1. Do not innovate. Build a product or service. Innovation happens.

A strategy to make products to have eureka moments will not succeed. Instead focus on building the product or service and a eureka moment might just happen.

2. Do not fear failure. Discuss it.

Apple’s Apple III launched in 1980 was a commercial failure. General Electric Co. (GE) shares its best practices across its many units and officially discusses failures as well.

3. Be aware of market, product and technological developments.

Orkut, the social network by Google did not catch up with Facebook applications and platform.

4. Patience is rewarding.

Dennis Crowley, founder of Foursquare took about five years to come up with the idea and build the service.

5. Why, what and How are your best friends.

What are you going to build? Why are you going to build it and how are you going to achieve it? Any manager should ask these critical questions before venturing into product development.

6. Learn, unlearn and relearn.

In 2000, Virgin Airways invested $67 million in J2000 seats. Customers were unhappy with the discomfort caused by the seats and the investment was unsuccessful. However, Virgin did not give up. It invested $127 million to overhaul of the airline’s upper-class seats. In 2003, the newer seats were successful wherein flight attendants would flip over the back and seat cushions to make the bed.

7. Analyze but do not paralyze. The customer may not know what he/she wants.

Steve Jobs was not a big fan of consumer research. According to him, it is not the consumers’ job to know what they want. He believed, to build a great product, think like a consumer of the future not the past. Attention to details can destroy as much value as it creates.

8. Negate negativity. Have a good budget.

A short-term vision may hamper innovation. Negativity destroys much value.

9. Imagine the unimagined.
10. Eat well, stay healthy and more importantly sleep well (dreaming is important!).

This case study/article, titled Innovation Dilemma – 10 recommendations, was originally published at Casestudyinc.com.

The top 10 innovators are:

1. Apple
2. Google
3. 3M
4. GE
5. Toyota
6. Microsoft
7. P&G
8. IBM
9. Samsung
10. Intel

Building right innovation capabilities not mere Spending

What matters is the ability to develop the correct innovation capabilities. These capabilities should match with the overall business strategy.

This case study/article, titled How are successful innovators different?, was originally published at Casestudyinc.com.

Reverse Innovation is the strategy of innovating in emerging (or developing) markets and then distributing/marketing these innovations in developed markets. Many companies are developing products in emerging countries like China and India and then distributing them globally.

Who coined or introduced the ‘reverse innovation’ concept?

Vijay Govindarajan. He is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business and founding director of Tuck’s Center for Global Leadership.

Examples of Reverse Innovation:

Tata Motors – Tata Nano

While companies like Ford set up its global automobile platform in India and catered to the niche premium segments in India, Tata introduced the Tata Nano for the price conscious consumer in India in 2009. Tata plans to launch Tata Nano in Europe and U.S. subsequently.

GE – GE MAC 800

GE’s innovation on the GE MAC 400 to build a portable low-cost ECG machine to cater to the rural population who cannot afford expensive health care was launched as an improved version a year later in 2009, in U.S. as MAC 800.

Procter and Gamble (P&G) – Vicks Honey Cough – Honey-based cold remedy

P&G’s (Vicks Honey Cough) honey-based cold remedy developed in Mexico found success in European and the United States market.

Nestle – Low-cost, low-fat dried noodles

Nestle’s Maggi brand – Low-cost, low-fat dried noodles developed for rural India and Pakistan found a market in Australia and New Zealand as a healthy and budget-friendly alternative.

Xerox – Innovation Managers

Xerox has employed two researchers who will look for inventions and products from Indian start-ups that Xerox can use for North America. The company calls them as ‘innovation managers’

Microsoft – Starter Edition

Microsoft is using its Starter edition’s (targeted at not so technically savvy customers in poor countries and with low-end personal computers) simplified help menu and videos into future U.S. editions of its Windows operating system.

Nokia – New business models

Nokia’s classified ads in Kenya are being tested as new business models. Nokia also incorporated new features in its devices meant for U.S. customers after observing phone sharing in Ghana

Hewlett-Packard (HP) – Research Labs in India

HP intends to use its research lab to adapt Web-interface applications for mobile phones in Asia and Africa to other developed markets.

Godrej – Chotukool Refrigerator

In February 2010, Godrej Group’s appliances division, Godrej & Boyce Manufacturing Co Ltd test-marketed a low-cost (dubbed the world’s lowest-priced model at Rs 3,250) refrigerator targeted mainly at rural areas and poor customers in India. The product runs without a compressor on a battery and cooling chips. The company wants to use a community-led distribution model (as an alternative channel of distribution) to push for product growth.

Tata – Swacch – World’s cheapest water purifier

Swacch means clean in Hindi. Tata launched the water purifier – Tata Swacch targeting the rural market in India with the cheapest water purifier in the market. The product does not require running water, power or boiling and uses paddy husk ash as a filter. It also uses silver nanotechnology. It can give purified water enough to provide a family of five drinking water for a year. The company feels it will open a whole new market.

Pepsico – Kurkure and Aliva

Pepsi is planning to give developed markets (particularly West Asia) a taste of its salted snack Kurkure (and also another snack Aliva). The product enjoys huge success in India and has become a Rs 700 crore brand within a decade of its launch. The success is attributed to product innovation and a good marketing strategy. E.g. Made from corn, rice and gram flour, zero per cent trans fats and no cholesterol, Rs-3 small packs for pushing sales in the lower-tier towns.

Bharat Forge – Maintenance Management Practice

The best practices group at Bharat Forge, a large Indian manufacturer and exporter of automobile components implemented a maintenance management practice it developed in India (developed over 15 to 18 years) in its units it acquired in countries (known for sophisticated engineering) in Germany, Sweden and U.S. The maintenance management process focused on minimizing downtime during machine maintenance and has an advanced information system that predicts problems before they happen. Consequently, Bharat Forge plants globally are very efficient and have an average down time of less than 10 per cent.

KFC – Taco Bell – Yum! Restaurants

KFC test-marketed Krushers, a range of chilled drinks in the cold beverages segment in India and Australia and plans to introduce it to other markets. The launch in India was very successful as ‘Krushers’ accounts for 8 per cent of KFC’s beverage sales in India.

Yum! Restaurant’s Tex-Mex chain Taco Bell has one Indian-designed dessert (tortilla filled with melted dark chocolate) on Taco Bell’s US menus.

Husk Power Systems

In India, Husk Power Systems brings light to rural population (over 50,000) by using locally grown rice husks to produce electricity (a unique and cost-effective biomass gasification technology). The company has also received seed capital from Shell foundation in 2009 to scale up operations.

LG – Low-cost Air Conditioners (AC)

South Korea based LG Electronics (LG) planned to develop low-cost air conditioners targeting the middle and lower-middle classes in India. Their goal was to manufacture air conditioners at the cost of air coolers which were very common.

Renault – Logan

Renault designed a low-cost model of its brand Logan for Eastern European markets. It also sold in the Western European markets later on.

Better Place – Smart Grid of Battery charging/Swap terminals

In Israel, Better Place, a electric vehicle (EV) services provider (creates systems and infrastructure that support the use of electric cars), created an intelligent grid of battery-charging terminals and battery-swap stations. The company is now present in many countries like China, Japan, Australia, the U.S., Canada, France and Denmark.

GE India – Steam Turbines

In 2010, GE’s Indian arm tied up with Triveni Engineering and Industries Ltd to manufacture steam turbines in the 30-100MW range. The company plans to then take advantage of lower input costs incurred in manufacturing and export these products to markets in West Asia, Indonesia, Europe and Latin America.

Coca-Cola – eKOCool

Coca-Cola’s Indian arm Hindustan Coca-Cola Beverages introduced eKOCool, a chest cooler operating on solar energy with a capacity to store about 4 dozen 300 ml glass bottles. The innovation also charges a mobile and solar lanterns. Coca-Cola has plans to pilot the innovation in different cities in India and may be it will introduce it in other developed countries as well.

Vodafone – Zoozoos

Vodafone, which operates in more than 30 countries has plans to make its lovable characters – Zoozoos go international. Zoozoos the black-and-white animated creatures, in fact are actual human beings and are quite a rage in India where they were launched in marketing ads and look like aliens and speak an alien language. But the brand message is very clear to people across all age groups. Vodafone has also licensed the characters (and accessories) for retail merchandise across India.

Coca-Cola – Minute Maid’s Pulpy

Minute Maid’s Pulpy was extremely popular in China. It was basically an orange juice with pulp. Coca-Cola introduced it in other countries as well.

This case study/article, titled Reverse Innovation – Definition and Examples, was originally published at Casestudyinc.com.

P&G’s old strategy for innovation was based on the invention model where innovation comes from within the company – ‘invent it ourselves’ model. Earlier, innovation at P&G meant building global research facilities and having the best talent in the world develop unique products or inventions. But with the times and technology changing and P&G growing enormously, the old model was not working. P&G needed a new approach.

New innovation model – Connect and Develop

P&G knew that for every researcher it had, there were many others who existed outside the organization. So, rather than sourcing for innovation from within, P&G wanted to identify potentially good ideas throughout the world and apply its own capabilities to them to develop better and cheaper products, faster. The model was called “Connect and Develop”. The new model allowed P&G to shift its centralized approach to a globally networked internal model.

This case study/article, titled P&G’s Connect and Develop Strategy for Innovation, was originally published at Casestudyinc.com.

Please note: Case studies are compiled from published sources, and are intended to be used as a basis for class discussion.

This case study/article, titled Case Studies on Innovation Management, was originally published at Casestudyinc.com.

McDonald’s, the fast-food retailing giant has a proven formula for doing well in a recession – courting consumers globally by targeting local tastes with global menus. McDonald’s has expanded its global appeal which has resulted in good results, even though almost every type of industry is seeing widespread sales dips and tougher times.

While still strong in the United States, McDonald’s sales growth has dipped but has been saved by strong international sales. More than half of the McDonald’s total sales have come from abroad since the late ’90s. In 2008, of the total revenues of $23.5 billion, sales abroad accounted for more than 60%. McDonald’s did particularly well in Europe where even the analysts were not expecting good results. McDonald’s has managed to improve its image in France where earlier it was traditionally met with disdain and seen as a symbol of global capitalism. The company also did well in the U.K. which is seen as a tough market with strong competition and the most skeptical customer base. The company’s sales also rose in Asia/Pacific, Middle East and Africa segment.

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Keywords: McDonald’s, fast-food retailing, global menus, Innovation, globalization, adapting to local tastes, International expansion strategy

This case study/article, titled McDonald’s International Innovations, was originally published at Casestudyinc.com.