INNOVATION IN BUSINESS ENTERPISE

ASSIGNMENT A1. Discuss briefly the role of cultural, social, economic and personality factors responsible for growth of innovations.Ans. 1. ECONOMIC FACTORSa) Lack of adequate overhead facilities:Profitable innovations require basic facilities like transportation, communication power supply etc. They reduce cost of production and increase profit.b) Non availability of capitalInventions are capital oriented. In less developed countries most capital equipment have to be imported which involves foreign exchange which acts as a difficult problem.c) Great risk Risk is high in case of less developed countries as there is lack of reliable information, markets for good and services is small etc.d) Non availability of labor and skillsThough there is abundant labor supply there is generally scarcity of skills a tall levels.2. SOCIAL FACTORSA society that is rational in decision making would be favorable for decision making. Education, research and training is given less importance in less developed countries therefore there is very little vertical mobility of labor.3. CULTURAL FACTORSReligious, social and cultural factors also influence the individual taking up an entrepreneurial career, in some countries there is religious and cultural belief that high profit is unethical. This type of belief inhibits growth of entrepreneurship.4.4. PERSONALITY FACTORSIn less developed countries the entrepreneur is looked upon with suspicion .Public opinion in the less developed nations sees in the entrepreneur only a profit maker and exploited.

2. What are the main hurdles faced in impleting innovations in businesses and enterprises.Ans. 1. COSTDecision-makers have many choices when investing scarce dollars on IT projects. In most organizations it’s a prioritization process that nobody enjoys. But it’s essential. Many great ideas fall by the wayside and never make the light of day in favor of more pressing enterprise needs. In this context, broad implementation of new technology — not research and development efforts — can have real problems securing funds.Additionally, a new solution is often more expensive because of the change that needs to happen. It’s a bigger proposition than an upgrade, an enhancement, or the roll-out of a commodity-type ERP. Other costs, such as risk and the implementation unknowns, can provide a disincentive to decision-makers already jaded by too many failed IT projects.ADVICE: Despite these constraints, many enlightened organizations still commit funds to high-risk, new technology projects, often by using dollars set aside specifically for these special projects. Decide if all projects should go through a standard IT governance or determine whether there should be an exception process that is triggered by technology that meets certain criteria such as high risk and uncertainty.2. COMPLEXITYToday, fewer and fewer solutions remain islands among the IT infrastructure. There are often so many inter-dependencies that even a small change has downstream impacts that must be considered. Introducing new technology into these environments is seldom a trivial exercise. It’s also a reason

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why so many decision-makers prefer single-vendor stacks. Sure, standards have improved the situation immensely, but we’re still a far distance from a place where customization isn’t required.ADVICE: In many ways, this limitation is aligned closely with cost. Complexity becomes less of an issue if you’re prepared to invest in the effort. If possible, put some funds exclusively for this exploratory work in your budget. Think about investing in a lab environment where ideas can be safely explored. Prototypes are a great way to win decision-makers over.3. RESISTANCEWhile both cost and complexity are largely quantitative metrics, there are a number of human factors that greatly influence IT decisions.There is an unfortunate twist to our period of hyper-innovation. While we embrace and support it — we love new toys! — There’s a more sober component to new technology introduction that cannot be overlooked. It’s similar to that moment at a buffet when you know you’d like to try more, but you’re simply too full. Humans have a cap on the amount of new technology they are able to consume. Introduce too many new solutions and functions and they will be rejected.This applies to system improvements too. Make too many far-reaching modifications and you risk a user rebellion. That’s a recipe for failure.ADVICE: Leaders need to evaluate for their organization the pace at which new capabilities can be deployed. It’s probably a lot slower than we all think. Spend time to discuss different views with a variety of stakeholders. Analyze historical trends. Monitor usage as products get deployed. Over time it will become clear what the tipping point is. Your users will quickly let you know.4. LEGACYOur desire for change is often at odds with our need for things to remain the same. It has a lot to do with comfort and trust. We often like the things we know more than things that are new and unknown. There’s a reason we go back to that tried and tested Excel formula when we know we have the same capability in our latest ERP system. There’s a reason we continue to use email for seeking answers when our organizations have spent millions on elaborate knowledge management systems. There’s predictable value in legacy systems.New technology often has to compete with these older solutions. For many of your users, you’ll need to pry them away from old applications kicking and screaming. In some instances resistance will be so fierce, you’ll be forced to concede.As a consequence, legacy systems can present a limitation to the introduction of new technology. It may not happen at the time of deployment. It’s just as likely to happen at IT governance when the decisions are being made on what projects to invest in. A debate may ensue that argues in favor of the legacy solution and that will kill the new technology before it ever sees the light of day.ADVICE: Really focus on the business case. Communicate it loud and clear. Make sure you have air-tight evidence for the return-on-investment (but recognize the need for a small number of leading-edge projects to move forward without all the evidence). Numbers talk, particularly dollars. Championing should come from many different leaders. Make a strong case, but ultimately respect the organizations choice.5. POLITICSOh the joy of organizational politics! It should come as no surprise that politics plays an important role in IT decision-making. Sometimes it can be an asset. For example, escalating up a hierarchy to leverage leadership perspective can often be a good way of getting tough decisions made. But it can too often be a liability. For example, individual or team self-interest can result in vendor selections that don’t reflect evidence gained in requirements gathering.Reconciling organizational and individual interests is a messy business. I imagine many of us can tell our own stories of how we observed decisions being made that had little basis in reasonable logic. We’d like to pretend it isn’t a factor, but all too often it is.Negative organizational politics can hinder IT innovation. There is considerable value to the skill in those that can navigate within those constraints and turn them into a positive outcome.

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ADVICE: Organizational politics shouldn’t be viewed as always being negative. It’s important to recognize the role it plays in the process of introducing new technology and then work to channel it into a positive force. Find out who your allies are and partner with them to help make a business case. Observe, listen and learn about your organizations dynamics. Make note of what works and what doesn’t and leverage that knowledge to navigate through the organizations politics. It’s not easy at all and an excellent skill for those that can master it

3. Briefly discuss the role of leadership in creating an innovative environment in businessesAns.

In today's innovation-driven economy, understanding how to generate great ideas is an urgent managerial priority. And that calls for major doses of creativity. But many leaders assume creativity is too elusive and intangible to be managed.

It's true that you can't manage creativity. But you can manage for creativity, say innovation leaders and experts who participated in a 2008 Harvard Business School colloquium. Among their recommendations for fostering the conditions in which creativity flourishes:

Stop thinking of yourself as the wellspring of ideas that employees execute. Instead, elicit and champion others' ideas.

Open your organization to diverse perspectives--by getting people of different disciplines, backgrounds, and areas of expertise to share their thinking.

Know when to impose controls on the creative process (such as during the commercialization phase) and when not to (during early-idea generation).

To enhance organizational creativity, consider these practices:

Elicit ideas from people throughout your organization. Google's founders Sergey Brin and Larry Page tracked the progress of ideas that came from them versus ideas that bubbled up from the ranks--and discovered a higher success rate in the latter category.

Motivate people to contribute ideas by making it safe to fail. Stress that the goal is to experiment constantly, fail early and often — and learn as much as possible in the process. Convince people that they won't be punished or humiliated if they speak up or make mistakes.

Further engage people by being an appreciative audience. Asking questions about a project and providing even a word of sincere recognition can be more motivating than money.

Open Your Company to Diverse PerspectivesInnovation is more likely when diverse people come together to solve a problem. Even within the mind of an individual, diversity enhances creativity. Individuals who have multiple social identities--for instance, Asian and American, female and engineer--display higher levels of creativity when problems require them to draw on their different realms of knowledge.

The lesson? Avoid suppressing parts of people's identity. For example, craft a culture where female engineers can feel comfortable wearing feminine clothing.

Protect Creatives from BureaucracyAs a fresh idea travels through an organization toward commercialization, powerful constituencies often beat it into a shape that conforms to the existing model. Protect those doing creative work from this hostile environment by clearing paths for them around obstacles.

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Know When to Impose Controls--and When Not ToThe early discovery phase of the creative process is inherently confusing and inefficient. So don't impose efficiency-minded controls during that phase. Instead, apply them when the game has moved from discovery to reliability and commercialization.

Know which phase you're in, and ensure that people with the right skills (such as ability to manage the handoff to the commercialization phase) are involved in the right stages.

Create a Filtering MechanismFor every idea with real commercial promise, there are dozens that aren't worth pursuing. How to winnow out the bad from the good? Have people from a variety of disciplines, functions, and viewpoints act as filters. Also consider using business "accelerators" (outside companies that test product ideas) to gauge their potential

4. Explain how innovation is used by businesses to achieve sustainable competitive advantage? Support your response with examples.Ans. Innovation is used by businesses to achieve sustainable competitive advantageInnovation is the process of creating and implementing a new idea. It is the process of taking useful ideas and converting them into useful products; services or processes or methods of operation. These useful ideas are the result of creativity, which is the prerequisite for innovation. Creativity in the ability to combine ideas in a unique way or to make useful association among ideas. Creativity provides new ideas for quality improvement in organizations and innovation puts these ideas into action.

Change and innovation are closely related, even though they are not the same. Change often involves new and better ideas. The new idea may be the creation of a new product or process or it can be an idea about how to change completely the way business is carried out. Successful organisations understand that both innovation and change are required to satisfy their most important stake holders.

Strategic Importance of Innovation:For both established organisations as well as new organisations, innovation and change become important in a dynamic, changing environment. When a company fails to innovate and change as needed, its customers, employees and the community at large can all suffer. The ability to manage innovation and change is an essential part of a manager’s competencies.

Types of Innovation:Three basic types of innovation are:(i) Technical,

(ii) Process and

(iii) Administrative.

Technical innovation involves creation of new goods and services. Many technical innovations occur through research and development efforts intended to satisfy demanding customers who are always seeking, new, better, faster and/or cheaper products.

Process innovation involves creating a new way of producing, selling or distributing an existing good or service.

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Administrative innovation occurs when creation of a new organisation design better supports the creation, production and delivery of goods and services.

The various types of innovation often go hand in hand. For example, the rapid development of business to business e-commerce represents process innovation. But this new process requires many technical innovations in computer hardware and software. Also as firms began to use business to business e-commerce, administrative innovation soon followed. Further, implementation of process innovations necessitated organisational change. “Doing something new means doing something differently”. Thus, innovation and organisational change go hand in hand.

Technology and Innovation:Technology is defined as the systematic application of scientific knowledge to a new product, process or service. It is also defined as the methods, processes, systems, and skills used to transform resources into products. Technology is embedded in every product, service, process and procedure used or produced.

“Innovation is a change in technology”. When we find a better product, process or procedure to do our task, we have an innovation. Process innovations are changes which affect the methods of producing outputs. For example, manufacturing practices such as just-in-time, mass customerisation, simultaneous or concurrent engineering – are all innovations.In contrast, product innovations are changes in the actual outputs themselves. Technological innovation is daunting in its complexity and pace of change. It is vital for a firm’s competitive advantage because today’s customers often demand products that are yet to be designed. As technologies develop, product obsolescence increases and innovative products will have to be introduced into the markets.

Managing technology requires that managers understand how technologies emerge, develop and affect the ways organisations compete and the way people work. Technology can greatly affect an organisation’s competitiveness and managers have to integrate technology into their organisation’s competitive strategy. Managers need to assess the technological needs of their organisations and the means by which these needs can be met.

Understanding the forces driving technological development and the patterns they follow can help a manager anticipate, monitor and manage technology more effectively.

i. First, there must be a need or demand for the technology. The need acts as a driving force for technological innovation to occur.

ii. Second, it must be theoretically possible to meet the need using the knowledge available from basic science.

iii. Third, it must be possible to convert the scientific knowledge into practice in both engineering and economic terms.

iv. Fourth, the necessary resources such as finance, skilled labour, time, space and other resources must be available to develop the technology.

v. Finally entrepreneurial initiative is needed to identify and put all the elements together.

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The diffusion of technological innovations:For successful diffusion of a new technology over a period of time it should have the following attributes:(i) Great advantage over its predecessor.

(ii) Compatible with existing systems, procedures, infrastructures and ways of thinking.

(iii) Has lesser complexity than its predecessor.

(iv) Can be easily tried and tested without significant cost or commitment.

(v) Can be easily observed and copied (or adopted).

5. What are the key characteristics of an innovative organisation?Ans. 1. Unique and Relevant StrategyArguably, the most defining characteristic of a truly innovative company is having a unique and relevant strategy. We all know what companies like Apple, Facebook and Google do. That’s because they make their strategies clear and relentless follow them. An innovative smaller player may not be recognised globally, but its leaders, employees, business partners and customers all will have a clear idea of the company’s strategy. If a business does not have definable, unique strategy, it will not be innovative. Bland strategies, such as “to be the best”, do not provide a path to innovation in the same way clearer strategies, such as “to be on the cutting edge of mobile communications technology,” “to build the world’s safest cars”or “to deliver anything anywhere” do. If your strategy is vague or fails to differentiate your company from the competition, you should change this situation as quickly as possible!2. Innovation Is a Means to Achieve Strategic GoalsHighly innovative companies do not see innovation as an end, but rather as a means to achieving strategic goals. Just as a good camera is an essential tool that enables the photographer to take professional images and the saw is an essential tool for the carpenter, innovation is an essential tool for visionary companies intent on achieving their strategic goals. Indeed, if you look at the web sites of the world’s most innovative companies, they tend not to trumpet innovation, but rather corporate vision.3. Innovators Are LeadersThe one thing innovation provides more than anything else is market leadership. When companies use innovation to achieve strategic goals, they inevitably take the lead in their markets. Unfortunately, this does not always translate to being the most successful or profitable. Amazon has been an innovator from the beginning, setting many of the standards for e-commerce. Nevertheless, it took some years for the company to become profitable. Cord was one of the world’s most innovative car companies, launching cutting edge innovations such as front wheel drive and pop-up headlights – in the 1920s and 30s. However the company was never very successful financially and went out of business in 1938.On the other hand, innovators like Apple and Google have been financially successful as a result of their innovation. In short, innovators are leaders, but not always profitable leaders!4. Innovators ImplementMost businesses have a lot of creative employees with a lot of ideas. Some of those ideas are even relevant to companies’ needs. However, one thing that differentiates innovators from wannabe innovators is that innovators implement ideas.Less innovative companies talk more about ideas than implementing them!5. Failure Is an Option

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I would argue the most critical element of business culture, for an innovative company, is giving employees freedom and encouragement to fail. If employees know that they can fail without endangering their careers, they are more willing to take on risky, innovative projects that offer huge potential rewards to their companies. On the other hand, if employees believe that being part of a failed project will have professional consequences, they will avoid risk – and hence innovation – like the plague. More importantly, if senior managers reward early failure, employees are far more likely to evaluate projects regularly and kill those projects that are failing — before that failure becomes too expensive. This frees up resources and budget for new innovative endeavours. However, in businesses where failure is not an option, employees will often stick with failing projects, investing ever more resources in hopes that the project will eventually succeed. When it does not, losses are greater and reputations are ruined. As a result, companies that reward failure often fail less than those that discourage it.

6. Discuss innovation as a disruptive technology. Give examplesAns. A disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry.

Harvard Business School professor Clayton M. Christensen coined the term disruptive technology. In his 1997 best-selling book, "The Innovator's Dilemma," Christensen separates new technology into two categories: sustaining and disruptive. Sustaining technology relies on incremental improvements to an already established technology. Disruptive technology lacks refinement, often has performance problems because it is new, appeals to a limited audience and may not yet have a proven practical application. (Such was the case with Alexander Graham Bell's "electrical speech machine," which we now call the telephone.)

Here are a few examples of disruptive technologies: 

The personal computer (PC) displaced the typewriter and forever changed the way we work and communicate.

The Windows operating system's combination of affordability and a user-friendly interface was instrumental in the rapid development of the personal computing industry in the 1990s. Personal computing disrupted the television industry, as well as a great number of other activities. 

Email transformed the way we communicating, largely displacing letter-writing and disrupting the postal and greeting card industries. 

Cell phones made it possible for people to call us anywhere and disrupted the telecom industry.

The laptop computer and mobile computing made a mobile workforce possible and made it possible for people to connect to corporate networks and collaborate from anywhere. In many organizations, laptops replaced desktops. 

Smartphones largely replaced cell phones and PDAs and, because of the available apps, also disrupted: pocket cameras, MP3 players, calculators and GPS devices, among many other possibilities. For some mobile users, smartphones often replace laptops. Others prefer a tablet.

Cloud computing has been a hugely disruptive technology in the business world, displacing many resources that would conventionally have been located in-house or provided as a traditionally hosted service. 

Social networking has had a major impact on the way we communicate and -- especially for personal use -- has disrupted telephone, email, instant messaging and event planning.

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7. Discuss the main tenets of static versus radical innovation.Ans. Some believe that radical innovation has clear, delineated parameters and point to academic and business leaders influential in this sphere, such as Clayton M. Christensen, as having provided those parameters.

Others, however, advocate for a more subjective determination of what constitutes radical innovation -- although they, too, generally agree that radical innovation wholly replaces an existing design, process or system to create something substantially new and unique.

Radical innovation falls on the farthest end of the innovation continuum. A modular innovation involves changing one module in a design, process or business model to generate significant improvements. An architectural improvement changes how those modules work together to bring significant improvements. Radical innovation changes both the components and how the components interact and puts them together in a new way to create a unique solution.

In business and technology terms, radical innovation happens when a new entry completely disrupts a business or industry. Many point to the rise of Netflix, first as a mail-order movie service and later as a provider of streaming video, as a radical innovation that put the retail-based movie rental model -- and industry giant Blockbuster -- out of business innovation has become a widely used, but ill-defined, everyday term in the 21stcentury. Firms are urged to be innovative to gain or sustain a ‘competitive edge’; consultants advertise their strategic advice as the essence of innovation; the survival of local organisations depends on the capacity building that comes from innovation; schools are exalted to have innovation in their curriculum; and universities promote themselves as leaders in innovation. Likewise, the term entrepreneur, used to describe the human agency behind innovation, is equally ill-defined in everyday use. Entrepreneurs’ value to society varies widely from positive to negative depending on the emphasis of journalists, academics, businesspersons, unionists, right-wing think tanks and left-wing activists. Such imprecise definition is, however, undesirable in academic discourse and the focus of this paper is the shifting role of the innovative entrepreneur in economic theory and some of the reasons for this dynamic.

8. Discuss Handerson and Clark model of innovations. Give examples.Ans. Henderson – Clark ModelHenderson and Clark noticed that the Incremental – Radical dichotomy alone was not enough to explain what company would be in a better position to innovate and under what circumstances. They started wondering, for instance, why some incumbents would fail to catch something as straight-forward as some incremental innovations, just like Xerox failed to develop a small plain-paper copier even when it was the leader in xerography technology. The investigation led them to divide the technological knowledge required to develop new products, and consequently to introduce innovations, along two new dimensions: knowledge of the components and knowledge of the linkage between them, called architectural knowledge.

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In order to exemplify the four possible innovation cases I will use the hard disk, a product that evolved dramatically throughout its 50 years of existence. According to the Henderson-Clark model an incremental innovation will build upon existing component and architectural knowledge. If we consider the hard disk, an improvement in the magnetic disk capacity and a faster rotation speed represent two examples of incremental innovation.The second possible case is the modular innovation. Modular innovations will require new knowledge for one or more components, but the architectural knowledge remains unchanged. Around the 1980s most hard disk manufacturers substituted the ferrite read/write heads with thin-metal heads; this is a clear example of modular innovation. The opposite of modular innovation is the architectural innovation. This type of innovation will have a great impact upon the linkage of components, but the knowledge of single components will remain the same.The hard disk industry went through several waves of miniaturization, the first mainframe computers were packed with 14-inch diameter disks, after some years the industry came out with 8‘, 5,25‘, 3,5’ and 1,8‘ disk drives. Each and every time the size of the hard disk diminished the knowledge of the linkages between components was evolving, while the single components were using pretty much the same technology, as a result we classify such changes as architectural innovations.Finally, when a certain innovation revolutionizes both component and architectural knowledge it will be a radical innovation. Once again if we consider the hard disk industry one example of a radical innovation was the passage from magnetic to optical technology. The introduction of the laser in the disk drive industry required not only new components but it also changed the configuration of such components inside hard disks.It is clear now that even if some innovations might appear incremental at a first sight this may not be the case, it is necessary to analyse how it impacts both component and architectural knowledge. Companies, therefore, must be careful in distinguishing between incremental and architectural or modular innovations because the competencies and strategies required to exploit one might not suit perfectly the other, if at all. Canon was able to invade Xerox’s turf because it developed the right architectural knowledge required to re-design the photocopier machine with smaller dimensions.

ASSIGNMENT B

(Case Study)

Procter & Gamble (P&G)

While P&G is widely recognized for its marketing might, its legacy as an innovator is equally rich. Over its 175-year history, the Cincinnati firm has consistently created new categories of consumer

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goods -- from the first disposable diaper (Pampers) to the first toothpaste with fluoride (Crest) to the first synthetic laundry detergent (Tide).

The problem of growth

But in March of 2000, a slight decline in P&G's sales and an earnings warning sent its stock price tumbling. By June, P&G named a new CEO, A.G. Lafley, who brought in fresh thinking about corporate strategy and welcomed new perspectives on innovation. When an internal analysis revealed that only 15% of innovation projects were meeting success targets, senior executives began searching for ways to turn around this key metric.

During this time, a number of top P&G leaders were exploring ideas in The Innovator's Dilemma, the groundbreaking book by Innosight co-founder Clay Christensen. And not long after, P&G began collaborating with an Innosight team to build innovation capabilities that would spawn new brands and business models. The idea was to institute a process that was analogous to a factory -- making innovation systematic, repeatable and reliable.

Innovation assembly lines

Via its new Connect & Develop program, P&G stepped up the sourcing of raw materials -- in the form of product ideas from outside the company. "It didn't matter where the ideas came from," says Nathan Estruth, vice president of P&G Future Works. "We had to systematize a process to find them, to partner, to bring them in, and to turn raw ideas into innovations in our growth factory."A key part of improving its innovation success rate was setting up "innovation assembly lines" by seeking growth from four major categories of innovation:1. sustaining innovations to improve on existing products (i.e Gillette Fusion)2. Disruptive innovations that bring high-end services to mass markets (i.e Crest White Strips)3. Transformative innovations based on performance breakthroughs (i.e Olay Pro-X)4. Commercial innovations to enhance the consumer experience (i.e BrandSaver events)Small bets labsInnosight's "emergent strategy" approach of testing and refining market approaches was applied to a string of new product ideas.For instance, P&G had tapped into university research for a potentially transformative innovation: a probiotic supplement to improve digestive health. But there was a large degree of uncertainty as to whether the new dietary product, called Align, was a worthwhile opportunity.Instead of committing to a national retail launch, P&G created a website and promoted Align in just three mid-sized metro areas. "We placed a small bet," says Bruce Brown, P&G's Chief Technology Officer. "And that was one of the smartest things we did in terms of rapidly progressing the Align brand."P&G also conducted a small-scale market trial for the concept of attaching the venerable Tide brand to a new consumer experience. Deploying "jobs to be done" research, P&G found that there was high dissatisfaction with existing dry cleaners and potential room for a national brand.Tide Dry Cleaners was initially launched in just two or three locations. That allowed P&G to refine the customer value proposition and the operating plan before it began to scale to more locations.Innovation transformationAll in all, thousands of P&Gers applied its improved innovation framework to scores of new projects and products. "Innosight has been a close partner in P&G's innovation transformation," said A.G. Lafley, who retired in 2010 but returned as CEO in May 2013.The result is that P&G has dramatically improved its innovation success rate, moving from about 15% to over 50%, meaning about half of its new product efforts are meeting benchmarks for success. That has helped boost overall corporate performance. Over the decade, P&G's revenue more than doubled, and profits quintupled.The commitment to the growth factory principles has continued through management changes,

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including the return of CEO A.G. Lafley in 2013. So it's about more than just hitting financial numbers. "There is a confidence inside P&G," says Estruth, "that the systematic approach enabled by Innosight will continue to drive our growth factory, and help us meet our goals for many years to come."

Q.No 1: While P&G is known for its marketing its legacy as an innovative enterprise is equally rich. Discuss this statement in the light of the case study.Ans. (Reuters) - Kimberly-Clark Corp (KMB.N) is set to increase advertising and promotional spending for its diapers and launch new products in an escalating war with bigger rival Procter and Gamble Co (PG.N) in North America. Industry analysts say moms are either going upscale and choosing Pampers or going down-market with Luvs, both P&G brands, leaving Kimberly-Clark’s mid-tier Huggies Snug & Dry line without a real identity. To compete better, Kimberly-Clark said on Friday it would cut prices and “improve” its Snug & Dry line starting this quarter, without giving details. Huggies is the core of Kimberly-Clark’s baby care products business, which generates about $7 billion in annual sales. Pampers, P&G’s largest brand, alone has sales of over $10 billion. “The consumer is shifting downward in price and they (Kimberly-Clark) don’t have a lower-priced product,” Sanford Bernstein analyst Ali Dibadj told Reuters. Dibadj said the company could play either end of the price spectrum: introduce a lower-priced brand or “a product that is of such high quality that people are willing to pay more for it.”P&G and Kimberly-Clark control about 80 percent of the U.S diaper market, but the Kleenex maker is losing share, according to Euromonitor International data. Huggies’ U.S. market share dropped to 8.50 percent in 2013 from 10.2 percent in 2008.Indeed, weakening sales of Huggies and other core products in North America is expected to lead to fall in sales in 2015, Kimberly-Clark said on Friday. Its shares fell 6 percent. To claw back market shares, Kimberly-Clark plans to launch new products this year and spend more on advertising them. Barclays analyst Lauren Lieberman estimates the company could have up to $500 million of cost savings, some of which could be used for these initiatives. Kimberly-Clark spent about $3.71 billion on marketing and research in fiscal 2014. P&G spent nearly triple, $9.73 billion, just on advertising in 2013.Lieberman said Luvs sells at a roughly 20 percent discount to Huggies Snug & Dry, with the magnitude of the discount varying with promotional activity.

Q.No 2: The problem was that only  25%  of the innovation products were meeting success targets.  What in your opinion is the reason for this to be true?Ans.

All in all, thousands of P&Gers applied its improved innovation framework to scores of new projects and products. "Innosight has been a close partner in P&G's innovation transformation," said A.G. Lafley, who retired in 2010 but returned as CEO in May 2013.The result is that P&G has dramatically improved its innovation success rate, moving from about 15% to over 50%, meaning about half of its new product efforts are meeting benchmarks for success. That has helped boost overall corporate performance. Over the decade, P&G's revenue more than doubled, and profits quintupled.The commitment to the growth factory principles has continued through management changes, including the return of CEO A.G. Lafley in 2013. So it's about more than just hitting financial numbers. "There is a confidence inside P&G," says Estruth, "that the systematic approach enabled by Innosight will continue to drive our growth factory, and help us meet our goals for many years to come."

Q.No 3: What stratey did P&G adopt to increase innovation success rate?Ans.

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In the early 2000s only 15% of P&G’s innovations were meeting their revenue and profit targets. After P&G built organizational structures to systematize innovation, that figure is 50%. Chairman, President, and CEO, Bob McDonald explains, “People will innovate for financial gain or for competitive advantage, but this can be self-limiting. There needs to be an emotional component as well-a source of inspiration that motivates people.”

P&G began hosting a 2 day workshop that adopted Clayton Christensen’s disruptive-innovation theory.  The workshop helped launch new product ideas and how to build on existing ones.  From there, P&G formed a “new growth factory”.  The purpose is to strengthen its core business and innovate new strategies and products.

The results? Look at Tide-In 2000, Tide had been in existence for 50 years and while still dominant, it’s revenues were not enough to support P&G’s needs.  Through the new growth factory, it launched Tide Acti-Lift, Tide Stain Release, and Tide Naturals (created for Indian consumers).  Within one year, Tide had 26 new patents.

Tide’s revenues have nearly doubled, from $12 billion to almost $24 billion.  P&G shares numerous lessons, from which we can all learn something, but here are just a few:

Branding: P&G communicates their innovation approaches to both internal and external stakeholders

Make sure you have the right people doing the right work: In the past, their innovation team members had other, full time job responsibilities.  They were not always “going the extra mile” since they were pulled in other directions.  P&G realized their innovators must be fully invested, and completely focused.  They made changes and hired full time innovation team members.  These are the types of people that “go to bed thinking about new innovations”.

Shared employees with noncompeting companies: In 2008, P&G and Google swapped 2 dozen employees for 2 weeks to gain new perspectives, collaborate, and leverage each other’s strengths

ASSIGNMENT C

1. Intrapreneurship isn’t just about coming up with a new product – although this is a great example of Intrapreneurial behavior. It could be taking an existing product………(A): to new heights(B): developing new markets(C): improving efficiencies – all manners in which the company is propelled forwards towards its goals(D): all of these

2. Intrapreneurship mobilizes the individual to put their ………………………………into play to invigorate their career to maximise their personal potential and achievements(A): talents(B): creativity(C): passion(D): all of these

3. Usually one finds vacancies being advertised for the following except(A): Managers

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(B): Sales representatives(C): Scientists(D): Intrapreneurs

4. Intrapreneurs are also seen as except one(A): Agents of change(B): Different(C): people who think out of the box(D): Non-performers

5. Based on ownership structure and Resource Authority -The Enabler, The Producer, The Opportunist and The advocate are the four models for…….(A): Corporate Entrepreneurship(B): Product Development(C): Market Development(D): None of these

6. All of the following are characteristics of an entrepreneurial opportunity except:(A): attractive.(B): achievable.(C): affordable.(D): value creating.

7. Which of the following are common causes of small business failure?(A): high stress level(B): poor management(C): inability to cope with growth(D): all of the above

8. One of the most significant strengths of small businesses is their ability to ______.(A): organize(B): innovate(C): raise funds(D): communicate

9. Which of the following is an advantage of an entrepreneurial unit?(A): ability to gain a solid reputation(B): flexibility and focus(C): independence(D): all of the above

10. Since Brian Thomas decided to purchase the rights to own and operate a Baskin Robbins ice cream shop rather than start his own operation, he is(A): an entrepreneur.(B): a franchisee.(C): an industrialist.(D): a franchiser.

11. Which of the following is not an advantage of an entrepreneurial unit?(A): lower cost of formation(B): flexibility and focus

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(C): independence(D): high failure rate

12. Xerox, Apple Computer, and IBM have all done what in recent years to improve competitiveness?(A): gone public(B): hired new CEOs(C): downsized(D): all of the above

13. Dell Computers and Procter & Gamble began as what type of organization?(A): limited partnerships(B): hybrid organizations(C): small businesses(D): cooperatives

14. Entrepreneurial units can target their efforts toward a few key customers or on a precisely defined market niche. This advantage of small business is(A): focus(B): flexibility.(C): reputation.(D): hierarchical organization.

15. To start any business you must first have(A): a business plan.(B): an idea.(C): financial resources.(D): all of the above.

16. Estimates of income, estimates of expenses, an explanation of the business, and an analysis of the competition are typically included in the(A): mission statement.(B): corporate charter.(C): business plan.(D): corporate statement.

17. Retailing, services, and high technology are attractive to entrepreneurs for which of the following reasons?(A): High initial capital investment requirements and ease of entry(B): Low initial capital investment requirements and difficulty of entry(C): Low initial capital investment requirements and ease of entry(D): High initial capital requirements and difficulty of entry

18. Which of the following best describes corporate entrepreneurship?(A): Application of entrepreneurship within a firm(B): Application of entrepreneurship on behalf of a firm by an outside party(C): Application of entrepreneurship outside the firm(D): Any application of entrepreneurship that affects the firm

19. What is the process by which individuals pursue opportunities without regard to resources they currently control?

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(A): Startup management(B): Entrepreneurship(C): Financial analysis(D): Feasibility planning

20. Which one of the following may need the business plan?(A): Employees(B): Investors(C): Advisors(D): All of the given options

21. Strategic renewal is a____________(A): Top down approach(B): Bottom up approach(C): Flanked entry approach(D): all of the above

22. Corporate Entrepreneurship is a ____________(A): Top down approach(B): Bottom up approach(C): Flanked entry approach(D): all of the above

23. Quality/(ies) required for an entrepreneur to succeed is/are(A): Focus(B): Risk aversion(C): power over people(D): all of the above

24. In their organizations intrapreneurs are generally ….(A): ridiculed(B): isolated(C): misfits(D): all of the above

25. Which of the following is not a part of the organizational life cycle?(A): Startup/growth(B): maturity/decline(C): renewal/death(D): conceptualizing/product prototyping

26. The correct set of models of corporate entrepreneurship is….(A): idealist/enabler/advocate/producer(B): opportunist/enabler/advocate/humanist(C): opportunist/enabler/advocate/producer(D): opportunist/enabler/scientist/producer

27. A feasibility study contains a study of ……(A): Market feasibility(B): Finacial feasibilty(C): Technical feasibility

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(D): all of the above

28. The word Intrapreneurship was coined by…..(A): Gifford & Pinchot(B): Stevenson & Ginsberg(C): Sandberg & MacDougall(D): all of the above

29. Bootstrapping involves(A): using one's own resources(B): help from family(C): help from friends(D): all of the above

30. The four levels of corporate entrepreneurship are(A): Enterprise level/ corporate level/business unit level/ functional level(B): Top Management level/ middle management level/line manager level/ worker level(C): Level 1/Level 2/Level 3/Level 4(D): all of the above

31. Partnership between large companies and new entrepreneurial firms is a result of …..(A): complimentarity(B): flexibilty of smaller firms(C): rigidity of large firms(D): all of the above

32. To start a business one must first have. Solve by www.solvezone.in contact for more details at 8882309876(A): idea(B): product(C): market(D): finance

33. In corporate entrepreneurship the differences between management and promoters of ideas are because of…….(A): differences in prospects(B): lack of capital(C): lack of resouces(D): all of the above

34. Which of the following is an online connection between a company and its customers(A): Internet advertising(B): e-commerce(C): website(D): all of the above

35. Which of the following factor does not affect a person for being an entrepreneur?(A): Family background(B): Education(C): Gender(D): all of the above

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36. Most of the finance for the new firm comes from following resources EXCEPT:(A): Friends(B): Foreign aid(C): Relatives(D): Personal savings

37. Which one of the following will necessarily need the business plan?(A): Employees(B): Investors(C): Advisors(D): All of the given options

38. Which of the following are detrimental to intrapreneurship(A): Not enough insight into customers(B): Lack of time and resources(C): Risk adverse culture/ resistant to change(D): All of the above

39. Which of the following model of entrepreneurship has a dedicated resouirce authority but a diffused organizational ownership structure(A): opportunist(B): enabler(C): advocate(D): producer

40. Which of the following model of entrepreneurship has a dedicated resouirce authority but a focussed organizational ownership structure(A): opportunist(B): enabler(C): advocate(D): producer

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