Product Innovation Challenges

New Research Study Uncovers Product Innovation Challenges Facing Consumer Goods Manufacturers: Companies Generate Plenty of Product Ideas, But Post-Launch Results Fall Short of Goals

A new research study, specific to consumer goods manufacturers, is looking into product innovation and which challenges they are facing. The study focuses on consumer goods (CG) manufacturers and their investments in product innovation. It goes on to identify the major challenges manufacturers face in this pursuit. According to the research, when it comes to product innovation, companies aren’t having any trouble generating ideas, but the post-launch results are far from what’s expected. The survey showed that companies on average generate 25% of their revenues from products, which have been introduced within the past five years. However, only half of these new products achieve their profit goals. Some of the major causes of the profit shortfalls are a result of poor market analysis and lack of product differentiation.

Anyone can come up with ideas for new products. I can come up with a new toothbrush, even 100 different styles of toothbrushes, but if nothing sets it apart from the other products in the market, why is someone going to purchase my new product over the market leader? They will not. That is why it’s so important to conduct market research in the early stages of product development to ensure that there’s a place in the market for that item and to ensure that it’s positioned in the markets perfectly to reach profit expectations. Also, sometimes companies are so focused on getting new products out they don’t spend enough time looking at it’s profit margin. Oftentimes companies are so focused on increasing their top line, especially through new product launches that they don’t realize they are actually losing money manufacturing that product.

The study also identified the primary reason why good product ideas fail is because they get stuck between development and conception. When it came to execution of product ideas, nearly 60% of survey respondents indicated that the development resources were stretched too thin because of an excessive number of projects in the pipeline. Obviously a firm’s resources aren’t endless and it’s only reasonable that they will not be able to go forward with every product idea that comes to mind. It’s better to go forward with 2 good product ideas and to have the resources allocated so that there is sufficient support to bring the products to market. It’s less effective to have 10 products all moving through the R&D pipeline at the same time with fewer resources dedicated to each. It’s better to prioritize the new product ideas by importance and focus on those that show potential in the market.

For a copy of the article, click the link below:

http://www.businesswire.com/news/home/20111011005513/en/Research-Study-Uncovers-Product-Innovation-Challenges-Facing

Porter’s 3 competitive strategies

Discuss ways your business project could use each of Porter’s 3 competitive strategies: cost leadership, differentiation, and focus. How would the company have to change to handle each?

The objective of Michael Porter’s competitive strategies is to seize the competitive advantage over the long run. This competitive advantage can be based on the cost leadership or differentiation strategy. Porter’s competitive strategies include cost leadership strategy, differentiation strategy and focus strategy. Lets learn.com needs to decide which strategy will be most suitable according to the business structure, priorities and goals. Let's now look at the application of these strategies for letslearn.com.

Cost Leadership Strategy

In cost leadership strategy letslearn.com should seek to achieve the position of lowest cost online learning and collaboration service provider to the student community. In this strategy letslearn.com can compete on price with the rivals to enter and capture market share to earn profits. To adopt a cost leadership strategy letslearn.com should focus on the following:

• Letslearn.com should target based on economies of scale by ensuring the availability of the services to as many number of students as possible.
• Use the latest technology and ways to minimize the operational cost.
• Concentrate on increasing the number of member students as much as possible.
• Minimize overhead costs to achieve the low cost service goal.
• Increase membership of professors and tutors to the optimum level.
• Try to provide free or low cost features.

Differentiation Strategy

In the differentiation strategy it is assumed that competitive advantage can be achieved through distinguishing features of the service. In this case if letslearn.com adopts the differentiation strategy, the focus should be on high value added services with distinctive features that are not available with others in the industry. Letslearn.com should provide a great deal of quality resources with high cost and include:

• Offer special features relating to online resources, counseling and access to research networks.
• Build a brand image among the students as a solution to every problem.
• Focus on innovating new and advanced features that can create a difference in the lives of student community.
• Letslearn.com will need a strong promotion campaign to successfully communicate the strengths of the services like quality, reliability and high-tech based.
• Highly enthusiastic and motivated team of professionals to create and update the new and advanced features
• Provide access to leading research materials and resources etc.

Focus Strategy

The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. Letslearn.com can segment the different level of students according to grade/class/subject and location etc. to either follow cost advantage or differentiation strategy. In the segment with cost focus strategy company should focus on low cost, high volume of members and low level of differentiation to save cost. In the segment where letslearn.com wants to use a differentiation focus strategy, the company should provide high value added features and access to worthy materials.

“Strategy & the Internet” - Porter

How the Internet has influenced the power each force has in his Industry Structure model.

The Internet has tremendous implications in strategy and strategic decisions. To gain sustainable competitive advantage companies tend to focus on operational effectiveness to achieve the low cost leadership or strategic positioning of the firm in its industry to create differentiation and unique value for customers. From the operational effectiveness paradigm, internet helps companies to offer fast, accuracy and reliability in operations. However this opportunity is for all in the market. Rivals can easily achieve the same operational effectiveness as the company has no propriety rights to the internet. Therefore, the internet cannot be a factor of creating sustainable competitive advantage in operational effectiveness paradigm in the long run. From the strategic positioning perspective of gaining sustainable competitive advantage, the internet provides a platform to create customized, unique, and integrated systems that help companies to create and maintain distinctiveness in their products and services. Companies need to use the internet as a complement to the traditional ways of competing.

Let's look at Porter's Five Forces:

Threat of Substitute Products and Services

The Internet influences the market to expand by making overall industry more efficient, which results in the new substitution threats. On one side the internet pushes a positive change of expanding the overall industry and creating new opportunities. On the other side it boosts the substitution threat caused by more efficient ways of operational activities.

Bargaining Power of Suppliers

Internet raises the bargaining power over suppliers through efficient procurement services which is an advantage to the companies. It also provides suppliers the chance to attract a wide range of customers. The Internet gives an opportunity to the suppliers in that they can directly deal with the end users and thereby eliminating the role of intervening companies. It also optimizes procurement efforts of companies which allow equal chances to access the suppliers which ultimately reduce the companies’ capability of differentiation.

Bargaining Power of Customers

The Internet improves bargaining power of customers and reduces their switching cost, which will negatively impact the company by making it easy to choose an alternative option.

Barriers to Entry

The emergence of the internet reduces the entry barriers for new entrants through minimizing the heavy costs like physical assets, access to channels and human resource requirement for sales because everyone now has access to internet applications and no one has proprietary rights to it. As a result of these reduced entry barriers the number of new entrants has been greatly increased in almost all of the industries.

Rivalry Among Existing Competitors

The Internet enhances the price competition as competitors face difficulty to keep proprietary rights which reduces the distinctiveness of products. It also widens the geographical boundaries of the market resulting in higher number of competitors.

In conclusion, do not depend solely on the internet and leave the traditional ways of competing but instead use the internet as a complement to traditional methods and focus on the strategy to differentiate and sustain competitive advantage.

To read the article yourself, click the link below:

http://hvass.nu/s2/artikler/teori/Misc/porter.pdf

Apple iPOD/iTune Canvas

Here is a business model canvas I created for Apple's iPod and iTunes Business Model.

I look at all of the resources and partnerships Steve Jobs was able to convince and it's truly incredible what a great persuasive force he was. He told the music industry how to solve their problem before they even knew what to do. RIP Steve Jobs.

Click the image to maximize to your screen.

Inbound/Outbound Marketing

Can a company today survive on inbound marketing alone? Why or why not? What is the role of outbound marketing?

Should we pull customers in or push our message out?

I believe in today's market inbound marketing is the best package among marketing methods. It is generated by the onset of internet such as free tools and trials, blogs, search engine optimization (SEO) and social media sites, such as Linkedln, Facebook and YouTube. Inbound marketing produces better results because of the relationship factor, which results in higher client conversion.

The loyalty factor results in repeat sales and the implementing methods are far less expensive than outbound methods. It is highly trackable which allows you to easily adjust your method to improve results. Furthermore, there are lots of easy to use, ready-made tools for technical challenges.

Outbound marketing includes things like telemarketing, direct mail, print advertising, TV and radio and other traditional forms of marketing. The success of this marketing depends on its ability to effectively interrupt consumers. Outbound marketing doesn't work as well as it used to. That is probably because the average consumer is bombarded with anywhere from 250 to 3000 messages a day depending on how much time they spend watching TV, being online, listening to the radio or reading magazines and newspapers. Consumers are so used to these interruptions that they are already prepared to dodge them. For example, as soon as we see a popup ad, we close it or look away. Very rarely do consumers actually sit there and read them.

HOWEVER, even though I think Inbound marketing is superior, I do not feel that it can stand alone. If we rely on inbound marketing alone, we will sacrifice the traditional consumers that best respond to traditional forms. In any marketing campaign we need to decide what target market we want to focus on. Once they are identified, we need to understand how they behave as consumers and what forms of marketing are appropriate for those specific consumers.

Also there are some instances where inbound marketing will not work at all. For example, with a brand new product that no one has ever heard of, people are not going to be searching for it and therefore the keywords used in SEO will not be used.

Here's a website with a ton of links to great articles on inbound marketing, click away:

http://www.hubspot.com/inbound-marketing-hub/

RIP Steve Jobs

I consider Steve Jobs to be the best leader of my generation. After writing a post on my leadership style I thought it was only fitting that I review Steve Jobs as a leader. My only hope is that I can be even 1/10th the leader he was.

Let’s first discuss Steve Job’s personality and how it helps him be a leader. His MBTI type is probably an ENFP. This type of personality is shared by many energetic and enthusiastic leaders. The benefit to this personality is that they can inspire employees. This trait is apparent in his public appearances. It’s challenging to get people working with enthusiasm unless their leader is just as excited and lets everyone know that. His magnetism has helped him as a leader in negotiations, as seen in his business agreements with record labels and phone carriers. His charm, charisma and ability to captivate a crowd have allowed him and his company to attract followers. This also leads him to produce great product introductions, which have often been characterized as a mix between theater and infomercials.

Now I'm not saying he was a perfect leader. He did have his flaws. He was an elitist and narcissist. It’s been said that he thought others were bozos and is why he made his products so easy to use. This arrogant way often turned his followers against him and lead to resentment and conflicts in the organization. However, it’s this confidence which translates to a belief in his ideas and products. This is convincing to employees and also creates confidence in consumers of their products.

He was also characterized as being obsessive, controlling and a perfectionist. His obsession might have lead him to lose site of the big picture and the importance of picking the right battles. It could have become exhausting for his staff to live up to such high expectations which may have lead to turnover or low morale. This was apparent in his ongoing pursuit of excellence and has led him to create a seamless, end-to-end user experience in his Apple products. He controlled every detail and aspect of the customers’ experiences. He wouldn't settle for second best and created a good standard for his company so that they did not put out products that were below expectations.

Steve Jobs was also known for being aggressive, his bad temper and little patience or people skills. Many high achievers often lack social skills, politeness or being tactful. It’s funny that he was a control freak yet was uncontrollable. It was this fact in the end that led to him to being kicked out of Apple. However, he mentioned in a commencement speech at Stanford that it was the best thing that had happened to him and led him to become more human when he returned to the company 15 years later.

His most impressive leadership role, was that of innovator. He had a passion for improvement and an obsession that is “product perfection”. If it’s wasn't perfect, he changed it. He changed society by following his own passions and personal experiences. He hated the heavy and hard to use phones that were available at the time so he invented the iPhone. He had playfulness, curiosity and imagination that made him question how things were and envisioned a better way. He trusted his intuition. This led him to follow ideas that others consider unconventional.

In conclusion, Steve Jobs had many great personality traits that helped him as a leader, especially his enthusiasm, persistence, charisma and magnetism. He changed the world with his visions. My goal is to learn from the best!

RIP Steve Jobs

Leadership Style

What is your leadership style? How will that affect how you grow your new business team?

Generally my leadership style is Participative. There are two other styles that I use, Delegative and Authoritative but I mostly gravitate to participating. I always accept suggestions from other team members and encourage their participation. However, in the end I believe the decision needs to be finalized and communicated by the leader. I understand that I'm not an expert in everything and the only way I'm going to make the best decision is by having feedback from those that are closest to the problem.

I think my leadership style is going to benefit my new business team. I will to make all the decisions on my own. Instead I'll get my team members involved in the decision making process. This will empower and motivate all group members and will encourage them to participate and provide suggestions and solutions.

Here are some other thoughts on leadership:

I know that a great leader is not born one, but instead works hard to develop those skills. It’s important to take time away from a busy life to self reflect and to identify areas of improvement. That’s the only way that they're going to improve these skills and become a better leader.

There are a lot of educational materials on leadership out there. It's important to take the time out to continue learning about leadership. As a leader I see that I’m assertive, that I’m charismatic and that my strengths are in my communication with others. I’m able to relate to others and develop strong relationships. I also realize that I need to work on my conflict management skills. I am very quick to put my needs second to others. I discovered what my MBTI is and how to identify the MBTI personality of others. I noticed that I’m a great team player. I know that this is partly because of my conflict management style of accommodating, which leads me to put my individual work aside to ensure that the group work is completed.

To learn more about different leadership styles, click the link below:

http://psychology.about.com/library/quiz/bl-leadershipquizb.htm

MBTI

I searched online for further information on learning styles and it kept bringing me to MBTI quizzes and styles. I was intrigued so I read on. I decided to take a quiz to see what type of MBTI I was and this is what I found.

After making an initial self assessment of myself, taking the MBTI quiz and researching MBTI, I found that my personality type is ENFJ, which is commonly referred to as “The Giver”. I am very action oriented and get discouraged if I’m not able to finish the items on my To-Do list. In social settings I am very outgoing.

The only area that differed from my own assessment was the “Perception of Stimuli” variable. Initially I thought that I preferred to process information using the Sensing preferences. This type has a tendency to focus on details, facts, directions and repetition. I think the reason I came to this conclusion was that most of my jobs were in the finance and accounting industry, which encouraged me to use many of these traits. I struggled with this conflict but realized that although this is what I did everyday, it was not my passion and I didn’t enjoy it. What comes easier to me are actually the traits of Intuition (N), specifically, Future, Imagination, Innovation, Inspiration and Change.

I think it's important to know what MBTI's you have on your team so you can deal with them in an approach that works best with them. As we learned in the "Opposites Attract" article, it is beneficial to match diverse personalities so that there is better innovation. So in a group setting, if each of us has a unique MBTI, this will lead to interesting conversations and a mix of ideas. If most of the members are extroverted, we can expect that there is going to be a lot of sharing of ideas and information. Furthermore it would make it easier to get team members involved.

Here is a summary of some of the MBTI personality traits:

• “Inspirer” - warm and motivates people.
• “Duty Fulfiller” - careful observer.
• "Executive" - likes to make decisions quickly, Natural leader.
• "Performer" - very observant to the needs of others.

For further information about MBTI click the link below:

http://www.personalitypathways.com/type_inventory.html

Learning Styles

We talked about learning styles during the residential Saturday class yesterday. We learned that there are basically four types of learning styles:

• Quick Start
• Fact Finder
• Implementer
• Follow-Thru

It's important to know what styles your group is made up of so that you can adjust the way you deal with them in learning new roles or working on new tasks. I'm generally a Quick Start kind of person. When I have a new task that I'm excited about, I want to just right in, forget the details! Yes I already know the drawbacks here.

I'll usually become quickly overwhelmed. At that point I borrow from some of the other styles, especially the Follow-Thru style. I'll research the problem, make a priority list using Microsoft Project, assign the tasks and become a pest until the project is completed. I think it's really important to understand the styles and preferences of all your business partners so that it's a more effective relationship.

TRIZ40.com

I visited the website TRIZ40.com and, I have to say, at first I had no idea what it's purpose was. The main page has very small, dull text that makes it very hard to read. Advertisements take up half of the page and there are no big signs that indicate it's function or purpose. I mean even their name is unclear. TRIZ?! What's TRIZ?! Is that a play on the word Quiz? Maybe. But that's not something people would instantly think of when they see the name TRIZ.

So after spending more time experimenting with the site I realized is was tailored to engineers so I didn't feel so bad that it was way over my head. I mean I'm a business gal not an engineer. The website had different pages offering assistance. One was a patent look up and another was a Matrix or database of known solutions to help overcome contradictions found in engineering. This page was really confusing. On the vertical column is a list of features and you're supposed to pass the mouse over the numbers on the horizontal line to read what principle to use. I have to admit it was like reading in a different language. I did not understand it at all. Where are the engineers in the group? Could someone explain what this means?

Ok so then I went to the other page that listed the 40 principles. Yes that's where the number "40" comes in. Then it started to make much more sense. These were inventive and creative principles that could be used by anyone, not just an engineer.

Here is a sample of the principles:

1. Segmentation - Divide an object into independent parts. - Example - Replace a large truck by a truck and trailer.
2. Taking Out - Separate an interfering part or property from an object. - Example - Use the sound of a barking dog, without the dog, as a burglar alarm. (Love this)
3. Feedback -Introduce feedback to improve a process. - Example - Use budgets as measurements used to decide when to modify a process. (Make perfect sense)

At first I wasn't sure what the site was for now I can see it's benefit. I can see how it can be applied to creativity and innovation. Some of these concepts can be used in brainstorming and developing ideas and prototypes for a product. Someone who is at a standstill and doesn't know how to address a specific problem their company is facing can look through these principles and these examples to get the mind going and thinking differently.

Opposites Attract

I read the article "Opposites Attract" and the beginning of "Creative Priority", which both talk about Jerry Hirshberg, the founder of Nissan Design International. He discusses his experience in using "Creative Abrasion" and "Hiring in Divergent Pairs" and how it's contributed to his success. This led me to consider how this approach could be applied to the company I work for.

I'm currently working with a non-profit organization that promotes the Portuguese Language and Heritage in Rhode Island. There is very little diversity in the organization from every angle. When we look nationality, there is almost zero diversity. All of management is from Portuguese decent. Some were born in the USA, Portugal, Mozambique, Angola, Acores, Madeira and Cape Verde, but in the end everyone's family was originally from Portugal. Now from an age standpoint almost all are over the age of 50. There are very few that are younger. Another issue is that there are very few women involved in management. There was once a woman president of the club and last year I was the VP but other than that leadership is primarily male.

Hirshberg encouraged hiring be done in pairs. So one position would be filled by two people, specifically two people that are very different. It's almost like a corporate buddy system. Last year we actually had this but it wasn't done intentionally or for Hirshberg's reasons. My father, was elected President of the club and he so happened to name me his VP. This decision was made because It would be easy for me to support him because I was always around. But it actually ended up working out much better than we could have anticipated. There were many benefits to this. We came from two different "solar systems" as Hirshberg calls it. My father, a 61 year old, organized, retired man from Portugal with decades of manufacturing management experience. Myself, a 27 year old, financial analyst born in the USA. The biggest difference was that I was young and that I am a woman. Just these two differences created the biggest benefits.

It was clear that our thoughts would be very different. He pushed to keep the older male members happy while I strived to bring in younger blood and to provide activities for women in the club. With this relationship we were able to create the very first website for the club along with a first time ever social media presence. We were able to do this before most of our competition and brought more life to this 90 year old organization. We also created a zumba fitness class that is now offered four times a week to the women members of the community with over 60 women participating in each class.