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Innovation and the Market

Louie Borrayo

Brian Glennon

Daniel Lapikas

Jared Linscombe

University of Phoenix

PDB17BSB03

MGT/411

Dr. Jay Deb

29 January 2019

Innovation and the Market

Companies may start and seem to succeed but for the success to be sustained, innovation is necessary. This is because as time goes by things change and so does the market world people want new things that are more efficient (Frishammar, 2015). When this is not the case with a company, the CEO’s job is easy, but the company will be at the risk of failing because change and innovation are both inevitable.

One example of a company that failed to innovate and is at the verge of close down is the Kodak Film Company. There was a time that the Kodak film dominated the film industry but because it refused to innovate other companies came into the market and took over. The Kodak Film Company had the chance to be the leaders of the digital industry but was in denial that times had changed and the digital error was taking over (Frishammar, 2015). It is said that the Kodak Company is the one that invented the first digital camera, but the managers could not approve it because they were too focused on the success of the company that they missed the great digital revolution.  Kodak problem was they did not move fast enough into the digital world, which caused them to be technological discontinued. This company was declared bankrupt in 2012.  Kodak had been failing to keep up their business and profits even before the digital revolution when Fuji started doing a better job using the old technology, the roll-film business (“Barriers To Change: The Real Reason Behind The Kodak Downfall”, 2012).

Another company that went through the same is the Nokia Company. It was among the most successful companies in the early 1990s for creating the first cellular phone. Nokia was a universal leader in the business of mobile phones. When the internet landed Nokia failed to understand that data was the future. That in the future people will prefer silent communication over voice in this case text messages and emails (Frishammar, 2015). Instead of developing software Nokia focused on the hardware side with the fear that if they changed a lot the current users will get affected. They dint want to risk and lead in the change. They believed in their brand so much that they thought even if they came after others, they would take over but by the time they decided to compete with the touch screen it was too late they could not come up with products that were competitive enough to compete with the iPhone that had been launched by Steve Jobs.  Surowiecki (2013), Nokia was known as an engineering company, but needed more market savvy ideas, in order to keep up with its competition.

The other company that failed in the innovation part is Yahoo. Around 2005 Yahoo was a big fish in the online advertising sector. At the time Yahoo was only interested in becoming the media major and ignored the power of search. This company ignored the fact that they needed to improve user experience and the trend of consumers (Frishammar, 2015). Yahoo had a lot of users but was not making enough profits. The CEO’S of Yahoo was not a risk taker which led him missing out on opportunities with Google and another one to buy yahoo.

In the first company, Kodak, the innovative strategy they missed was creation of new improved products instead they focused on pushing their old product if only they would have endorsed the digital camera, they would be the leader of the film industry now. On the other hand, Nokia failed to take the risk of being the game changers and another company took over the market. Yahoo also was focused on profits and being the media giant that they forgot consumers is the backbone of a company.

Some of the innovative strategies that can be used by a company in order to stay relevant for long are as follows; developing of new products is the main strategy that can be used because people will always embrace new and improved products. Another strategy that can be used is incorporating young entrepreneurs that have innovative minds in our companies. Diversification is also something our companies are lacking. As we have seen as change is inevitable so is innovation and hence companies must innovate (Frishammar, 2015). According to Hisrich and Kearney (2014), an organization has to engage in six processes in order to maintain organization innovation to have a competitive advantage. Those six processes are: “(1) adapt to external environmental changes, (2) be customer driven and focused, (3) have flexible strategies and processes that can meet the needs and diverse requirements of customers, suppliers, distributors, regulators, and stakeholders, (4) be able to quickly respond to the fast pace of change in the environment by recognizing and taking advantage of opportunities that emerge (5) proactively meet and exceed the needs of customers in light of existing competition, and (6) actively engage in R & D to continuously prioritize the development of new products, services, processes, markets, and technologies” (2014, Ch.4).

References

Barriers to Change: The Real Reason Behind the Kodak Downfall(2012). Retrieved from

https://www.forbes.com/sites/johnkotter/2012/05/02/barriers-to-change-the-real-reason-behind-the-kodak-downfall/#b6e99d069efa

Hisrich, R., & Kearney, C. (2014). Managing Innovation and Entrepreneurship. Retrieved from https://phoenix.vitalsource.com/#/books/9781483322667/ cfi/6/24!/4/2/4/2@0:0

Frishammar, J. M. (2015). When product meets service: Digitalizing industrial innovation. Erricsson Bussiness review 2.

Surowiecki, J. (2013). Where Nokia Went Wrong. Retrieved from

https://www.newyorker.com/business/currency/where-nokia-went-wrong