Global + Innovation = Globalisation

Economists define globalisation as “the increasing trade liberalisation between nations and the rising degree of openness of national economies which have occurred in the last decades” (Bräuninger, M. and Vöpel, H. 2009:185).

Globalisation involves a broadened outlook of the work with “free transfer of capital, goods, and services across national frontiers”. However, it has been argued that it “does not include unhindered movement of labour and, as suggested by some economists, may hurt smaller or fragile economies if applied indiscriminately” (Business Dictionary, Accessed 12/12/11).

We live in a society whereby globalisation has become the norm of world markets and economies; sharing and spreading knowledge and research. However, through competing and supplying on a global scale, businesses can achieve numerous economies of scale. Westland (2008:4) explains that economies of scale for production are achieved most where the production costs are at its lowest; causing a world’s production to migrate to that given country. “These shifts have brought about the rapid rise of the Chinese and Indian economies (among others) over the past decade” (Westland, J.C. 2008:4).

Due to the increasing competitive pressures facing businesses in the economic climate today, there is an escalating demand to become global. As a result, organisations’ corporate strategies are re-evaluated and changed as well as globalising its research and development function; gaining an insight into international markets. Globalisation has been driven by technology and communication which have, in turn, altered world powers and increased interdependency. Global issues such as climate, food and resources have also influenced the process of globalisation to some extent requiring businesses to export and work co-operatively with other countries. In a survey, executives viewed innovation as the crucial factor to remain competitive in today’s global business environment (The McKinsey Quarterly 2006 cited in Sara, T. and Jackson F.H 2010:1).

According to Sara and Jackson (2010:1), “Companies from developing countries are using innovative ideas and techniques to compete in the global marketplace” whereas “companies from developed countries are expanding their reach of innovations to a broader audience”. Many developing countries have emerged into the global competitive market. For example, China, as mentioned above, has had a global impact on the marketing environment. Their significant investment and funding for innovation resulted from:

• Rising spending on research and development: since 1999, China is now the world’s second highest R&D investor after the US.
• More patents and scientific output: invention patent applications have increased by 23% annually since 2000.
• More multinational R&D centres: the Chinese government estimates that 750 global companies now have research centers in China, including Microsoft, Intel, Vodafone, Unilever and AstraZeneca.
• The growing graduate pool: Beijing’s university district alone has as many engineers as all of Western Europe and the government is cultivating its high-technology champions.

(Strategic Direction, 2007:32)

As explained by Tidd et al, “global firms now rely hardly at all on their home – or any other one – country for their operations, since they compete and increasingly produce in global markets” (1997:75). However, Porter and Nelson claim that conditions existing in their home countries highly influence their technological strategies because “even global firms draw mainly on mainly one – or perhaps two – countries for their strategic skills and expertise in formulating and executing their innovation strategies” (cited in Tidd et al.1997:75). Statistics have found that “10% of the innovative activities of the world’s largest 500, technologically active firms were located outside their home countries in the 1980s, compared to about 25% of their production and much larger of sales” (cited in Tidd et al.1997:75).

Sara and Jackson (2010:4) express the concern that “In many cases the executives of global companies from the developed countries are so focused on their traditional competitors that they do not recognise the threat developing from rivals coming out of emerging markets”. Ideally, the UK and European Union should take note from these industries to prepare themselves for a world of global innovation networks whereby “ideas and technologies will come from many more places (Strategic Direction, 2007:34). Emphasis has been specifically placed on the need to “invest more in science and innovation, and make international collaboration more central to their way of working” (Strategic Direction, 2007:34).

References

Bräuninger, M. & Vöpel, H. (2009) Globalisation, Trade, and Growth: A Macroeconomic Perspective', Intereconomics, Vol. 44 Iss.3 p185-192, Available from Business Source Complete at: http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=5c01ffb6-ec1b-4484-a915-081c3857830f%40sessionmgr112&vid=7&hid=110, [Accessed 11^th December 2011]

Business Dictionary [online], Available from: http://www.businessdictionary.com/definition/globalization.html, (Accessed 12^th December 2011)

Sara, T. and Jackson, F.H (2010) Emerging markets and innovation: A partnership for global progress, Business & Economic Horizons, Vol. 2 Iss. 2 p1-6, July 2010, Available from Business Source Complete at: http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=e683f668-d01d-4c05-b390-98c26f156d5e%40sessionmgr110&vid=2&hid=127, [Accessed 11^th December 2011]

Strategic Direction (2007) The new world of innovation; Innovation is going global, Strategic Direction, Vol. 23 Iss 9 p32-35, Available from Abi-Inform at: http://proquest.umi.com/pqdweb?index=0&sid=1&srchmode=1&vinst=PROD&fmt=6&startpage=-1&clientid=57096&vname=PQD&RQT=309&did=1360295591&scaling=FULL&ts=1323614138&vtype=PQD&rqt=309&TS=1323614201&clientId=57096, [Accessed 11^th December 2011]

Tidd, J., Bessant, J. and Pavitt, K. (1997) Managing Innovation; Integrating Technological, Market and Organizational Change, Chichester: John Wiley & Sons Ltd.

Westland, J.C (2008) Global Innovation Management; A Strategic Approach, Hampshire: Palgrave Macmillan 

Supply Chain Management & Innovation

A supply chain can range from “basic commodities to selling the final product to the end-consumer, to recycling the use product” (Harrison, A. and Hoek, R.V 2011:6). Managing supply chains is an essential element of all organisations for producing and marketing goods and services, have a vital influence on the economy. Although managing such business systems can pose many challenges, innovation can significantly improve effectiveness and efficiency such as reducing CO2 emissions. They are critical to environmental change, enabling sustainability and heavily impact daily lives.

According to Hughes (2010:318), the aim of supply chain management is to “effectively reduce the inventory of an organisation”. Managing such processes can enable greater integration and result in improved profitability, productivity and achieving competitive advantage. Thorough and effective implementation is critical to its success; otherwise inventory related problems are likely to occur and although supply chain management is not as apparent as other organisational changes, it is still significant (Hughes 2010:319). Technological advances permit organisations to create more sophisticated supply management systems in a more effective and efficient way.

Supply chain management at Coca Cola involves “planning and controlling all of the processes from raw material production to purchase by the end-user to recycling of the used cans” (Harrison, A. and Hoek, R.V 2011:7). Planning needs to be co-ordinated to guarantee that customer needs are adequately met.

Supply chain management at Toyota

The car manufacturer, Toyota, is well known for its Toyota Production System (TPS) which formed the basis of its significant global success. Toyota developed this system to improve quality and productivity by eliminating waste and respecting people. It generated the idea of lean manufacturing and supply chain practices and concepts are now used throughout many business areas. Toyota has become a benchmark for many companies as an effective eliminator of waste through its well adapted systems such as TPS.

Steven Spears and H. Kent Bowen, two researchers, have devised four rules that have formed the foundation of Toyota’s thinking (Financial Times [online], 2011):

1. Structure every activity
2. Clearly connect every customer /supplier
3. Specify and simplify every flow
4. Improve through experimentation at the lowest level possible towards the ideal state

Over several generations, Toyota has invented and led the development and implementation of many innovative supply chain processes. Their first idea was ‘Jikoda’ in 1902; “allowing one worker to support 12 machines instead of just one dramatically dropping the cost of weaving” (Financial Times [online], 2011). The company’s success has been due to the successful applications of processes such as just-in-time, kanban and quality circles amongst many others.

Lean management; an innovative process

Lean management is a highly effective supply chain method to manage a business at all levels and presents employees with “the skills and a shared way of thinking to systematically drive out waste through designing and improving work of activities, connections, and flows” (Financial Times [online], 2011). Many organisations have succeeded using such systems through “minimal inventories of raw materials, work-in-process, and finished goods” incorporating aspects of just-in-time delivery (Jacobs, F.R et al 2009:404). To be a success, lean production systems require “high levels of quality at each stage of the process, strong vendor relations, and a fairly predictable demand for the end product” (Jacobs, F.R et al 2009:404).

References

Financial Times (2011) [online] Lean management like Toyota Production System spells inclusive growth, The Economic Times (Online), October 24, Available from Abi-Inform at http://proquest.umi.com/pqdweb?index=5&did=2492509751&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1323621126&clientId=57096, [Accessed 11^th December 2011]

Harrison, A. and Hoek, R.V (2011) Logistics Management and Strategy; Competing Through the Supply Chain, 4^th Edition, Essex: Pearson Education Limited

Hughes, M. (2010) Managing Change; A Critical Perspective, 2^nd Edition, London: Chartered Institute of Personnel and Development

Jacobs, F.R, Chase, R.B and Aquilano, N.J (2009) Operations and Supply Management, 12^th Edition, New York: McGraw Hill/Irwin

Behind the Scenes; The Young Apprentice

As mentioned earlier in the blog, I personally know Hayley Forrester who featured on the Young Apprentice until Week 6; the discount buying task. I took this opportunity to interview her regarding her experiences and thoughts about innovation and creativity. In her final episode, Lord Sugar explained: “I think I’ve concluded that, Hayley, you seem to be a person that stays in the shadow, you’re politeness is great and I know that your enthusiastic, but at this point in this competitive environment that we have here, Hayley… You’re Fired”. As she was driven away, Hayley said: “I feel Lord Sugar’s made a mistake in firing me, I wasn’t aggressive enough in the boardroom but then that’s not how I am as a person so I’m not going to be like that in the boardroom”. Certain questions couldn't be answered due to the signing of a confidentiality agreement at the beginning of the series, however, these questions are indicated.

Describe your overall experience of the Young Apprentice.
I found my experience on Young Apprentice very enjoyable, but hard working; which is obviously to be expected of the business world. I believe that it has finalised my plans of entering either the financial or business world.

What did you find most rewarding and challenging about working in a team?

I found the most challenging part of working in a team is that everyone wants their ideas to be listened to. I found the most rewarding part of working in a team that you have more ideas, which is very helpful.

How did you feel as Project Manager in Week 1?
I can’t answer this question sorry.

Do you prefer being the manager or a group member?
In business in general, I would say that I prefer to be the leader.

Do you consider yourself to be a team player or someone that prefers to work alone?
At times I prefer to work alone, however, I also believe that I am and can be a strong team player.

Did you, at any point, feel discouraged to share your ideas when under management of Zara, for example, who dominated the situation and pursued her own ideas disregarding those of others?
Sorry, I can’t answer this question.

Do you think that having a diverse, wide range of people in a group can aid creativity and innovative ideas?
I definitely believe that having a diverse range of people, will all have different views and ideas that can help bring practical, creative and innovative ideas.

To what extent do you believe management and leadership styles affects the innovation and creativity of other members?
I think that the manager has some control over the creativity and innovation of ideas, but only a small amount. I think that under the right supervision people will bring their own natural ideas.

Do you think individuals can feel reluctant to share their ideas because other people take credit for them when they are successful? How can this affect the team?
I think that people shouldn’t feel that they can’t take credit for an idea that is theirs.

What have you learnt from your appearance on the show?
I have learnt that business is definitely the profession I want to enter.

What would you consider the best way to ensure a group comes up with the most creative ideas?
I think that for a group to come up with the most creative ideas they must be confident in themselves.

In your final episode, Sir Lord Sugar said you were an enthusiastic and very polite individual but in the shadows and need to assert yourself more due to the competitive environment. What are your views on this? Do you agree?
I’m afraid I can’t answer this question.

What do you believe by the term ‘innovation’? Do you believe you are innovative?
I believe that innovation means that a person thinks 'outside the box' but still has profitability and the target market in account at all times.

Do you think creativity can be learnt or is it a natural gift?
I think that some creativity is natural, but I definitely believe that it can be enhanced.

Conclusion

Overall, it is evident that working in a team brings many challenges such as the willingness of each member to but their ideas forward; not always being listened to. This can hinder future participation, morale and motivation. Hayley believes “that the manager has some control over the creativity and innovation of ideas, but only a small amount. I think that under the right supervision people will bring their own natural ideas”. However, a leader’s management style can severely affect the degree of autonomy and scope of creativity for individuals.

The Young Apprentice; An Overview

The 12^th December marked the end of yet another series of The Young Apprentice. The twelve young, enthusiastic teenagers have been on an educational journey where they were required to work as a team but shine as individuals; some more successful than others. They were set various tasks to test their business knowledge, skills and teamwork. Team names were Atomic and Kinetic and remained Boys Vs. Girls for the first two weeks until Lord Sugar mixed up for the remainder of the series. Below is an overview of the series outlining the task, happenings during the task and the results.

Week 1: Frozen Treats

Task: Produce own range of frozen treats to sell to public

Teams: Boys (Atomic) Vs Girls (Kinetic)

Managers: Harry H (Atomic), Hayley (Kinetic)

Products:

Atomic: Cookie and marshmallow ice cream and apple and watermelon sorbet (‘Shiverrrr me Timbers’ pirate theme), very low prices

Kinetic: Healthy ‘Treat and Trim’ theme with strawberry and marshmallow, chocolate and banana and mango and vanilla flavours, very high prices

Results:

Atomic: Costs £117.92, Sales £677.17 = £559.25 profit

Kinetic: Costs £131.00, Sales £839.34 = £708.34 profit

Fired: Mahamad (only sold £62’s worth)

Week 2: Parent & baby

Task: Create a new and exciting product for the parent and baby market and pitch to 3 retailers (same teams as last week)

Managers: Lewis (Atomic), Gbemi (Kinetic)

Products:

Atomic: ‘Harris the Hippo’ toy bottle warmer

Kinetic: ‘Comfy Curve’ cradling cushion armstrap

Results:

Atomic 1,200 units from JoJo Maman Bébé, 0 orders from John Lewis and 4,000 units from Mothercare = 5,200 units

Kinetic: 0 from JoJo Maman Bébé or John Lewis, but 7,000 units from Mothercare = 7,000 units

Fired: Ben (no inspirational ideas and failed to put himself forward)

Week 3: Floristry business

Task: Make arrangements within 2 days to sell to the public and pitch to three pre-arranged corporate clients who would then choose either Atomic or Kinetic (5 star hotel, West End theatre and an exclusive hair salon)

Managers: Hannah (Atomic), Lizzie (Kinetic)

Clients:

Atomic: 4 bouquets for Theatre and 4 window displays for Hair Salon

Kinetic: 5 posies and mantelpiece display for Hotel

Selling:

Atomic: Bouquets at £3,£6 and £10 (depending on size)

Kinetic: Triple pricing strategy (put forward by Hayley)

Results:

Atomic:  Sales £858.25, Costs £407.29 = £450.96 profit

Kinetic:  Sales £912.10, Costs £448.58 = £463.52 profit 

Fired: Hannah (brought the wrong people into the Boardroom)

Week 4: Over 50’s market

Task: Choose 2 products from 8 suppliers to sell at Kensington Olympia’s over 50’s show

Managers: Haya (Atomic), James (Kinetic)

Products: Atomic chose pie maker and bird box whilst Kinetic chose shopping trolley and mini vacuum

Results:

Atomic: Pie maker £347.42, Bird box £500.00 = £847.42

Kinetic: Shopping Trolley = £329.98, Mini Vacuum = 808.79 = £1138.77

Fired: Lewis (Lord Sugar admired his enthusiasm but told to talk less)

Week 5 - Deodorant

Task: Design, package, brand and create an advert for an anti-perspirant deodorant for teenagers then pitch infront of industry experts

Managers: Zara (Atomic), Harry M (Kinetic)

Products:

Atomic: RAW, male market, filmed street dancer doing routine in sports hall for advert. Harry H pitched

Kinetic: Vanity, female market, filmed teenagers and geek in basement club, Lizzie pitched

Results:

Atomic: Very good advert, one of the best in the boardroom

Kinetic: Good concept but their execution failed and the product wasn’t associated with the advert

Fired: Gbemi (poor product design despite this being her main hobby)

Week 6 – Discount buying

Task: 10 hours to find and buy 10 items on the list for Madame Tussauds (items ranged from a Justin Bieber 34” sized suit to a Dashiki for Nelson Mandela). Teams told they would receive penalties for not getting items (£50 plus guiding price) or not negotiating lower price.

Managers: Lizzie (Atomic), Haya (Kinetic)

What happened:

Atomic: Spent hours making phone calls locating some items, didn’t find them all, items more expensive than Kinetic’s

Kinetic: Set off straight away (no strategy), used Haya’s knowledge of London, constantly looking out for possible locations

Results:

Atomic: 6 items bought, Costs: £963 Fines: £517.87 = £1480.87 total costs

Kinetic: 7 times bought, Costs: £721 Fines: £248.10 = £969.10 total costs

Fired: Hayley (very polite and enthusiastic but often stays in the shadows)

Week 7 - Popcorn

Task: Develop some unique flavours of popcorn to pitch to 3 retailers (Jet2, Odeon and Morrisons)

Managers: Harry H (Atomic), James (Kinetic)

Products:

Atomic: Mediterranean themed (La Popcorn) – Chorizo and tomato, feta cheese and olive

Kinetic: American themed (Empire State) – BBQ chicken, maple syrup and pancakes

Results:

Atomic: 10,000 from Odeon, 50,000 from Jet2 and 30,000 from Morrisons = 90,000 units

Kinetic: 15,000 from Odeon, 0 from Jet2, 100,000 from Morrisons = 115,000 units

Fired:

Team Atomic (Harry M, Harry H and Lizzie)

Haya from Kinetic (not seen any creativity but told she shouldn’t give up because she has great attributes)

Week 8 – Video Game (The Final)

Task: Create a new online video came with a viral Internet advert and pitch to professionals in gaming and online (ranging from Facebook to Disney) and Lord Sugar himself. Previous candidates from the series returned; Lewis, Harry H, Hayley, Lizzie and Hannah join James while Ben, Mahamed, Harry M, Gbemi and Haya lend their support to Zara.

Products:

Zara: After many ideas were developed, Zara decided on ‘Piggy Panic’ – players are required to help Porky Pete from the butcher

James: Market research showed that the public would prefer their puzzle game but James took a risk and decided on ‘Crazy Cabinet’ – a time management game whereby the player plays the role of Prime Minister

Pitches:

James: Game relates to current affairs; concerns about running the country and everyone says they can do a better job. His spoof advert amused the audience and was seen as a great concept and “witty” game with clear scope to expand to keep the game current. He clearly understood the target market with a comical advert that was offensive to some degree; suited to its audience.

Zara: Clearly very passionate and enthusiastic about her product and also managed to amuse the audience with her game demo and viral ad. A game with “lots of potential”.

The Boardroom:

James: Told his advert didn’t correlate with the game

Zara: Informed her pitch was impressive, game not got the migration of James’ but clear development of characters in books, for example, and her advert engaged more with the game

The £25,000 prize:

Zara explained she would invest in professional filming equipment and sell productions. James, on the other hand, wishes to study Economics further before producing, developing and selling an idea that he develops. The winner receives the prize to build their future but once when Lord Sugar approves its use.

Hired: Zara

Conclusion

Overall, it was clear to study the group dynamics and the effect this has on motivation, creativity and innovation. All tasks were designed to test candidates’ abilities in many business areas including creativity and the ability to be resourceful. During Week 5’s deodorant task, members in Kinetic explained they found Harry a very difficult individual to work with and wasn’t creative enough which was critical because creativity in this area was essential to succeed; hence why this team lost the task. Also during this task, conflicts arose in Atomic whereby Zara’s dominant leadership style led to her disregarding Hayley’s thoughts and ideas. This can cause high demotivation in the business world and discourage future co-operation.

Meeting at Madame Tussaud’s for the task of Week 6 illustrated the importance of keeping up to date. This business has been in existence for over 200 years creating waxworks of famous people making it essential to keep up to date to ensure every detail is correct and accurate. This means that items need to be constantly replaced.

Throughout the series, it was apparent that candidates take credit for others’ decisions when they are successful. For example, in Week 6, Zara took credit for Harry M’s idea to contact a library to look up ‘Dashiki’ in a dictionary because Internet usage was forbidden throughout the task. The series also highlighted the importance of communication and the impact this has on motivation and the ability to be creative within a group. Harry M, for example, has consistently been told he is good at selling and negotiating but rarely listens to others and pursues his own ideas.

Each week, Lord Sugar provided feedback to the candidates; highlighting any strengths and weaknesses they may have. This enabled the individuals to learn from their mistakes; a concept relevant to innovation whereby businesses can learn from their own and competitors’ errors when bringing innovations into the market.

In Week 7, it was clear to the candidates that they had to work as a team to have a chance of winning both as a group and individually as the losing team were all fired in addition to one member from the winning team. Communication and teamwork was essential. Haya was one of the four fired from this episode but reflected on the importance that it’s ok to take risks; a critical aspect in innovation.

During the final series, Zara expressed she was a “naturally creative person” and is a highly determined individual who is always willing to put ideas forward, take risks and experiment; trying out lots of different ideas. However, this means that she doesn’t always consider the views, opinions and ideas expressed by others; wanting to steer from the back when not the leader. James also developed the ability to become a risk taker, put his neck on the line and pursue ideas but listen to others managing to understand how to work within a team and get the best out of each member.

References:

The Young Apprentice (2011) [TV Broadcast] BBC1, Every Monday, Week commencing 24^th October. 21:00 hrs

Marketing; Its role

There’s no doubt that marketing plays an important part; either as an innovative advertising campaign in itself or emphasising a company’s innovative products and/or services. As defined by Jobber, the marketing concept is “the achievement of corporate goals through meeting and exceeding customer needs better than the competition” (2007:1001). “Management must think of itself not as producing products, but as providing customer-creating value satisfactions” (Levitt, T. cited in Jobber, D. 2007:3).

Marketing campaigns aim to interest and engage potential and existing customers to cause them to want to watch the advert again; maintaining a company’s stakes and messages that it wants to portray. The important element of marketing is that a business can always improve its stakes and image; making innovative marketing a critical aspect.

As explained by Virgin Atlantic’s Sales and Marketing Director at a University talk, the company’s £10 million global marketing campaign in the UK was designed to build the airline’s brand presence on a global scale and was used to significantly increase demand for its services. The strapline "Your airline’s either got it or it hasn't" was created following their 25th birthday campaign last year “Still Red Hot” which was one of the top ten marketing moments of 2009 by Campaign Magazine. Many people describe travelling with Virgin as being special and different; as illustrated by their marketing campaign that gives them a competitive edge. In January/February 2011, Virgin Atlantic spent £1,869,222 on advertising their brand on TV and their return was £23.46 per £1 spent! A media plan needs to be efficient, productive and incorporate an awareness of budgeting which has clearly been, and is, successfully implemented by this company in particular.

Product Life Cycle & Innovative Marketing

The product life cycle is “a four-stage cycle in the life of a product illustrated as sales and profit curves” (Jobber, D. 2007:1002). These stages include: introduction, growth, maturity and decline. As well as products, adverts also have a lifespan making it vital to create innovative marketing campaigns that are more powerful each time; therefore a continual process. This could be achieved by extending campaigns outdoors by incorporating a snapshot from an advert; using photography to amplify a company’s assets and products. Due to the shortening of the product life cycle, marketing is crucial to implement extension strategies or to remind consumers that certain products still exist.

Innovative marketing requires companies to “continuously seek real product and marketing improvements” (Kotler, P. and Armstrong, G. 2006:639) and doesn’t overlook ways to improve its processes as this can consequently lead to customers using another company who has found a much better way.

In 1996, Samsung attempted to overtake Sony by releasing a wide variety of new, stylish and innovative products which were designed by a newly recruited group of designers. Their new product range was supported by a $400 million marketing campaign. The company is now well established in today’s market focusing on high-end and cutting edge technologies.

Another example of an innovative marketer is Colgate-Palmolive. According to Kotler, P. and Armstrong, G. (2003:615), “new products contribute 35% of Colgate’s revenues”.  It launched an extensive range of toothpastes that were highly successful amongst consumers. This was achieved through extensive market research allowing them to gain information regarding shifts in demographics and concerns. Today’s society has become more health-conscious due to the mass media reflecting on health issues throughout the UK and worldwide. Therefore, Colgate Total was released amongst many other products to provide customers with a variety of benefits. It reinforced its products through numerous innovative marketing programmes including health magazines which effectively targeted those members of the public who are well educated and are focussed on maintaining their health to avoid becoming another statistic. As a result, Colgate Palmolive became market leader “for the first time since 1962, with a 32% share versus Procter and Gamble’s 25%” (Kotler, P. and Armstrong, G. 2003:615).

Despite the shortening of the product life cycle as mentioned above, it is important for an organisation to not rush its product development to the extent whereby its quality can be severely affected (Kotler, P. and Armstrong, G. 2006:289). This is the risk some companies have to take to gain their competitive edge but through superfast product development, care must be taken to ensure products are developed at speed but whilst maintaining quality and improving previous/existing products. Kotler and Armstrong (2006:275) suggest that “more than 90% of all new products fail within 2 years”. This can be explained by a variety of factors; overestimated market size, actual product needed improving, incorrect positioning, too highly priced or advertised poorly.

Target marketing is significant in order to attract the right people at the right time; requiring careful consideration and thorough implementation. Masterston and Pickton (2004:110) define target marketing as “making decisions about which part of the market an organisation wishes to focus on”. From deciding this, strategies can be drawn up to communicate to the market segment(s) in the most effective and efficient way. Once a segment has been identified by a business, a product positioning strategy is developed. Through the design of the product, marketing mix and campaigns used this provides the basis of consumers’ perceptions to position the company into a given place Lancaster, G. and Massingham, L. 1999:191). Strategies such as micro-targetting can be used whereby the routes that certain people take can be researched and advertised accordingly. For example, posters can be displayed at particular Underground station exists to convert a potential customer into an actual customer.

Porter’s Five Forces

Porter’s well known Five Forces model (1980) allows organisations to assess and analyse the competitive strength and position of rival businesses. This model has been a valuable asset to managers since it was devised providing knowledge of the driving forces facing any corporation (McDonald et al 2000:132). Porter’s analysis becomes particularly useful for those organisations considering entry into a new market and therefore require an overview of current businesses.

Porter’s five forces are described by Masterton and Pickton (2004:77-79):

• Threat of new entrants i.e potential competitors
• Threat of substitutes; many alternative products and services can challenge competitive advantage
• Bargaining power of customers; very powerful if more important to suppliers than suppliers are to them
• Bargaining power of suppliers; if, for example, resources are scarce, suppliers can dictate the terms
• Inter-rivalry of competitors; highly competitive industries can encounter price wars etc.

This model can be used for analytical purposes as well as a SWOT and PEST analysis. A PEST analysis most commonly measures a market whereas a SWOT analysis measures a business unit, proposition or idea.

SWOT analysis aids the decision-making process for a variety of business situations. It is an acronym for Strengths, Weaknesses, Opportunities and Threats. It can help review an organisation’s strategy, position and direction allowing a business to achieve a ‘strategic fit’ between itself and the environment (Lancaster, G. and Massingham, L. 1999:82). SWOT relates external opportunities and threats with the internal strengths and weaknesses held by the organisation.

PEST is also another useful model allowing consideration of market growth/decline, position, potential and direction. It is an acronym for Political, Economic, Social and Technological factors. It also considers the Legal and Environmental forces a business may face in the marketing environment (Masterton and Pickton 2004:61).

References:

Jobber, D.  (2007) Principles and Practice of Marketing, 5^th Edition, Berkshire: McGraw-Hill Education

Kotler, P. and Armstrong, G. (2003) Marketing; An Introduction, 6^th Edition, New Jersey: Pearson Education Ltd.

Kotler, P. and Armstrong, G. (2006) Principles of Marketing, 11^th Edition, New Jersey: Pearson Education Ltd.

Lancaster, G. and Massingham, L. (1999), Essentials of Marketing; Text and Cases, 3^rd Edition, Berkshire: McGraw-Hill Education

Masterson, R. and Pickton, D. (2004) Marketing; An Introduction, Berkshire: McGraw-Hill Education

McDonald, M, Rogers, B. and Woodburn, D. (2000) Key Customers; How To Manage Them Profitably, Oxford: Butterworth-Heinemann

Innovative or Inappropriate?

Here are some products that I believe are ‘Innovative’, ‘On the fence’ or ‘Inappropriate/Unsuccessful’. Every business experiences success and failure but do some bring out new editions just to keep its face in the picture and keep up with its competitors? Are businesses rushing their inventions to maintain their market share? No-one likes an unhappy customer!

IBM; Innovative

A University talk by two IBM placement students gave an insight into the works and wonders of the business amongst its many innovative products. IBM (International Business Management) are one of the world’s largest IT and consultancy services and was founded back in the early 19^th Century evolving from a small business to one employing more than 400,000 people. Previously, they concentrated on manufacturing but more recently have adopted a consultancy approach; providing innovative solutions to business problems in a variety of industries.

Innovations

• In 1969, IBM developed NASA technology which enabled man to land on the moon
• The self-service kiosk was brought to market by IBM in 1970
• The calculator
• IBM invented the Universal Product Code (barcodes) over 40 years ago
• Over 30 years ago, they lead the way in innovation; bringing personal computing to life
• They created the processor chips that power Wii’s, Xbox 360’s and Playstations
• In 2000, they launched ‘SMS for Life’ which allows health workers in developing countries to order malaria medicine via text message so that stocks are always in supply
• In 2010, they introduced a Wimbledon Championship application for iPhones and Android devices which was downloaded by over 880,000 to watch live video feeds by pointing their phone in the direction of the court they wanted to see

Amongst many more from analytics to water, IBM are clearly a highly innovative business despite being ranked 29 on the 2011 50 Most Innovative Companies although 4^th on the 50 Most Innovative Companies list by Bloomberg in 2010.

Graze; Innovative

Ever heard of Graze? Perhaps not. They are a fairly recent established business who specialise in delivering personalised healthy snack boxes straight to your desk via post. With the continuing concerns in society about obesity, healthy eating businesses are thriving. To receive their products, all you have to do is follow the simple steps on their website;

1. Choose your box and how often you’d like to receive it
2. View their products and rate whether you like, love or would like to try them
3. They hand pick your box based on your ratings
4. Box delivered first class

Each box contains four punnets of healthy snacks and contains a personalised nutrition guide explaining your snacks and the nutritional information. It costs £3.49 including delivery but if you’re a new customer, the first box is just £1.74. Deliveries can be cancelled at any time, there’s no commitment.

The healthy snack boxes are a good provider of energy, can help you lose weight, boost your immunity, provide you with a varied and balanced diet, keep with the 80/20 rule (be good 80% of the time and give yourself a treat) and maintain your blood sugar at a healthy level. I received one of their punnets as a trial run and was very impressed, so try it yourself!

Apple; On the fence

There’s no doubt that Apple’s technology has transformed our lives and the world of technology so you may be wondering why Apple are, as we could say, ‘on the fence’ in this discussion. Apple are always bringing out new editions with even more applications and improved features..so we’d like to think. Many have argued how quickly the iPhone’s battery needs charging even when all open applications have been closed. Despite this, many still queued up for hours outside their local store for the release of the newest version on 14^th October; the iPhone 4S. Reportedly, 4 million handsets were sold in the first three days of release.

According to a BBC News article, “people claimed that their phone battery was draining by up to 15% every hour, even when the handset was not being used”. Apple have said that they have found a “few bugs” in the company’s latest mobile operating system (iOS 5) which is affecting the battery life of the device. With thousands of customers complaining about poor battery life on the company’s forums, something had to be done quickly if they were to keep their customers loyal, satisfied and with the brand. Within a few weeks, software updates were sent out to all handsets However, more concerning, some Apple customers are disappointed with their new iPhone as it “offered no radical changes” from the previous edition apart from its voice-control functions.

Could Apple be trying too hard to get out its new models? Is the competition from Google and Samsung affecting their performance? According to the research firm, Strategy Analytics, “in the third quarter of this year Samsung overtook Apple with 27.8m smartphone shipped compared to 17.1m iPhones" (BBC News, Accessed  26/11/11).

Nurofen; Unsuccessful

Nurofen is a well known brand selling over the counter painkillers. They are constantly innovating; finding new and improved ways to target pain relief to reduce discomfort of its consumers at an increased speed. However, one of its recent products (Nurofen Plus) was recalled over the Summer of 2011 after Seroquel XL 50mg (a harmful antipsychotic drug) was found in their products. This was found to be the case with 3 batches in South London despite the anti-psychotic drugs being manufactured by a different company. Pharmacy staff are now asked to double check the painkillers before selling to customers. However, although a manufacturing error isn’t being held responsible for this mix-up and that sabotage was possible, customer loyalty has severely been affected as trust is no longer in the equation and severe impacts on trust (Metro, Accessed 16/11/11).

From speaking to one of my sixth-form teachers, a student had taken one of these pills and was very ill as a result during a trip to Barcelona on a 30 hour coach journey; not a great situation to be caught up in.

Xbox; Unsuccessful

Microsoft’s Xbox 360 hasn’t been all successful. Game users have experienced many problems. In Summer 2008, approximately $1 billion was spent by the company on repairs as problems occurred due to the chips within the game station. Rumour states that this was due to Microsoft using cheap chips in the device. This was then followed by smoking race wheels due to overheating (CyberNet News, Accessed 26/11/11).

What the future has in store…

One of the biggest industries where innovations occur is, no doubt, science and technology. Things that we could only imagine are slowly becoming our reality with the high advancements in technology enabling innovations to come to life.

According to the BBC technology website, such innovations include:

• Growing your own burger (without meat)
• Controlling objects through thought processes
• Rewriting human genes
• Human-like robots to undertake everyday chores
• A gadget called a biofuel cell which uses glucose and oxygen at concentrations found in the body to generate electricity
• Using Abalone (a sea snail) shells for the future of manufacturing, green energy, medicine and science

Is science going too far or is this something we should expect?

References:

BBC News [online], Available from: http://www.bbc.co.uk/news/technology-15570462, Apple acts on iPhone battery bug, blames iOS 5, (Accessed 26^th November 2011)

BBC News [online], Available from: http://www.bbc.co.uk/news/technology-14803871, (Accessed 26^th November 2011)

CyberNet News [online], Available from: http://cybernetnews.com/xbox-360-wheel-recall-due-to-overheating/, (Accessed 26^th November 2011)

Metro [online], Available from: http://www.metro.co.uk/news/873545-nurofen-plus-containing-antipsychotic-drugs-isnt-manufacturing-error, (Accessed 16^th November 2011)