The Environmental Systems Research Institute (ESRI) is one of the leaders in the high-tech market with its GIS software, ArcInfo launched in 1980s. The company managed to succeed without involving extra venture capital or going public. ESRI’s success was based on the classic smart business practices and providing their customers with what they really needed (Mohr, Sengupta, & Slater, 2010, p. 495). Novartis is as well one of the leaders in the innovation market, but of the other industry. The company is named to be the third largest pharmaceutical company by sales and continues to grow (Mumenthaler, 2009, p.4). Its success lies under the open innovation approach adopted for each and every new product developed by the company.
Hereafter, both companies achieved their high positions by following the great ideas and a desire to satisfy clients’ needs rather than shareholders’ interests. Understanding of how and why customers make purchase decisions for high-technology products and innovations is paramount for the company’s strategy to be truly effective; and both firms performed this understanding in their actions (Mohr, Sengupta, & Slater, 2010, p. 230).
However, ESRI faced some difficulties in the GIS market, as rapidly growing demand in 1980s boosted the development of companies with similar products. In terms of heavy competition and fast developing technologies, already in 1990s market share of the firm depended on its ability to follow main tendencies. Thus, Microsoft took leader’s position, while ESRI lost theirs. This mainly occurred due to the fact that ESRI focused on their sales and market share, which they decided depended on the desktop features (Mohr, Sengupta, & Slater, 2010, p. 496). Meanwhile, Novartis kept their direction on developing and testing new drugs, as they believe the company should “follow the science, not the financials”.
References
Mohr, J., Sengupta, S., and Slater, S. (2010) Marketing of High-Technology Products and Innovations. 3rd ed. Upper Saddle River, NJ: Pearson Education, Inc. ISBN-13: 978-0-13-604996-8
Mumenthaler, S. (2009) Open Innovation in the Pharmaceutical Industry: The Case of Novartis. UNCTAD. Available at: http://unctad.org/sections/wcmu/docs/c1mem1_p13_en.pdf
Response to Jacquelyne Millender
Novartis and ESRI were truly leaders in the market, however, ESRI has lost its positions since 1990s. Thus, I do not agree it can be named an industry leader nowadays. Nevertheless, both companies definitely show similar approaches to the innovation process. Adoption of new technologies and orientation on the scientific development rather than on financial benefits or market trends is a common feature for Novartis and ESRI. Novartis still invests lots of its resources in research programs to have better understanding of diseases, so that to produce the most effective drugs (Novartis, 2016). This defines the company as an effective high-tech firm, as its marketing strategy has a solid understanding of the target customers’ needs and pains (Mohr, Sengupta, & Slater, 2010, p. 230). Contrary, ESRI struggled with fighting for the market share in terms of developing new demanded and profitable desktops. Which in turn weakened company’s position and forced ESRI to cooperate with its competitors.
References
Mohr, J., Sengupta, S., and Slater, S. (2010) Marketing of High-Technology Products and Innovations. 3rd ed. Upper Saddle River, NJ: Pearson Education, Inc. ISBN-13: 978-0-13-604996-8
Novartis. (2016). Our process. Drug discovery and development process. Available at: https://www.novartis.com/our-work/research-development/our-process
Response to Claudia Trejos
Definitely, ESRI can be named a pioneer in the geographic information software. The company was driven by an idea to develop GIS technologies at the most proficient level, which made it attractive to other companies and governments. However, it lost the very moment when Internet technologies made many services easily accessed for every average customer; hence new market demanded new user-friendly and simple in use technologies. Once ESRI stopped discovering market needs and focused on their market share, they lost a competition to Microsoft and Google, who offered an access to the updated GIS for free to anyone, who had an internet (Mohr, Sengupta, & Slater, 2010, p. 496). Instead, Novartis still remains client oriented and does everything to be one step ahead in technologies compared to other pharmaceutical companies. Its main advantage is that company’s management never tends to satisfy shareholder’s interests prior to the clients’ needs (Gwynne, & Gobble, 2011). Hence, I absolutely agree that their aim to produce the best drugs at first shot rather than having to reproduce it is one of the stages of the effective strategy.
References
Mohr, J., Sengupta, S., and Slater, S. (2010) Marketing of High-Technology Products and Innovations. 3rd ed. Upper Saddle River, NJ: Pearson Education, Inc. ISBN-13: 978-0-13-604996-8
Gwynne, P., & Gobble, M. M. (2011). A Different Approach to Drug Discovery. Research Technology Management, 54(4), 5-6 Available at: http://web.a.ebscohost.com.ezproxy.saintleo.edu/ehost/detail/detail?sid=5349cbd4-f687-4164-9fd5-43f311d0d263%40sessionmgr4007&vid=17&hid=4207&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=62571613&db=bth
