Computer Company’s Innovation Plan

Executive summary

Organizational performance requires continuous innovative planning processes to enhance product development and resource management. In the analysis of a multinational computer company that manufactures and sells hardware and software devices, this report exposes innovation readiness using innovation diagnostic diamonds (IDD). IDD is an important tool that facilitates the analysis of organizations’ innovation readiness and guides in designing new procedures to enhance market competition. IDD analysis tool measures an organization’s innovation readiness using four parameters, namely, market, innovation, strategy, and resource indices.

From the IDD analysis, the computer company had the highest score in innovation, followed by strategy, resources, and market with scores of 9, 8, 7, and 6 respectively. In this perspective, the organization must focus on incorporating the consumers in product development to improve its market competition and growth.

Introduction

The innovation plan describes a structured approach for assessing factors that influence business activities in a given industry and the adoption of strategic steps to increase the success rate of growth initiatives of an organization. Organizations enhance their market performance through the innovation of new feature products, which significantly influence their competitive advantage, increase market share, and facilitate sustained growth (Cimatti & Campana, 2016).

The process involves exploring new opportunities and focusing on the development of high-quality product features. Firms adopt different strategies in enhancing their innovative capabilities. Innovation diagnostic diamond (IDD) is one of the sophisticated tools for research analysis and ideation utilized by corporate managers in developing innovation processes. It focuses mainly on four elements, namely, strategic processes, market segment, innovation, and organization’s resource potential. Assessment of these four factors highlights the dimensions of the innovation process and reveals institutional factors that stipulate the capabilities required to manage innovation across the organization.

Fathali (2016) argues that the innovation strategy of an organization is influenced by resource availability and the adoption of advanced technology in production, which have a positive impact on the overall organizational market share and profitability. Therefore, this report analyses the innovation readiness of a computer company using the IDD framework and provides recommendations on how to improve its innovative performance.

Strategy Index

From the IDD analysis (Appendix B), the diagram indicates the organization’s score of 8 on strategy from the ten-question items. It is therefore apparent that the organization has adopted a successful approach to strategy development through observation of the formal process requirements. The adherence to a formal approach in product development is a critical factor that significantly influences the success of a product in the market (Robbins & O’Gorman, 2016).

Thus, the adoption of formal processes guides the organization’s steps of product development through the implementation of best practices that help understand the target market, opportunities, threats, and regulations essential in successful product commercialization. The organization has a robust business plan that guides its business activities in the industry. The analysis indicates clear and high organization’s attention towards customer analysis, assessment of suppliers’ influence in production, competitor response, government regulations, the presence of alternatives, and development of projected cost requirement for product commercialization processes.

However, the analysis shows that the organization has not focused on sourcing additional technical support in product development from other firms and has significantly failed to assess the threats of alternative technological innovations within the industry. This challenge of strategic planning indicates that the organization has focused its efforts on product differentiation strategy, an approach that is essential in distinguishing organization’s products from competitors’, enhancing customer loyalty, brand recognition, and competitive advantage in the market. The company’s products are non-compatible with other firms’ products thus reducing market competition.

Therefore, based on the high score in the analysis, the company has achieved a high level of innovation readiness in strategic development, an important factor in its success in continued product commercialization processes. In this view, the high score in strategy index indicates that the organization has been successful in its processes of innovative planning and product quality improvements.

Market Index

The company has the lowest score in the market index on the IDD analysis. The cumulative score on market parameters is 6. From the low score, it is evident that the company has a relatively low effort focused on exploring and understanding the industry market. Market analysis is an essential component in identifying and understanding the different factors that affect product consumption.

Rocca, Moscatelli, Perna, and Snehota (2016) hold that involvement of consumers in the product development helps organizations to focus innovation on consumer needs, which is essential in establishing customer-centric value based on business activities. As a result, great input on examining consumer needs is significant in the development of a value-addition and market competitive product. The low score on market index details that the company has less focus on involving the consumers in product development. The specific areas of focus explored in assessing consumer needs include value-addition, product pricing, customer perception, and opportunities for product utility.

Despite the significance of understanding customer needs in the business industry, the company has failed to improve its focus on customer adoption strategies of the new product, clear customer processes of product evaluation, product compatibility with the large market existing systems, and evaluation of customers’ potential to adopt the new product. These factors of customer assessment are significant in enhancing new product market success. In this view, the company has limited its focus on established customers with high loyalty on the product brand and low interest in product penetration to new customers in the market.

Based on the market index and the challenge of low market penetration processes, it is evident that the customers face high switching costs in assessing the value of the new product development while the company experiences low success in new product commercialization. Overall, the average low score of the market index parameter indicates that the company has adopted an inflexible strategic approach, which is ineffective in addressing innovation readiness towards consumer needs.

Innovation Index

Technological innovation is an essential element in service delivery, development of high-quality product features, business growth, and sustainability. From the IDD analysis, the company has the highest score of 9 in the innovation index compared to the other three elements from the ten-question item. This high score indicates that the company has concerted efforts in ensuring product improvement and industry diversification.

According to Atalay, Anafarta, and Sarvan (2013), innovation significantly contributes to the improvement of the company’s overall business performance through continuous enhancement of the production processes. The adoption of advanced technology significantly contributes to the development of products with high-quality features, which consequently lead to the alteration of consumer needs and market orientation. In this view, the high score implies that the company has placed sufficient efforts in the adoption of advanced innovative technology for new product development, which enhances the product and product-line improvement and expansion.

However, the company faces technological challenges of non-compatible product features due to the ineffective customer-centric innovation process. Customer involvement in product development is a flexible element essential in promoting innovation, a significant factor in the development of high-quality products. The flexibility approach promotes product compatibility and improves consumer satisfaction while encouraging stiff industry competition and expansion of market share. Therefore, based on this understanding of the significance of customer involvement, it is apparent that the company has invested insufficient efforts to promote customer involvement in product development, resulting in negative effects on its market position. However, innovation-readiness in the innovation index is high, an element that has influenced its leadership in the industry.

Resource Index

The company’s resource analysis involves the evaluation of assets available for use in the production and accomplishment of goals. In the IDD analysis, the company has an overall score of 7 in the resource index. This score signifies that there are moderate efforts that the company has placed in acquiring the necessary resources required for new product development. High resource investment is essential in encouraging product diversification.

The company has invested in acquiring skilled staff, physical resources, and a strong financial position. Xie, Huang, Peng, and Zhuang (2016) argue that high resource capacity promotes the growth and expansion of an organization by influencing its product research, development potential, and production capacity. Therefore, the score on resource index shows that the company has slightly adequate resources available that significantly enhances product diversification leading to customer satisfaction and a large market share.

However, the company faces challenges of ineffective strategy for sourcing external expert support for product development, inadequate supply of competencies for innovation full commercialization, and insufficient business support programs from the country governing body. The main factor contributing to these challenges experienced by the company is inflexible policies.

Restrictive policies limit the exchange process flexibility of resource sourcing that hinders the development of better performing products to much customer needs. However, an organizational policy amendment is necessary in order to promote access to these services. From the analysis, it is evident that the company has placed focus on ensuring the availability of the relevant product development resources to facilitate the sustenance of its business activities. Thus, the company’s resource index in innovation readiness is moderate indicating significant flexibility on product and market diversification that significantly enhances its business establishment and expansion.

Recommendations

The fundamental concept of improving an organization’s innovative planning relates to the improvement of the four elements of innovation planning.

  • In the innovation index, the company should strive to maintain a high score by effectively enhancing the adoption of its advanced technologies.
  • In the strategic index, the company should improve its score by adequately assessing the threats of alternative technologies and exploring collaborative product development from complimentary partners.
  • In the resource index, the management must adopt policy adjustment to allow external sourcing of competencies, expert assistance, and exploration of government programs in innovation to enhance its resource capacity.
  • In the market index, the company should target low-end customers through the adoption of a customer-centric strategy to promote product understanding, acceptance, compatibility, and product evaluation. Additionally, cost leadership is significant in targeting low-end consumers and promoting overall innovation readiness and market expansion.

Conclusion

Innovative planning is an essential process that enhances the company’s’ competitive edge, growth, and expansion. IDD analysis is an important tool for assessing a company’s innovative capacity based on four major indices, namely, market index, innovation index, resource index, and strategy index. From the analysis, the company has the highest score in innovation followed by strategy, resource, and market indices scoring 9, 8, 7, and 6 in that order.

The company has adopted a product segmentation strategy thus scoring the least in the market index. The segmentation strategy implies that the company does not focus on customer-centric production processes that target extensive market share and growth. Therefore, a policy change is necessary to accommodate the end-user in product development to improve its competitive advantage and overall market growth.

References

Atalay, M., Anafarta, N., & Sarvan, F. (2013). The relationship between innovation and firm performance: An empirical evidence from Turkish Automotive supplier industry. Social and Behavioural Sciences, 73(1), 226-235. Web.

Cimatti, B., & Campana, G. (2016). Modern industrial product development and organizational impact. The International Journal of Organizational Innovation, 8(3), 7-382. Web.

Fathali, A. (2016). Examining the impact of competitive strategies on corporate innovation: An empirical study in automobile industry. International Journal of Asian Social Science, 6(2), 135-145. Web.

Robbins, P., & O’Gorman, C. (2016). Innovation process: Do they help or hinder new product development outcomes in Irish SMEs? Irish Journal of Management, 35(1), 88-103. Web.

Rocca, A., Moscatelli, P., Perna, A., & Snehota, I. (2016). Customer involvement in new product development in B2B: The role of sale. Industrial Marketing Management 58(1), 45-57. Web.

Xie, E., Huang, Y., Peng, M., & Zhuang, G. (2016). Resources, aspirations, and emerging multinationals. Journal of Leadership and Organization Studies, 23(2), 144-161. Web.

Appendices

Appendix A: IDD Indices

Table 1: Strategy Index.

Questions Yes No Unsure
a) Do you have a formal, written business plan for your innovation?
b) Have you fully assess the bargaining power of your customers?
c) Have you fully assed the bargaining power of your suppliers?
d) Have you fully assessed the threat of alternative technologies to your innovation?
e) Have you fully assessed the reaction of competitors to your innovation?
f) Have you explored potential complimentary partners able to assist you?
g) Have you considered existing or anticipated government regulations?
h) Have you secured all necessary compliances and authorizations?
i) Have you undertaken a risk assessment in light of potential threats?
j) Have you completed a comprehensive financial model for the innovation?
Total score 8 1 1

Table 2: Innovation Index.

Questions Yes No Unsure
a) Do you have a formal process for new product development?
b) Is the generation of new innovations a major focus of your firm?
c) Could you fully develop the prototype technically without outside assistance?
d) Has the innovation been independently tested or evaluated?
e) Have you consulted an intellectual property lawyer or patent attorney?
f) Does your innovation have legally protectable patents in-place or pending?
g) Do you use confidentiality agreements before showing your ideas to others?
h) Do you have previous experience of commercialization of your innovations?
i) Do you actively involve customers in developing new innovations
j) Do you actively involve employees in developing new innovations?
Total 9 1 0

Table 3: Resource Index.

Questions Yes No Unsure
a) Do you already have the technological resources to create a prototype?
b) Do you have the competencies to fully commercialize the innovations?
c) Do you have an experienced project management team to work on the idea?
d) Do you know how to find external expert assistance if required?
e) Are staffing resources adequate for the future development of the idea?
f) Are physical resources adequate for the future development of the idea?
g) Are financial resources adequate for the future development of the idea?
h) Have you explored government assistance programs (e.g COMET, START)?
i) Have you identified sources of venture capital financing for the innovation?
j) Do you have a management board to provide guidance and advice?
Total 7 1 2

Table 4: Market Index.

Questions Yes No Unsure
a) Do you fully understand the value you will offer to customers?
b) Have you fully explored the most appropriate pricing strategy?
c) Have you researched how easily customers will understand it?
d) Will it be easy for customers to test or trial it prior to adoption?
e) Will it be easy for customers to do post-adoption evaluations?
f) Is it compatible with customers’ existing technologies/systems?
g) Have you fully examined customer perceptions of risk and cost?
h) Have you fully explored the opportunities it offers customers?
i) Have you previously collaborated with customers over innovations
j) Is there a customer ready to adopt this innovation?
Total 6 2 2

Appendix B: IDD Diagram

IDD diagram showing results of IDD indices.
Figure 1: IDD diagram showing results of IDD indices.