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However, companies have to adjust to the times, and DEC being unable to was, gradually overcome by its rivals.
DEC can teach us various lessons but one such lesson is that of Trialability - namely, that new ideas that are broken up in installments will more readily be realized. DEC was successful, precisely because it split its program into two phases. Doing so made it trialable which represented less uncertainty to clients and to the company itself.
Opening up innovation at P&G
Tags: Diffusion; external technology; marketing; compatability; mergers; licensing; spin-offs.
Proctor and Gamble devised an innovative way to spin-off or diffuse its innovations.
After having slipped and plunged in the late 1990s and in the early years of the millennium, to some of the biggest declines ever, P&G introduced a new CEO, A.G. Lafley, to modify their direction and to change their forecast. Lafley and Gil Cloyd, P&G's chief technology officer, opened their innovation process to external sources of technology, i.e. receiving half of their ideas from the outside, and, in order to do so, they developed a special research and development team.
Their research team focused on compatibility of external technology and that too can explain their success, for compatibility, as Rogers (1995) explains, is one of the key components of successful innovation. Innovations have to be perceived as being consistent with existing values, past experiences, and needs of potential clients. Approximately, 35% of P&G's most successful...
Examples include Olay Regenrist, an anti-wrinkle cream as well as Swiffer Dusters, a household cleaning product, and the Crest Spin Brush, a battery-operate toothbrush that alone generated $200 million in sales during its first year.
The research team, devised by P&G, structured itself in the following way: one part scouted for new ideas, whilst another part actively marketed that idea. In this way, they circumvented two of innovations' most significant problems which are (a) rising development costs, and (b) increasingly shorter product life cycles.
Relying on outside ideas saves the company time and money, also allowing the company to extend and expand itself and to participate in other segments through licensing feeds, mergers, and spin-offs. These diverse streams of income broaden P&G's equity, making innovation all the more accessible and attractive to the company.
References
Lefler, P. When DEC was the king of innovation. Customer Think.
http://www.customerthink.com/blog/when_dec_was_the_king_of_innovation
Plantes, K. A compelling example of business model innovation: Finfrock Industries
http://www.innovationtools.com/Articles/EnterpriseDetails.asp?a=640
http://www.sopheon.com/NEWSEVENTS/inKNOWvationsNewsletter/ReadFullArticle/tabid/414/ArticleID/91/CBModuleId/1926/Default.aspx
0 technologies ((Wirtz, Schilke, Ullrich, 2010) Heavily reliant on a broad range of integration points throughout an enterprise, creating a real-time information network using collaboration technologies including Facebook-like applications (Salesforce.com Chatter) Comparable in design objectives to the structure of the knowedlge-sharing ecosystem; yet this business model is based on real-time social media data and collaboration Ideal for large, knowledge-based businesses that are growing rapidly; perfect fit for new business ventures based on consulting
" The foremost risk involved with implementation of the innovation is its rejection and for that matter, its failure. What if it does not work? What if it is not accepted? What if a better alternative is available? What if it is not cost efficient? What would be the correct and most suitable time to make the innovation public? There are many such questions associated with the implementation of innovation process. The risks involved are, namely,
Taken together, all these factors influenced by the stage a product is in relative to the industry lifecycle; influence the business model's profitability. Overall this factor influencing a business modes' profitability is the stage in the product lifecycle a product is relative to the industry. Another significant series of factors are the extent of the supply chain integration, supply chain management and supply chain planning the company has engaged in.
The lifecycle model is well-attuned to those product areas that have rapid product lifecycles and the need to continually bring new innovation into key markets. The lifecycle model of creating new ventures looks to capitalize on factors that will force a business to ascend or grow quickly over time. This is the case with Internet start-ups and the rise of e-commerce for example (Shi, Manning, 2009). The learning model
6. Business Model Evolution As the company's 2008 annual report points out, the company's business model is focused on ensuring the appropriate instruments that can help the consumers "capture, store, process, share, print and view" information. From that perspective, one can understand the core of the HP business model. However, in its medium and long-term strategy, it also needs to consider an additional factor that is likely to have an impact on
Of all future directions, the communications hub seems to make the most sense. Summary What makes Google such a powerful business model is its ability to translate customers' needs into technology that can be used to generate advertising revenue. Google's highly unique business model resists competition and being treated as a commodity as a result. What Google does very well is listen to customers, no matter how they choose to communicate