Tip 4. Look for developments in Technology

Innovation will start with someone who has thought of a idea that is then transformed into a  suitable and practical product or service to be sold to consumers. To stand out from the competitors, technology development is key to give a company an advantage with a new idea. 

The starting point for innovation will be the research of the product they want to develop and then applying this to develop the new product they will eventually make and sell. The more research the more effective and economic the product will be and will increase the likely success of it in the market that they sell to.

A company could use the linear  model of Technology-push 

This model reinforces the idea that the more research and development you do on a product the more sales of a product you will have through innovation. If you just develop a product because you want to use new technology then customers will not always know what the product is for and will not buy it. It is important to put research and marketing together with technology so customers get a product they need and feel good about buying it.

‘A technology push implies that a new invention is pushed through research and development, production and sales functions onto the market without proper consideration of whether or not it satisfies a user need’ (Martin, 1994, p43).

 

Successful companies such as BP Castrol (engine oil) division use the idea of putting new technology and customer needs together to have constant innovation focusing on technical input to make them stand out from competitors. 

"Teams of chemists at our laboratories and technology centre in Pangbourne,
UK, work continuously to identify, screen and bench-test potential base
fluids and additives, closely analysing their properties to ensure that each
provides the required performance characteristics."

This company uses constant research on the ongoing materials they use to try and develop these to test if they are up to the required performance they should. They want to meet the highest technical ability they can to keep customers happy and  may find an improved fluid that could benifit them. 

In my view it is very important to make sure that new technology is used to give customers something that they can see a use for. Customers will buy products to solve a problem that they have, they need to understand how new technology will meet their needs.

References

Innovation. (n.d.). Retrieved 1 19, 2012, from Castrol: http://www.castrol.com/castrol/sectiongenericarticle.do?categoryId=9028788&contentId=7052624

Tip. 3 Keep close to your customers and keep them happy

Supermarkets can be very successful at keeping close to their customers.

Tesco’s is a good example of this as they have their own Reward club cards which give their customers points depending on how much they spend. With these points you can then get gifts or pay with items from these points. They brought this out in 1995 and ever since has become the world’s most successful retail loyalty scheme.

“Just to give you an indication of the sheer size of the database Tesco tracks the shopping habits of up to 13 million British families and have done so for more than a decade.” 
(Fletcher, 2008)

To achieve such shockingly high figures Tesco’s must be doing something right for this many people to hand over their information to have a club card at this supermarket.

The information on these cards is useful to Tesco’s as it will show customers buying patters. This could be for a certain age groups or gender which could be useful to be able to send information to these customers with new products that are similar to products they regularly purchase.

"The success of the Clubcard - and the insight it has given Tesco into its customers' spending habits - has been widely cited as one of the major reasons for the retailer's huge success over the past decade."

(Fletcher, 2008)

Reward is a positive experience for customers too "The strategy is simple: Give high-paying customers an incentive, and they'll come back and buy more."  (Krotz) is the advice that Microsoft gives the businesses. There is no doubt that rewarding customers and building their loyalty can help make innovation successful by providing a ready market for new products and services.

References 

Fletcher, R. (2008, June 16). Tesco Clubcard founder prospers abroad. Retrieved January 19, 2012, from The Telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/2791717/Tesco-Clubcard-founder-prospers-abroad.html

Krotz, J. L. (n.d.). Reward your best customers. Retrieved January 19, 2012, from Microsoft Business: http://www.microsoft.com/business/en-us/resources/marketing/customer-service-acquisition/reward-your-best-customers.aspx?fbid=hq3p0A4VS-j

McDonald's - Change is necessary

McDonald's is one of the biggest globalised  restraurant chains and even companies like this can be restistant to change. To be successful though a company needs to change to grow and develop to what is popular in society at the time. Health is a big issue and there is a growing concern for obesity. 

 McDonald's has had to respond to this and have done so by adding nutrition information on their food to menus and packaging. This is a big risk as people may be put off the food but this had to be done to respond to the concern of McDonald's. Rumours about how bad for you their food is are often heard and this could help them to reinforce it is not as bad as people might believe.

"After listening to its customers, McDonald's is taking responsible steps to provide them with the tools they've asked for to make informed choices," (Parnell, 2006)



 McDonald's have had to use innovation in their menu in the UK. In the last 10-15 year  they constantly ran tests and pilots of potential new products to add to their menu. They followed a strategy to  widen appeal particularly for those with "healthy eating" in mind, whilst also building on their appeal to their main customers. They sometimes put the food past a panel made up of the type of people who they were aiming the product at. They'd then choose sometimes just one or two restaurants, but often several to run the products in for fixed period of time.

"We'd work first with our food suppliers and our food technical teams to get the products right for testing in our restaurants" said Jill Barnes, ex McDonald's Vice President of Quality. "We'd then carefully monitor sales - and how these sales "canibalised" sales of other products. What we were looking for were new products that would bring in extra sales, not just trade off against existing products."

To  limit risk for the change McDonald's would use tests to find out what foods customers would want and develop new foods to meet customers' needs.
 

References

Parnell, S. (2006, April 1). McDonald's responds to Nutrition, Obesity Concerns. Retrieved 1 19, 2012, from Heartlander: http://news.heartland.org/newspaper-article/2006/04/01/mcdonalds-responds-nutrition-obesity-concerns

Barnes, E. (2011, December 20). About menu change management. (J. B.-V. Quality), Interviewed)

Tip 2. Don't be resistant to change

Companies can have problems with innovation when it comes to not wanting to change what they currently have and worrying they will make mistakes and fail.  Failure is not a bad thing as long as you can learn from the mistake and move on in a positive direction and are able to cope with the failure.  

 “ Making mistakes can be the quickest way of learning” (Mckeown,2008)

 Learning from these mistakes could then eventually help develop a product and the company having greater knowledge of what not to do wrong next time.

http://www.valuebasedmanagement.net/methods_rogers_innovation_adoption_curve.html
Rodgers diffusion of innovation theory - 


It is important that companies continue to try to change their products and meet any new customer needs. Any product will have a life cycle which means that after a while the sales of the product will start to fall as competitors bring new things to customers. If a company depends too much on a product that gets older and older and doesn't get a new product in early enough then the company will start to see sales drop.

Marks and Spencer are experiencing good business forture after they used
innovation to turn their business around.

According to a recent article in "This is Money" ".... a range of innovative
products were also driving sales, such as its Nearly Naked lingerie range,
which is designed to disappear under clothing, and its water-resistant
Stormwear suits." (This is money.co.uk, 2011)  

 

 

In the 1990s it was a different story. Marks and Spencer didn't innovate,
they kept trading the same way as before. The product life cycle of a lot of
their products and services went into declide. Even as late as 2004, the BBC
were reporting that Marks and Spencer had got into trouble.

"Today, Marks & Spencer is often mentioned in the same breath as "dire",
"downturn" and "struggle". (Richardson, 2006)

References

Mckeown, M. (2008). The truth about innovation. Prentice Hall; 1 edition.

Richardson, B. (2006, April 14). Is Marks & Spencer's decline terminal? . Retrieved 1 19, 2012, from BBC NEWS: http://news.bbc.co.uk/1/hi/business/3624961.stm

M&S remains cautious despite trading success. (2011, May 24). Retrieved January 19, 2012, from thisismoney.co.uk: http://www.thisismoney.co.uk/money/markets/article-1724301/MS-remains-cautious-despite-trading-success.html#ixzz1jwTPlRBx

Starbucks - sucess from giving people what they want

 (Isabel Isidro) Managing Editor of Startbucks said "Starbucks is one of the most successful and admired companies today. It has grown from a single coffee shop in Seattle 33 years ago to a $4.1 billion international company. From tasty beverages to proprietary whole bean coffee blends to strategic relationships, small businesses have so much to learn from Starbucks."     

Starbucks are another company that represent a lifestyle with their products. They use words to entice their customers and produce an experience that customers are willing to pay money for rather than make a simple coffee at home

The experience they are selling is almost giving escapism from real life for those few minutes that they are in the coffee shop with their chose drink. As Starbucks is a high end coffee shop the target market they go for are people that have possibily come from work and want a relaxing escape ftom their busy office. Is a very innovative idea to make people feel they need this product to help relax and would happily come back for it another day. Starbucks have built a lifestyle brand and have loyal customers to this brand.

Tip 1. Keep Innovating

So successful companies are those who keep innovating, this is interesting.  Apple is a good example of this as they have developed their products for the needs of customers and kept innovating by making new products that seem different and still have the needs for the customer. By constantly researching what their customers want they bring out new products that have become successful.

Starting with the Mac that has now developed to more luxury goods such as the Ipad.. As the need for  portable computers has greatened Apple have developed their older products and been innovative to become successful with new products. Research to support this is a good way of successful innovation is Everette Rodgers 1983 “the innovation process is timeless” Companies have to keep innovating as if they stop the products they originally sell may not be the need of customers and target market anymore.

Apple Overtakes Exxon as Most Valuable U.S. Company

"Apple Inc. recently became the most valuable company in the United States, surpassing oil giant Exxon Mobile Corp." 

The success of Apple is rising every day as they focus on the needs of the customers and develop their technoloy to be a big competitor. As their new and unique products sell they are not only selling a product but a life style. When someone is seen with an Ipod, Mac laptop etc they are sterotyped with a certain lifestyle as it is a luxury and is quite expensive. People feel they need to it have this lifestyle that other people have. 

References
  
August 12, 2011, Finacing Wealth

http://www.financingwealth.com/2011/08/12/apple-overtakes-exxon-as-most-valuable-u-s-company/

What is innovation?

What is Innovation? That's a very good question. It sounds like it should be
about coming up with something new. We can all innovate, but my blog's going
to be about company's that innovate better than anyone else. "the smart companies will keep innovating and the wannabes will stop" (Mckwown, 2008)

"Innovating can be described as change, taking risks, being inventive..."

I'm expecting to find great innovation examples of products, process and strategy at
company's such as Apple, McDonald's, BMW, Shell, Tescos - names that have
national and worldwide fame. But I suspect I might find some unexpected
examples too. 

References

Mckeown, M. (2008). The truth about innovation. Prentice Hall; 1 edition.