1. Identify an organisation that has developed a successful position because of innovative leadership
The series of innovative strategies that assisted in catapulting Amazon among the world’s innovative companies include the following: (1) offering commission-based services to buyers and sellers of used books; (2) opening access for continued business to third-party sellers; (3) web-services platform; (4) producing and marketing the e-book reader, Kindle; and (5) “by thinking of an important unserved or underserved job that customers want done and then coming up with a well-defined value proposition to address that job, however foreign to your current offerings that may be” (Johnson, 2010, p. 1). The leaders of Amazon, its CEO Jeff Bezons and members of the executive management team, including David Limp, ensure that creative thinking and innovative strategies are continually evolving in the organization.
The participation of Limp as an innovative leader of Amazon directly assisted its CEO Jeff Bezos through encouraging creative thinking and reflective meetings. As
shared by Limp, “Amazon’s approach to new devices has been highly effective, leading to products like media player Fire TV and the company’s first smartphone, the Fire Phone, in the last year, Limp oversaw the development of both products, the latter of which took four years to bring to fruition” (Next Gen Innovators 2014, 2014, p. 4). From the disclosed information, it could be deduced that the fruits of innovation take time to flourish.
Amazon indicated that their focus on the customer, in conjunction with tapping opportunities in the global environment, enabled the development of innovative strategies a continuing and evolving concern. The organization’s official website revealed that drivers of innovation included content creators, web developers and services, as well as the commitment to innovation: “Amazon’s evolution from Web site to e-commerce and publishing partner to development platform is driven by the spirit of innovation that is part of the company’s DNA” (About Amazon, 2014, p. 1). The organization is always on the look out for opportunities in the external environment through partnering with other business enterprises, as well as tapping new clientele. The wealth of opportunities online was used as the medium of transformation which significantly assisted Amazon in consistently being included among the world’s most innovative companies. It only proves that through innovative leaders, organizations are steered into success for delivering products and services that meet the client’s changing needs.
2. Identify organisations that demonstrate the differentiation element of the Porter (1985) model.
According to Porter (1990), there is a need for organizations to differentiate themselves from others to establish competitive advantage. The differentiation strategy was described, to wit: “differentiation could be based on the product itself, the delivery system by which it is sold, the marketing approach, and a broad range of other factors”
(Porter, Competitive Advantage: Creating and Sustaining Superior Performance, 1985, p. 14). As such, Shepard (2014) identified twelve (12) organizations which successfully applied the differentiation strategy to succeed in their respective fields of endeavor. These organizations are enumerated as follows: Lush, Airstream, Oscar Health Insurance, T-Mobile, Whole Foods, Client Heartbeat, Zendesk, Yoh, Four Quandrants Advisory, the Middle Finger Project, Inbound- Hubspot, and Go Inbound Marketing (Shepard, 2014).
A closer evaluation of these organizations revealed that they were able to successfully differentiate themselves from competitors through reasons that range from: understanding their customers, extending customer service beyond what competitors provide, as well as offers high quality products in vibrant designs, features, and functionalities, among others. For Lush, it was revealed that one of the appreciated differentiation strategy was being “selfless with their products - offer free samples and in-store trials on nearly everything” (Shepard, 2014, p. 1). For Oscar Health Insurance, Shepard (2014) disclosed that the company “uses bright visuals, large short copy, and a parallax scrolling site to make digesting information easy on desktop, mobile and tablet” (p. 1).
In addition, other techniques that enabled these organizations to differentiate include being transparent as perceived by the customers, as well as using endorses who are experts in their respective fields of discipline who illuminate customers on the products or services being offered. For instance, for Inbound-Hubspot, “Martha Stewart, Dharmesh Shah and Simon Sinek are some of 2014’s keynote speakers” (Shepard, 201, p. 1). In addition, for T-Mobile, the company allows “customers to bring in unlocked phones to switch to T-Mobile” (Shepard, 2014, p. 1).
Their competitors could easily imitate these strategies; yet, these organizations have delivered value and genuine customer service that have already exuded core competencies and competitive advantages in their respective fields of endeavors. As such, using similar differentiation strategies would not work as effectively as being pioneers in their implementation.
Another famous organization that was noted to have effectively applied product differentiation is Apple, Inc. The company manufactured a number of firsts in the market: the Newton (1993), iMac (1998), Powerbook and iBook (1999), iTunes (2001), iPod (2001), flat-panel LCDs for desktop (2002), improved notebooks (2003), MacG5 (2003), and of course the iPhone (2007) . Although a lot of competitors tried imitating Apple’s products, espeically the iPhone, they could not replicate the product in its entirety due to the expertise of Apple in both software and hardware features . From the perspective of Timothy D. Cooke, the current CEO of Apple, he revealed that “Apple is in a very unique, and, in my view, unrivaled position because Apple has skills in software, in hardware, and in services” (Dediu, 2013, p. 1). Likewise, the organization strengthened their patents and copyright conditions, especially in applications on the iPhone which prevented users from availing of applications outside the Apple umbrella.
All of these organizations have exhibited their innate abilities and skills in applying Porter’s differentiation strategy. From the techniques used, it was evident that these organizations have successfully steered their organizational performance to unprecedented heights due to the differentiation strategies that separated them from the rest. By enhancing their strengths and core competencies, these organization ensured that the products and services being offered catered best to the distinct needs of their target clientele.
3. Identify an organisation that has taken decisions to grow or adjust its portfolio position
An organization that has taken decisions to grow or adjust its portfolio position is Nokia. According to reports, Nokia sold its handset business to Microsoft for $7.2 billion in 2013 (Surowiecki, 2013). The move was urgently pertinent; otherwise, Nokia would have seen its demise. Surowiecki (2013) revealed that “what happened to Nokia is no secret: Apple and Android crushed it” (par. 2). It failed to make the necessary adjustments in redesigning their strategies when the iPhone and the smartphones started to emerge. At the root of the dilemma, Surowiecki (2013) explained that the inability of Nokia to ride the bandwagon was its limited expertise in the software competencies. Accordingly, “Nokia was, at its heart, a hardware company rather than a software company—that is, its engineers were expert at building physical devices, but not the programs that make those devices work. In the end, the company profoundly underestimated the importance of software, including the apps that run on smartphones, to the experience of using a phone” (Surowiecki, 2013, par. 3). Therefore, the decision of Nokia to sell the devices and services business to Microsoft was deemed a strategic move to salvage its brand name and innovatively produce products that cater to the changing demands of a wider range of clientele. Microsoft has the expertise, core competencies, skills set, and innovative talent to boost Nokia’s brand image in the devices market.
In fact, only after less than a year since Nokia sold the devices and services portion to Microsoft, Warren (2014) reported that it would launch its first device, the N1 Android tablet. The product is allegedly similar to the iPad mini in physical appearance and features. Likewise, recent reports indicated that Nokia partners with other third party experts to complete the device. As noted, “Nokia is partnering with Foxconn to build the N1, licensing the industrial design, Nokia brand, and Z Launcher software to the device maker. That’s not a surprise move given the company’s clear intentions to enable third parties to build products with the Nokia brand” (Warren, 2014, par. 6). The adjustment in the portfolio position was deemed to be crucial for the survival and continued sustenance of production and operations of the Nokia brand.
Concurrently, Nokia was also reported to retain three (3) business units: “its network business, formerly known as Nokia Siemens Networks — and now, wholly owned by Nokia , its biggest source of revenue — as well as Nokia's Here location and mapping brand , and a newly formed business called 'Advanced Technologies', home to Nokia's CTO unit and the IP team” (Tung, 2013, par. 4). It is therefore commendable for Nokia to have gained the necessary momentum to admit that significant repositioning and urgent changes in porfolio positions are required. Further, by partnering with experts in identified fields of endeavors, Nokia has enabled the integration of core competencies and strengths of their partners, particularly of Foxconn, to call in the shots. As emphasized, “the new Nokia is also a custodian rather than an owner of its own brand, as it looks to rely on companies like Foxconn to maintain its high reputation for quality. It’s a familiar name playing a whole new game” (Savov and Warren, 2014, p. 1). In sum, Nokia is a perfect example of an organization that recognized the need for a signficant change in its portfolio position through making a strategic move of partnering with larger organizations with proven expertise in similar endeavors. The move was deemed relevant to adapt to the ever changing external environment on a more global sphere.
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