past the company’s stock was returned 120% over the past 5 years according to the S&P 500 Index, this has since reduced to only 2.5%. 7.0 Environment There is a clear understanding of the impacts of organizational structure on an organization’s ability to generate technological innovations, create knowledge and teach (Burke, 2002). However, less is known about how the organization’s internal dynamics, as well as actor learning work together with the environmental and technological forces to generate organizational evolution. According to Scott (2003) the function of technological innovation in initiating the organizational change process remains unclear, and it is also not very clear on how the necessary conditions enable organizations to move from one structural model to the other. While the evolutionary and ecology theorists have considered analyzing the relationship between organizational evolution and innovation at the industry or population levels through the presentation of the historical data, a the management and organizational researchers have sought to study the adaptation at the individual organization’s level, which is primarily based on the analysis of the cross-sectional research studies (Howells, 2005). Recognizing the disparities between the two levels of analysis provides an understanding that the selection and the adaptation processes should be considered as two separate processes with regard to organizational evolution, while in essence, the newer organizational forms are emerging from the dynamic relation between these two processes (Burke, 2002). However, it is important to note that one of the main factors inhibiting theoretical progress within this field is the lack of cooperation between the organizational and innovation researchers (Burke, 2002). Despite the fact that most of the innovation researchers have for a long time laid emphasis on the significance of the organizational aspect of innovation, most of the innovation studies are continuously dominated by the economic approach, hence providing little space for the analysis of innovation and creative change within the organization (Scott, 2003). On the contrary, organizational researchers, particularly those that have developed a good literature on organizational learning, cognitive and creativity, barely link their work to innovation (Smith & Munn, 2006). Therefore, the stream of work that provides a significant potential for conceptualizing the micro-dynamics of innovation and organizational change has been left outside the field of innovation studies (Burke, 2002). Over all, the available research regarding the link between innovation and organization continues to concentrate on how the market forces and technology determine the organizational outcomes, while treating organizations as the main facilitators of innovation, instead of innovation itself (Atkins et al. 2002). A common example is the fact that most of the research studies tend to deduce that the technological innovations often generate organizational change, considering the fact that innovations have the ability to offer the organization a competitive advantage, while can also force the organization to a new set of standards and demands in order to achieve the benefits that come along with it (Smith & Munn, 2006). This fact, however, cannot be disputed, but rather, holding on to this deterministic view, is recognized as the one that overlooks the idea t that disparities in the organizational interpretations of, as well as the responses to the organizations’ external stimuli can actually have significant impact on the results of the organizational change process (Lorenzo, 2000). 8.0 Innovation management Generally, organizational innovation is a concept that refers to newer approaches through which work can be managed and accomplished within the organization, in an aim to promote and encourage a competitive advantage (Atkins et al. 2002). This entails how individuals and the organization organize the work processes within various key areas of the organization such as knowledge management, customer relationships, human resource management, and employee conduct and retention (Atkins et al. 2002). However, it is worth noting that the foundation of organizational change is the need to enhance or change a product, a service or a process within the organization (Atkins et al. 2002). At the same time, while almost all innovative processes focus on change, it is important to bear in mind that not all change processes are innovative. It can thus be highlighted that organizational innovation demands an innovation culture that basically supports new processes, ideas and, in general, new approaches to conducting business operations (Scott, 2003). Despite the fact that innovation is as old as the human species, studies highlight that the early innovations infiltrated into the society and became recognized rather slowly (Atkins et al. 2002). It actually took time to recognize the fact that innovation was taking place. For instance, it took several centuries, for some of the transportation innovations, printing technology, and gunpowder utilization, to be recognized within the society and incorporated into the daily life operations (Atkins et al. 2002). It was noted that the incursion and approval of various technological applications started to pick up the pace with the cooperation and gradual collaboration of assorted industries, crafts, and science in the 19th century (Scott 2003). This partnership provided room for the early scientists to generate reproducible, practical technologies at an affordable fee for the businesses. Furthermore, it could now be proved that innovations could make work easier for the organization and, thus, gaining recognition and approval (Burke 2002). Basically, it is because of the collaboration between science and industries and crafts that innovation grew rapidly (Scott 2003). However, early organizational studies highlighted that despite the collaboration, businesses and science were still recognized as distinct entities (Thompson & Fulla 2001). Most scientific researchers actually worked as either independent entities, or as members of the organizations that focused on producing, marketing and developing innovations (Geroski, 2000). Furthermore, most of these innovations could not make it to the market. As time went towards the 20th century, most of the companies, particularly the communications, chemical and power companies, started establishing internal research, and development departments (Burke 2002). Moreover, such companies improved and marketed other companies’ innovations, thus bringing to end the barrier that exists between companies and innovation. Therefore, companies started governing the patents to fresh innovations, and this was no longer an individual activity. In addition, teams of organizational researchers became major innovators, thus moving away from the lone innovators (Wad Burke 2002). 9.0 Innovation and Competitiveness Nike+ FuelBand has been in direct competition with Basis Watch, Jawbone and Fitbit Flex. In several occasions the FuelBand has also been compared with many fitness trackers that have been in use by the athletes even those that are not wrist-based i.e. the rest of the Fitbit tracker group. Despite the fact that Jawbone comes in several colors, it has longer battery life that can go for ten days. This strong competitor of the Nike FuelBand tracks sleep and it gives a vibration feedback for inactivity. The FuelBand on the other hand has blue tooth connectivity, LED screen, and an improved web content entailing the proprietary NikeFuel. The other competitor is the BasisWatch which comes at a higher cost compared to the FuelBand. Recently, Nike FuelBand has launched an ultra-modern electronic wristband in a different component of Nike elastic journey which highlights the company’s strategy. FuelBand is the most modern in a series of several wearable that the company offers to its customers who wish to track out information that they can afterwards upload to the company’s business platform. Through the use of onboard microprocessor, ambient light sensor and accelerator Nike FuelBand is able to compute human activity according to the companies adverts. 10.0 Benefits of Nike FuelBand Innovation Previously, Nike has partnered with other companies for the last 15 years to provide heart monitors smart shoes and watches. The breakthrough moment fro the company came with a co-development project with Apple Company in 2005-06. This joint venture resulted with the creation of Nike-iPod and the iPhone app. It is at this point when the company realized both (http://nikeplusactive.nike.com and http://nikerunning.nike.com). The FuelBand has been the latest step in innovation that has risen in this powerful socially expandable strategy. The company has at several points put in place robust business platforms aiming at a growing business ecosystem that comprise of over 50 million clientele base globally. The company has also established universal connectors with companies like Apple Inc, TomTom, TechnoGym, Polar, Life Fitness, Cybex, Precor USA among other Nike proprietary devices such as Sensory Training Start Professional Athletes SPARQ. All the fore mentioned efforts have assisted in significant monetizing opportunities and diversified expansion for the company. 11.0 The future on Nike FuelBand NikeFuel provides a basis of comparison in different activities for the wearer enabling a new level of social networking and comparison. Each Nike FuelBand device increases the capabilities of the business platform and another option for growth. Further, new strategic option generates incentives for new partners to join Nike universal business ecosystem. With the expansion of the business platform, Nike is positioned to compel radical adjacencies probably in health diagnostics or health rehabilitation. At some point Nike could involve constantly on, prevention-oriented vision of health and medicine. Speculatively, the company is focused on exploring on an assortment of adjacencies with the current elastic strategy. Elasticity has turned to be the company’s DNA. Nike’s elastic strategy combined with strategic thinking boosts the company’s value: a combination of business platforms, business ecosystems, sensors, customers, devices, partners and radical adjacency. The combination of all this generates a powerful game plan and a very strong playbook for growth, competitiveness and innovation. 12.0 Conclusion There is a consensus among many researchers that innovation is essential for all organizations, whether small or big (Christensen, 2003). The contemporary competitive market demands call for an escalating customer value, which translates to the highest total cost, customer satisfaction, the lowest total cost, and speedy production a factor that has been heavily considered in the production of the Nike FuelBand. Furthermore, the future success of businesses globally will be attained by enhancing the operating efficiencies and driving down the costs (Smith & Munn 2006). This has been tackled by coming up with a wearable that can also assist in easing it advert through coming up with a consumer link strategy. The Fuel Band by itself is an integral part of advertisement and the fact that is connected to the social networks through makes it easy for Nike to assess the viability of it as a product. There Nike as a company strives to attain success and become leaders in the global arena, Meisinger (2007) observes that innovation and creativity have become the most significant practices in attaining this goal. Generally, research evidences that every organization has the ability to actually apply proper innovation to solve the daily challenges which they encounter (Christensen, 2003). Nike strategy has been very friendly for the vendor community and it is a progress into other invention categories. Via Nike+ FuelBand customers are able to attain personal development recommendations, coaching, games, how-to-videos, advice, social networking as well as, friendly competition among compatriots. They also get smart linkages to pertinent products that are available with Nike Vendor. 13.0 References Atkins, CR, Dykes, P, Hagerty, J & Hoye, J 2002, ‘How customer performance partnerships can sharpen your competitive edge’, The Journal for Quality and Participation, vol. 25. no. 3, p. 22. Christensen, CM (2003), The innovator's solution: creating and sustaining successful growth, Harvard Business Press, New York, pp. 123-127. Frambach, R. T. and N. Schillewaert (2002) Organizational Innovation Adoption: A Multilevel Framework of Determinants and Opportunities for Future Research, Journal of Business Research, 55 (2), 163-176. Hamel, G (2000), Leading the revolution. Harvard Business School Press, Boston. Howells, J (2005), The management of innovation and technology: the shaping of technology and institutions of the market economy, SAGE, New York. Geroski, P. A. (2000) Models of Technology Diffusion, Research Policy, 29 (4/5), 603- 625. Leana, C.R. and Barry, B. (2003) “Stability and Change as Simultaneous Experiences in Organizational Life”, Academy of Management Review, 25 (4), pp. 753-759. Meisinger, S 2007, ‘Creativity and innovation: key drivers for success’, HRMagazine: on human resource management, vol. 5, no. 5, p. 10. Scott, WR 2003, Organizations: rational, natural, and open systems, 5th edn, Prentice Hall, Upper Saddle River. Shapiro, SM 2002, 24/7 innovation: A blueprint for surviving and thriving in an age of change, McGraw Hill, New York. Smith, C & Munn, G 2000, How to maintain a competitive edge. PPI, vol. 42, no. 12, p. 19. Vernardakis, N 2006. Innovation and technology: business and economics approaches, Taylor & Francis Group, New York, pp. 211-216. Read More