Exam
Question 1
Part A
Part B
As the companies become large, the innovation is inhibited due to the culture that is developed within the organization. The businesses expanding their operations have to take care of the matters of management from many perspectives. The management has to take care of the costs of the operations as well as the competitiveness. They have to ensure that the business operations have increased efficiency. The efficiency is increased when the tasks are performed in the minimum time. The management is also concerned about their competitive position in the market. The business strives to be better off than the other players in the same industry. All these factors lead to the development of a systematic hierarchy and chain of command. The individuals are answerable about their actions, progress, and tasks to someone above in hierarchy. This setting causes diminished innovation at the individual level. The employees of the company are more concerned about their day to day activities and in the fulfillment of the roles rather than the innovation. Therefore, with the growing business, the innovative culture is lost.
Question 2
The ad is promoted the culture of a particular area (Texas)
The auto industry is a mature market and now the businesses are considering cross-cultural associations. This ad is an example of cross-cultural association of trucks with big things of Texas
The innovation in auto market is mostly sustaining and incremental
The ad focuses on the needs of individuals that have to rely on the large trucks for the movement of goods
Cultural element of large things used in Texas has been introduced in this ad.
The ad shows the sustaining innovation in the product. The company has made the product even better for the use of the customers that require large trunk size
UPS
This ad shows the element of corporate social responsibility and the care for the environment
The ad features that the UPS can analyze the supply chain operations to decrease the carbon footprint related to the movement of the goods
It is a disruptive innovation that is hybrid in nature. It is leading to the creation of new market for the products that are environment-friendly
This ad focuses on the competitive rivalry that exists between the established brands. UPS has tried to introduce the concept of green supply chain through this ad and focused that it cares for the environment
Saxenda
The ad displays the patents that the company holds. It has information about the patents and trademarks of the company
It tells that the product is the brainchild of Novo Nordisk and is protected by trademarks
The ad signals that it is the result of innovation by a joint venture and tells about some of other products of the company
It is the result of sustaining innovation that is based on the growing need for controlling obesity in the consumers
This advertisement tells in details the function and the conditions under which this medicine is used. Therefore, this ad is full of information for the consumers
The advertisement tells how and where this drug can be purchased
Question 3
(i)
Helicopter
The helicopter is an incremental innovation. It was designed to fly take off and land in the areas where the ordinary aircraft with large wings and span cannot fly. Therefore, it is an improvement in the flying products.
The helicopter is a disruptive innovation. It provided a new product solution to the problem of vertical landing. It was not based on the needs of the existing customers or the people. It was a new concept that it can fly vertically from congested places as well.
The helicopter was a new market disruptive innovation at the time of its introduction in the market. It created a new market for itself. The concept was not already present. Therefore, the customer base, market need, and the usage led to the creation of a new market for the helicopters
(ii)
ZipCar
ZipCar is a car sharing service that is an alternative to the car rentals. It is an incremental innovation as it is an improvement in the current usage pattern. The risk level attached to this innovation is not of high end. Secondly, this innovation caters to the needs of the existing customers of car rentals.
Zip car is a disruptive innovation. It created a new market, and the concept was new. Previously, the customers relied on the car rentals or the other means of transport. This innovation turned out to be a new mode of transport by sharing the cars. Therefore, it is disruptive in nature
This innovation is hybrid in nature. It led to the creation of a new market as well presented a low-cost solution to the customers. The customers can save by sharing the cars instead of separate car rentals. Therefore, it created a new market as well as presenting a low-cost solution
Question 4
Prescribing Perspective
Lessons Learned from 60 Years
The orientation of the drug manufacturers has changed from production to the marketing
The innovative drugs are delivering value to the customers.
Pharmaceutical companies are becoming profit generating businesses and pricing the products by value delivered to the client rather than the costs incurred
The rate of innovation and product development is lower in large Pharma companies
Slow innovation is defended by lobbying. PhRMA and BIO are dedicated to the protection of interests of the Pharmaceuticals companies
The trend of marketing directly to the end consumers is gaining popularity. Previously, there were many restrictions in direct to consumer marketing of drugs
Challenges faced by the pharmaceutical industry
Pharmaceutical companies are mostly publically traded organizations, and the management is concerned with the profit maximization of the shareholders
In the wake of making huge extra profits, the values of empathy for the customers are compromised or, at least, this impression is held by the customers.
It is normal to and ethical to price the products according to the popularity and demand of the products. Pharma industry when follows this approach, it faces much criticism
The direct to consumer marketing restrictions decreases the brand awareness of the pharma products among the consumers. The large pharma businesses with the help of endorsing bodies are trying to make the masses aware of the vital benefits of the products about the prices.
B. The real reasons for the Pharma merger boom
Lessons Learned from 60 Years
The article reflects the lessons learned from the pharmaceutical business in the recent sixty years in the following ways:
The growing M&A of the businesses suggests that the rate of innovation in the pharma industry is slower
The businesses tend to acquire the innovative companies with new molecular entities (NMEs) to remain competitive and in the business
The pharmaceutical industry shows a race of acquiring or be acquired. Therefore, large pharma companies are playing with their capital and acquiring the small innovative companies to remain competitive and avoid their M&A
The Food and Drug Authority has put restrictions on the advertising and had a procedure of approval of drugs for advertisement. The number of approved drugs over the last few has decreased considerably.
The market share of the large companies regarding innovation is decreasing, and these companies have R&D strategies of acquiring innovative small businesses to sustain the competitive advantage.
The research and development rate in the pharmaceutical industry is constantly declining over the recent years.
Challenges faced by the pharmaceutical industry
The challenges faced by the Pharma industry are:
They have to increase the profitability as the pharmacy companies are publicly traded
They have to meet the growth aspirations of the investors
The innovation in pharmacy industry is very expensive
New product development requires many resources
The big companies acquire small companies as the rate of product development is higher in small companies
The companies have an R&D strategy of acquiring businesses and mergers as a part of their innovative strategy
The patents of the companies are expiring making way for new businesses to enter the Pharma industry. It has fueled the M&A
Question 5
Disruptive Innovation: The pictorial shows the disruptive innovation phenomenon. The coffee shops are competing in a market and striving to be low cost by following innovative ways to reduce cost and offer coffee at decreased prices to the customers
Hybrid: The pictorial shows the disruptive innovation that is hybrid in nature. The coffee shops are focused on providing low-cost coffee but at the same time, a new market concept can be observed as well.
New Market: At the end of the pictorial, it can be observed that a shop is charging $4 for the coffee, and people are rushing towards it. It is because the disruption has led to the creation of a new market. The new market for the product where the increased price is justified by the services provided or simply due to the ambiance that the shop has provided and the sitting arrangement for the customers.
Low-Cost: The lost cost disruptive innovation is clearly evident from the pictorial. The businesses are following change to create low-cost alternatives for the products of the competitors.
Competitive Rivalry: The competitive rivalry is shown in the pictorial. The businesses are striving to be competitive and following the concept of cost leadership to win the competition and put the competitors out of business.
Product Improvement: The concept of sustaining innovation or product innovation/Improvement has been shown in the pictorial. The businesses are trying to improve their products to win the competition.
Question 6
Productive Failure
The example of productive failure from my experience and life is the way I learned how to troubleshoot Apple iPhone for the problem of software corruption. Once my iPhone got stuck into the Apple logo, and it was not working. I faced this problem for many hours and searched different ways for the solution. I talked to the Apple Support online and searched different blogs, portals, and websites for the solution of this problem. Finally, after trying different things and reading much customer reviews that faced the same problem, I was able to fix my phone. It took a whole night in finding the solution to the problem. I failed many times but each time I found the cause of the failure in fixing the phone. Capitalizing on the errors that I made in each try, I finally found a solution. I failed many times, and I consider those failures as productive ones as each failure left a lesson that I do not have to make these mistakes next time. A few months later my friend faced the same problem with his iPhone and it just took 15 minutes to solve the problem. It was because of the drill of that whole night.
