The Importance of Innovation for the Company
Innovation plays an important role in the changing nature of the music industry because at one point or another, innovation enabled the industry to tap into new market channels such as e-tailing and other websites that provides the same retail service through the Internet. In addition, innovation also opened the music industry into new possibilities in media distribution not only through CD purchase channels, but also distribution of digital contents. Technologies such as MPEG Level 3 Protocol enabled the music industry to distributed tracks over the Internet, which supersedes the conventional distribution channels and use of physical storage.
Crazy, a Process Innovation
Regarding Gnarls Barkley’s track “Crazy” that became the firs song in UK history that made it to the top based on the number of download sales. It cannot be considered as a product innovation because there are other tracks that are available on the Internet for download. Instead, the success of the track is the result of a process innovation in which the new approach in content distribution became instrumental in accumulating sales. It can be recalled that the distribution process was changed because of the advent of audio file compression and website-enabled music retailing, which is a process innovation.
The Contribution of Innovation in Increasing Market Performance
Innovation enabled the increase in market performance because during the time when music is only available in shelves at stores, the industry depends on the stores as a market of distribution. However, the introduction of the Internet and the technologies available to make digital contents transferable in digital form has created a new market segment for the industry that rivals the conventional distribution approach. In addition, viral marketing also enabled the increase in market performance across the Internet that brought changes on the way marketing, dissemination, and publicity of music is done.
The Importance of Having the Capability to Respond to Innovation
In the case study, it was mentioned that old competencies may no longer be relevant and acquiring new ones became a matter of urgency. This implies the importance of having the capability to respond to innovation. Even the biggest names in the music industry such as Sony found it difficult to stay ahead of the new entrants exploiting the potentials of economics of the Internet. The capability to respond is important because it implies that the market or organizational leadership and size are no longer an ace in the competition, but the ability to go exploit the benefits of innovation. This means regardless how prominent is an organization, but the lack of response to innovation will render them incapable of the competition.
The Four Dimensions of Innovation
There are four dimensions of innovation that can be found in the case. First is the availability of the periphery that enables any individual to acquire music sheets ad lyrics, which lowered the barriers in publishing music with the application of technology. Secondly, Activities related to journalism became increasingly open allowing every form of commentary via specialist groups to be published on the Wen as compared to the earlier practice limited only within the confines of few magazines. Third, advertising and compiling popularity charts also became open as new mediums of music distribution switched from CDs to MP3s, which the latter encompasses faster lower cost of distribution. Lastly, innovation disrupted the barrier of participating in the music business. This is because anyone can now make and share music without the complexities and cost of having a formal recording contract.
Architectural and Component Changes
The changes presented in the case can be classified in two categories namely architectural and component changes. The architectural component is the change innovation that disrupted all the barriers imaginable, which is the Internet. The advent of Internet alone changed the world and how people perceived the world because of the possibilities that the Internet can provide. In terms of component changes, the Internet served as the backbone of all innovations that came forth after its introduction in the modern world. It allowed several components of change from CD to MP3 and buying records from the Music Store to purchase via website download.
