Download - Lecture 8 industry studies student (1)
Industry Studies: Consumer Goods Industry
Topic: Innovation and Change in the Consumer Goods Industry
Topic Number:8
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Overview
Innovation and change play a fundamental role in an organisation’s ability to keep pace with a market, drive it forward and get ahead of the competition. In addition, it is important for firms operating in the CGI to innovate around process to reduce costs and become more socially conscious and effective.
In this lecture, we will learn all about how innovation and change is done in organisations operating in the CGI. We will initially look to understand what innovation is and the different kinds of innovation that firms can adopt. We will also look at emerging forms of innovation from emerging markets.
Thereafter, we will look at some of the challenges to making innovation and change happen in organisations and how we can overcome these. Finally, we will look at a number of different approaches to change management organisations can use.
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Learning Outcomes
• Determine and describe what innovation is in an organisation
• Articulate the different models of innovation used in the East and West
• Be able to discuss the challenges faced in implementing innovation and change
• Critically evaluate a number of change models to determine the optimal way to create change in organisations
InnovationMost of us understand that innovation is enormously important. It’s the only
insurance against irrelevance. It’s the only guarantee of long-term customer loyalty. It’s the
only strategy for out-performing a dismal economy.
Gary Hamel
Learning and innovation go hand in hand. The arrogance
of success is to think that what you did yesterday will be sufficient for tomorrow.
William Pollard
What is innovation?
What is innovation?
Innovation can be defined as the application of new
ideas to the products, processes, or other
aspects of the activities of a firm that lead to increased “value.”
This “value” is defined in a broad way to include
higher value added for the firm and also benefits to
consumers or other firms.
Characteristics of innovation
A key issue here is to distinguish innovation, the bringing to market of a truly novel item, from imitation, the
adoption of a new technique or design that is already in the market.
New to a firm
New to a domestic market
New to a world
market
Two types of innovation
Product Innovation Process Innovation
The introduction of a new product, or a significant qualitative change in an
existing product.
The introduction of a new process for making or delivering goods and
services.
Incremental Radical
• Extension of existing product
• Developed in response to a specific market need
• Customer pull
• New tech creates new market
• Market creating• Technology push
Radical vs Incremental Innovation
Substantial
Stages of Innovation
Where does this sit on the spectrum?
https://www.youtube.com/watch?v=dG0vLFFtZDs
https://www.youtube.com/watch?v=qDrMAzCHFUU#t=188
What is disruptive/radical innovation?
What is disruptive/radical innovation?
Lets consider some examples
But why is it important to innovate
“Our resilient brands will strengthen
their market positions and performance as they
comprehensively satisfy the preferences of our customers”.
“We are not changing directionwe will continue to move full-
steam ahead with our core business,
which is stores“
Chairman HMV, 2007 CEO Blockbuster, 2001
But why is it important to innovate?
How do Western firms innovate?
For example, Unilever’s R&D center network
R&D at the heart of a business
However, emerging markets are developing their own way of innovating
https://www.youtube.com/watch?v=hvMQKx-uBi0Watch from 1:50
At the heart of Jugaad
So picture this scenario
What is it?
Jugaad is a colloquial Hindi word that roughly translates as ‘‘an inno- vative fix; an improvised solution born from ingenuity and cleverness.’’ Jugaad is, quite simply, a unique way of thinking and acting in response to challenges; it is the gutsy art of spotting opportunities in the most adverse circumstances and resourcefully improvising solutions using simple means. Jugaad is about doing more with less.
The word jugaad is also applied to any use of an ingenious way to ‘‘game the system.’’ A missed
call here and there…
Jugaad Innovation
What is it?
https://www.youtube.com/watch?v=mrFyPaie3pQ
Jugaad Innovation
Seek opportunity in Adversity
Do More with Less
Think and Act Flexibly
Keep it simple
Include the margins
Follow your heart
The 6 key principles of Jugaad
Thinking Outside the (Ice) Box
WHAT IF your fridge can operate without electricity?
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The Innovator’s Dilemma
The Innovator’s Dilemma
https://www.youtube.com/watch?v=qDrMAzCHFUU
A vacation with Kodak Focused on women
Made it social Introduced the brownie
The case of Kodak
The incumbent
s curse
Core rigidities
Leadership and
culture
Strategic flux
Diversify into what exactly?
Cannibalisation
But along came digital; why couldn't they innovate?
High failure rates
…Think again…
How can you minimise failure? Market research…
Product and customer lifecycle
Change Management Approaches
S-Curve Paradox
Source: Handy (1994)
Change Management Approaches
Kotter’s Eight Steps
Source: http://www.kotterinternational.com/our-principles/changesteps)
Change Management Approaches
Congruence Model
Source: Nadler and Tushman (1988)
End of presentation
© Pearson College 2013