Introduction
Timberland is one of the leading manufacturers of high-end outdoor footwear in the global market. Founded in 1952 in Boston, Massachusetts by Nathan Swartz, the company has registered impressive growth and its operation has gone beyond the United States (Kanter and Rafaelli, 2015). It has manufacturing plants in the United States and China. It has also established regional centers to facilitate the effective retailing of the products. In the Middle East and North Africa region, the company has a regional office in Dubai. The offices, located at the Dubai Mall, not only acts as the firm’s leading regional retail outlet but also the center where the firm’s activities are coordinated.
In the footwear industry, this company faces stiff competition from various regional and international companies keen on taking advantage of the growing market in the region. According to Herve (2016), numerous Chinese companies have come up with products that offer direct competition to leading footwear companies all over the world. Most of these Chinese companies can afford to set relatively low prices because of their reduced cost of production, creating massive pressure on their rivals such as Timberland to employ innovative strategies to achieve the desired success. Jeff Swartz, the chief executive officer of Timberland, and Ken Pucker who is the chief operating officer have been keen on promoting innovation within the firm as a way of overcoming various challenges that this company faces in the regional and global markets. In this paper, the focus will be to discuss innovative strategies that the company is using to overcome the challenges that it faces in the market.
Issues Facing the Organization
Timberland’s operation in the United Arab Emirates and the regional market has received relative success. However, the company has been facing numerous issues that affect its profitability. One of the main issues that this company faces in the country is stiff competition. Although the company has developed a reputation as one of the high-end outdoor footwear brands both locally and globally, other companies have been making inroads into the local market. In the boots segment, the primary focus of the company, numerous market rivals have emerged. The Red Wing, R.M.Williams, Tricker’s Boots, and Fracap are some of the primary competitors in the local market (Varbanova, 2013). These companies offer quality boots that serve the same purpose as the boots sold by Timberland in the local market. This firm also has to compete with top footwear brands such as Adidas, Puma, and Nike that offer a wide range of shoes. The changing tastes and preferences in the market are also redefining the products that this company offers to the customers. According to Morden (2016), emerging trends are redefining products that customers desire. Successful firms understand when it is necessary to adjust the product based on the emerging market needs.
How the Issues Can Be Solved through Innovation
The problems that Timberland faces in the market can be solved through creativity and innovation. The chief executive officer and chief operating officer understand the relevance of embracing innovation as a way of overcoming these problems. That is why they have come up with the concept of Invention Factory (IF). This new concept is meant to take this company to the next level where it will not only rely on fashion to get a competitive edge over its market rivals. It seeks to come up with unique products that serve their functions in the best ways possible while at the same maintains the class that the brand has been known for over the years.
Morden (2016) explains that when managing the problem of competition, a firm should focus on taking advantage of the rivals weaknesses while at the same time managing its own weaknesses. Herve (2016) describes the strategy as attacking and defending at the same time. The strategy ensures that a company protects its current share but in a way that allows it to attack the market share of its rivals in the market. Using the Invention Factory concept, Timberland has committed to embracing innovative ideas to develop superior products that can outsmart those of rival companies. The company will be able to maintain the image of its brand in the Emirati and regional markets as that which epitomizes top quality.
The changing tastes and preferences in the market is another issue that this company has to deal with within the market. Boots that were popular a decade ago may not be attractive to the current customers anymore. These clients constantly demand a change in the design of the shoes they buy. They want their outdoor shoes to be as comfortable as possible. They also want this company to stick to its promise of selling durable shoes with great functionality. Innovation is the best way of addressing this issue. The Invention Factory acts as a center for creativity and innovation for the firm. Once a new product is launched into the market, a new cycle of developing better products begins. At this innovation center, the company has some of the top talents responsible for developing new designs. These highly skilled and creative employees are expected to monitor emerging market trends and to respond within the right time by designing products that meet the emerging needs. At the Invention Factory, the firm also focuses on developing effective sales and marketing strategies in different markets.
As Morden (2016) explains, having top quality products in the market is just one step towards achieving success in the market. The firm must promote the brand and the product within the targeted market to convince customers that it offers the best quality. It must employ marketing strategies that customers will find appealing based on their socio-cultural practices and fashion. While promoting the brand and product in the market, it is equally important to ensure that the sale of the products is taken seriously. When informing customers about where the products are available, care should be taken to ensure that they do not find empty shelves at the specified locations. It means that the logistics department should ensure that products are delivered in the market at the right time and in the right volume. Using emerging technologies, the firm will be able to estimate market demand. The estimation is important in ensuring that only the right number of shoes is stocked in retail stores. Overstocking may lead to additional warehousing and handling costs. Under stocking may lead to customer dissatisfaction when they come and realize that the products they need are not available in the market. Innovative strategies will help address these issues.
The Innovation Strategy in the Organization
The top management unit of Timberland has introduced an innovation strategy that is dubbed the Invention Factory. According to Kanter and Rafaelli (2015), the mission of Invention Factory is “to identify and develop innovative and high impact concepts that will enhance and extend Timberland’s brand equity, foster business opportunities, and drive long-term profitability” (p. 15). The initiative is meant to address the current and future challenges that this company may face, but in a way that is in line with the history of the company. Timberland has created a name out of developing breakthrough products in various categories. It has won the trust of the college students who view its products as classy and in line with the emerging trends. It has won the trust of hikers who are interested in having highly functional shoes that can keep them safe in the woods. It has also become casual footwear among many customers all over the world. It has to keep the trend of coming up with unique products that are top of the range in the various categories.
The Invention Factory is adjacent to the biomechanics lab to ensure that the team can work together. The team of experts assigned to the factory is expected to work closely with the designers to facilitate the development of new products. The innovators at the factory are expected to come up with unique product ideas. Their ideas must be based on the market trends and changes witnessed in various regions where the company is operating. Once the idea is developed, it will be assessed to ascertain its viability before handing it over to the biomechanics lab. The designers are expected to test the new design to determine its functionality. The innovators may come up with a design that matches what customers expect in the market. However, it is the responsibility of the engineers at the lab to ensure that the final product is functional and comfortable, other than meeting the desired architecture. Several samples may be developed in the lab for testing. Once a sample is developed, it will be tested for functionality, comfort, aesthetics, and other measures before commercialization.
Members of this team were handpicked by the chief operating officer among the top talents within the firm. The reason for setting a team to be responsible for promoting innovative ideas was informed by the desire to make the products of this company unique. Instead of allowing all employees to make proposals about changes that this firm should have in its products and production systems, it considered it appropriate to have a team that is specifically meant to develop creative ideas. Besides working with the production department, the team is also expected to support the sales and marketing unit in developing creative ideas to promote sales. As Herve (2016) observes, the marketing strategies that work in the United States may not be the most effective approaches that should be used in the United Arab Emirates. Issues such as religion, socio-cultural beliefs, and trending issues within a local market should be taken into account when developing a marketing strategy. The message should be appropriate and acceptable to the audience. This team is expected to understand these facts.
How to Commercialize Innovations
According to Opazo (2016), innovations can only be meaningful if they can be commercialized. It takes a lot of time and resources to nature an innovative idea into a product that can be sold in the market. Timberland has invested millions of dollars in the Invention Factory to enable it to come up with unique products in the market. The initiative can only be financially viable if its outcome can bring financial benefits to the company. The management has ensured that its innovation is commercialized. The commercialization of the innovations is done in two different ways at this company. First, the activities at this center focus on producing new products that are sensitive to the emerging needs of customers. Members of this group are tasked with the responsibility of monitoring and evaluating the changing customers’ tastes and preferences. They are then required to design products that meet their needs.
Once these new designs are developed and approved, the last stage will be the commercialization where the firm will manufacture new types of shoes in mass for the local and international markets. The second approach of commercializing the innovation at this company is through the marketing department. Some of the creative ideas developed at this new center are meant to improve sales at this firm. The team is expected to analyze each of the global markets to understand various features and unique characteristics. Morden (2016) explains that sales and marketing strategies used in North America cannot be effective in the Middle East. The team should explain the best approach that should be used in each market. The strategies that they develop will help improve sales of the company. It will contribute to financial benefits at the company.
Operations and Managing the Innovation-Operations Conundrum
Timberland, as a company that manufactures and distributes a wide variety of outdoor footwear, has numerous operations that must run systematically to enable it to achieve its goals. The biochemical lab is expected to work closely with the Invention Factory to developed unique designs of shoes based on market research and innovative ideas that focus on delivering superior products to customers in the market. The logistics department has the responsibility of sourcing for the raw materials from reliable suppliers and delivering them to the manufacturing plants. Some of the operational activities involved in such processes included procurement and transportation. There are units assigned such vital operational activities. Once the materials are made available at the manufacturing plant, the next phase of the operation will be the production of shoes based on the designs developed by the biomechanical lab in conjunction with the Invention Factory.
Once the products are manufactured, the warehousing and logistics department is handed the responsibility of distributing them to the market. Opazo (2016) notes that it is important to ensure that the quantity of products delivered to each market is based on demand. The promotion of the company’s brand and products is another important operational activity. Each market will need unique promotional strategies as discussed in the next part of the paper. Other important operational activities include customer care management, human resource management, technology management, and corporate social activity. The management has come up with an effective way of managing the innovation-operations conundrum. Instead of promoting innovation at the department level, the firm has created an independent unit that is fully responsible for innovation. This approach makes it possible for the company to continue with its operations without disruptions as the unit tries to promote innovation.
Implications of Innovations
The innovative approach that Timberland has embraced in its operations will have significant implications on the firm in very many ways. According to Morden (2016), in a highly competitive business environment, the only way through which a firm can gain a competitive edge over its market rivals is to be innovative in its production approaches. The following are primary implications of the innovative ideas that the company has embraced:
New Improved Products
It is expected that this firm will be able to develop unique products that will exceed the expectations of customers in the market. Timberland has been known for its production of high-quality trendy boots and other outdoor footwear. The significant investment that the company has made in the Invention Factory is expected to ensure that this culture is maintained. Instead of primarily focusing on teenagers and young adults, this innovation center should help this firm to widen its scope. It should ensure that the other market segments that have been ignored for a long time are taken into consideration as a way of increasing the company’s revenues. When expanding its product line, the company should consider increasing the number of its products that target middle-aged customers. A report by Opazo (2016) shows that the number of middle-aged Emiratis is increasing rapidly and as such it is not advisable to ignore them. Through innovation, this company will be able to develop unique products that meet their needs in the best way possible.
Reduced Cost of Production
According to Morden (2016), one of the benefits of innovation is that it helps in reducing the costs of production. When a firm embraces best practices in the market and emerging technologies, efficiency will be improved. Herve (2016) argues that the manufacturing of shoes is a complex and costly process. It explains why Timberland considered moving part of its manufacturing plant to China where the costs of labor and energy are relatively lower than that in the United States. Through innovation, the cost can be reduced further. The firm can find ways of replacing human labor with machines. The benefits of using modern state-of-the-art machines are that they are always more accurate than human labor. It means that they eliminate or significantly reduce wastage in the production department. The increased use of machines also reduces the time that it takes to manufacture a unit product. Reduced cost of production means that this firm can charge competitive prices in the market without compromising its profitability.
Improved Marketing Strategies
One of the key mandates of the Invention Factory is to help this company to understand the appropriate marketing strategies in different markets around the world. Opazo (2016) argues that there is a marked difference between the socio-cultural forces in North America and that of the Middle East. In the United Arab Emirates, the majority of the customers are Muslims who strictly follow the teachings of the Quran (Varbanova, 2013). The management of Timberland at its United States headquarters must understand that this country will require a different marketing approach that is in line with the socio-cultural and religious beliefs. The market proposition that it embraces and the choice of words must reflect the principles and ethics cherished by society. The innovation center will make that possible.
How Innovation Can Lead to Change Resistance
It is important to appreciate the fact that not everyone will be pleased with the new innovative approach that the company is embracing. A section of the stakeholders may resist change because of various reasons. Some employees may feel threatened by the new approach. They will feel that once some of the systems are automated, their services will no longer be needed at the company. Because of their desire to protect their jobs, they may try to jeopardize initiatives that may automate systems in their departments.
The shareholders will need to be convinced about the financial benefits of this costly initiative and how it will enhance the sustainability of this company, otherwise they may resist this new approach of operation. They may view it as an avenue through which money is lost other than an opportunity to make more money. The management will need to address concerns of these stakeholders to eliminate change resistance. The employees should be assured that the innovative approach that this firm is embracing is focused on improving products and production methods other than eliminating them. The shareholders need to understand the significance of this initiative in improving the sustainability and profitability of this company amidst stiff market competition.
Important Changes Needed For Implementing Innovation Smoothly
The management may need to embrace some changes in its operation and workforce to ensure that the innovation is implemented smoothly. One of the changes that will be needed is regular training of the employees across all the departments to ensure that they can work effectively under the new system. The workers in the production department will need some form of training to enable them understand how to use emerging technologies that will be embraced by the firm. They will need to understand how to use tools such as Total Quality Management (TQM) to improve the output in their respective departments (Varbanova, 2013). In the marketing unit, this firm will need to introduce culture-specific training to ensure that promotional campaigns are developed with an understanding of the prevailing local forces. The planned change is designed to ensure that employees understand how to monitor and respond to customers’ needs. As such, the sales and marketing team will have to go through special training. They will need skills that will enable them to understand to interact closely with customers, especially at the points of sale, to understand their emerging expectations and factors that they consider undesirable with the current products. The message should be passed to the team at the Invention Factory so that necessary measures can be taken when designing future products.
This company will need to redefine its management approach. It will have to change from the strict hierarchical style of management to the open-door policy where employees can easily consult their superiors whenever it is necessary. Herve (2016) explains that one of the best ways of promoting innovation is to create an avenue through which employees and managers can interact easily and share ideas that can enable a firm to move to the next level in the market. Given that a team of experts has been identified to be fully responsible for promoting innovation, it will be necessary to create avenues through which these talents can interact with everyone within the organization.
They should be able to interact with junior employees to enable them understand challenges they face that may require innovative solutions. They will also need to regularly engage the top managers to explain the milestones made towards introducing new products, systems, and structures. The top management will also need to give regional branches some form of autonomy to allow them to develop market-specific initiatives other than strictly following strategies developed at the head office. However, the autonomy must be exercised in line with the company’s mission and objectives. It will be acceptance for the regional head at Dubai to adjust marketing campaign strategies based on the local socio-cultural forces, but in a way that do not deviate from the mission and vision of the firm.
Recommendations to Improve Organizational Innovation and Change
Timberland has taken a bold step in promoting innovation as a way of gaining competitive edge in the market. It has created a new unit that operates under the direct leadership of the chief operations officer to be fully responsible for creativity and innovation. It means that this company understands that one of the best ways of understanding challenges such as stiff competition and changing tastes and preferences is to embrace creativity and innovativeness. By selecting a team of highly skilled workers to be responsible for the firm’s innovative initiatives, Timberland is committed to maintaining the high position of its brand as a company that designs, manufactures, and distributes high-end shoes. To achieve the desired level of success, this firm will need to take the following recommendations into consideration:
- The top management should be ready to invest in this sustainability initiative. This new program will enable the company to remain relevant and competitive in the outdoor footwear market. It may be a financially demanding initiative, but its benefits will be felt in the long-term. As such, the top managers should not fear putting the right investment into the project.
- The team selected to be part of the initiative should be offered an effective platform through which they can interact with the top managers and junior employees. Junior employees can share with them the experiences they have serving customers and challenges they meet when undertaking their duties. The information will help the team to understand areas that need their attention.
- The firm will need to embrace best practices of some of its top market rivals in promoting creativity in the firm. Footwear companies such as Adidas and Nike are enjoying large market share in sportswear. Given that this company is seeking to expand its product portfolio scope, it may need to know what the rivals are doing fight to make them achieve such levels of success.
- It may be necessary for this company to be an innovator or early adopter when it comes to emerging technologies. It should respond with speed whenever a new technological concept emerges that may enable it achieve great efficiency in the production or marketing departments.
Method That Will be Used to Gain Access to the Organization
It will be important to reach out to some of the employees of Timberland to help in collecting the needed information about the firm and how it is coping with various challenges in the market. These employees will help the researcher to understand what this firm is currently going through and strategies that it is using to overcome various challenges that the company faces in the local Emirati market. The researchers plan to make a physical visit to the company’s premises at the Dubai Mall to have a discussion with employees in the management unit and those working in the sales and marketing department. The researchers will request the head of the regional office to approve this research before contacting other employees of the firm. The nature and relevance of the research will be explained to the manager. The researchers will also explain reasons why this company was chosen and why the top managers should not be concerned about the study. A face-to-face interview will be conducted to collect data from the sampled respondents.
Conclusion
Timberland is one of the trusted brands in the outdoor footwear market. Its boots are known to be popular among teenagers and young adults. In the United Arab Emirates, the firm is faced with a changing taste of customers. The problem is not only felt in the Emirati market but all over the world where this firm has subsidiaries. Competition is also getting stiff. This firm has to compete with traditional brands such as Nike, Adidas, and Puma as well as emerging brands in the local and global market. As shown in the discussion above, the effective way of overcoming these challenges is to embrace creativity and innovativeness. This company has developed Invention Factory as a means of inculcating creativity and innovative culture within the firm. It is keen on using the modern technologies to develop new products that meet the current needs of its customers. It has also developed unique marketing strategies to help it compete favorable in the market.
References
Herve, M. (2016). Living innovation: Competing in the 21st century access economy. Singapore, Singapore: World Scientific Publishing Company.
Kanter, R., & Rafaelli, R. (2015). Innovation at Timberland: Thinking outside the shoebox. Harvard Business School, 9(306), 1-23.
Morden, T. (2016). Principles of strategic management (3rd ed.). New York, NY: Taylor & Francis Group.
Opazo, M. (2016). Appetite for innovation: Creativity and change at elBulli. New York, NY: Columbia University Press.
Varbanova, L. (2013). Strategic management in the arts. New York, NY: Taylor & Francis Group.