Innovation Decision Process and Internal Analysis of Fisher & Paykel Ltd.

This article discusses the innovation decision process and internal analysis of Fisher & Paykel Ltd., a major manufacturer of appliances. It explores the stages of the innovation decision process and analyzes the strengths and weaknesses of the company's internal factors. The article also highlights the opportunities and threats in the external environment.

Running head: FISHER & PAYKEL LTD.
FISHER & PAYKEL LTD.
Name of the Student:
Name of the University:
Author Note:

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Annotated bibliography
Rogers, E. M. (2003). Diffusion of innovations. (5th Ed.). New York: Free Press.
Chapter 5.
The paper by Rogers (2003), has discussed about the innovation decision process
through the model and how these guide the individual company and its decision making unit
for gaining knowledge of the factors important for the perfect decision making. Based on
these model, they will be following the path of innovation in the company any brings the
necessary changes to get scope for competitive growth. To this author, the innovation process
is more complicated and difficult to understand. Moreover, if implementation process is not
done properly, then the goal of innovation will not be met and all will be in waste. The five
stages of the Knowledge, Persuasion, Decision, Implementation and Confirmation. In this
chapter of this book named Diffusion of Innovation, the author has detailed each of these
stages. The knowledge stage considers the need for gaining knowledge about innovation,
types of knowledge and what early and late knowledge about the innovation impact upon the
innovations. Secondly, the persuasion stage captures the attitude of the innovators that relates
to the positive evaluation of the new idea either supporting or preventing the innovation
process.
The Decision stage records the support of the management system for the company where the
decision makers are either supporting the innovation process or decision or rejecting them
through active or passive rejection. The Implementation process captures the implementation
for the needed changes for innovation. This also leads the decision makers to be focusing on
the innovation process or think for the reinvention path. In this segment, the author has
mentioned about the limit of reinvention, their necessity and process. On this part, the authors
has given the example of Airplane hijacking process and discussed this matter in detail

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exclusively. Finally, the Confirmation process includes the final decision making where the
individuals seek reinforcement for the innovation decision they have already adopted. This
stage according to Roger (2013), include dissonance and discontinuance that are often forced
in the company. To the author, these stages have evidences of success and have been used for
different companies at different point of time. Finally, this chapter has mentioned about the
inclusion of the communication channels by the stages of this innovation decision process
which have two different categories like cosmopolite and localise channels, these two
categories of channels have different capabilities and manipulate the decision makers in the
innovation decision process.

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Report
Company name FISHER & PAYKEL LTD.
Report by Innovation manager
Report to General manager
Company information:
Fisher & Paykel Ltd. is a major manufacturer of appliances in the New Zealand
market and glad to be associated with the idea of innovation for long. This has been
designing different types of products since 1934. It has become a global company that is
operating in more than 50 countries including countries of the UK, US and Asia including
New Zealand (Fisherpaykel.com 2019). Our trademark appliances include the gas and
electric cooktop, Smart refrigerators, Dish Drawer dishwashers, Aero Tech ovens, Smart
washing machines and Smart load top loading dryers. Now we have manufacturing unit in the
Italy, China and Mexico but need innovation decision for more expansion. We have promised
to expand in the other industries including appliance, health care and automobiles but only
need to have innovative decision to follow. Through proper understanding of the business in
the automobile industry we can achieve success.
Point of discussion:
The company is having aspiration to respond the need of the customers around the
world by including new innovation scopes in the manufacturing level. We can invest more in
boosting motor design capabilities and motor production capacity for meeting the increasing
demand from the wide group and the third party customers. In this regard, we will be
analysing the internal analysis matrix diagnosis and external analysis matrix, innovation
external matrix analysis and SWOT analysis matrix so that you can understand the need for
innovation in the manufacturing and boosting motor design capabilities, implementation

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process and strategic plan for gaining success in these changes. In this regard the innovation
department has strategized to increase investment in the research and development spending
so the internalisation of the skills and capabilities are made possible for gaining competitive
advantage. This will be needing culture of risk tolerance and organizational flexibility.
Implementation process if not done properly, then the goal of innovation will not be met and
all will be in waste.
According to the strategic management concept of Fred David, there are some very
important factors for completing this management process and most of the organisations
follow this process model. In the chapter of 4 his book ‘Strategic management’ the author has
pointed out the types of strategies of the strategic management. There the author has detailed
11 types of strategies of management and integration process. This include forward
integration, horizontal integration, backward integration, market penetration, product
development, market development, related diversification, unrelated diversification,
divestiture, liquidation and retrenchment. There are benefits of having clear objectives which
include reducing uncertainty, minimising conflicts, and aiding allocation of the resources and
aiding designs of the jobs in detail. The author has mentioned about the Porter’s five generic
strategies that can keep the companies to be able to implement cost leadership, focus and
differentiation. All of these strategies help the companies to become more effective in
achieving the goals. On the basis of this the company can follow the path of establishing a
clear vision and mission strategies, formulate them, implement then and then evaluate as well
as monitor effectively so that the changes are made and the company can be adapting all the
changes.
In the fifth chapter the author has mentioned about the importance of having proper
vision and mission statements in the strategic management process of the firms. In this
chapter the author David and David (2013), have mentioned the nature and role of vision

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statements in strategic management and their characteristics. David and David (2013), have
detailed the visions statements of some of the most successful companies in the world. In this
chapter five the mission statement according to the author is capable of representing the true
nature of the company’s business and can be hold as the foundation of priorities, plans and
strategies. It is capable to reach the stakeholders if the mission and vision statements of the
companies are clearly mentioned. The author here has given a comprehensive strategic model
that include the process of developing vision and mission statements. Here the author has
detailed the characters of the mission statement which is a declaration of the outlook and
attitude of the companies. This is also related to the capabilities of the companies for
developing an emotional bond with the employees, customers, investors, and other
stakeholders. The organisational purpose is only served when the mission and visions of the
company are customer oriented. These actually help the formulation, implementation and
evaluation of the strategies which the companies have already developed.
Finally, the sixth chapter details the process of internal audit, role of research and
development (R&D) in formulating strategies and internal Factor Evaluation (IFE) Matrix.
Developing vision and mission statement, external and internal environment analysis,
establishment of long term objectives, generation, evaluation, choice of the strategies,
implementing those and measuring and evaluating the effect of the strategies. Here the author
have developed the knowledge about the nature of internal audit and detailed the key internal
forces for the strategic management. The process of performing an internal audit has also
been developed in this chapter that takes a resource based view. This resource based view to
the competitive advantage deciphers that the internal resources hold more importance of the
companies than the external resources. To the author, it is not only the fact that the
management will be only strategizing plans and implementing them but they need to integrate
the strategies with the culture which is one of the most essential afford for the success of the

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objectives of the firms. Here the author has detailed the responsibilities of the management
where the managers of the companies will be planning strategies, organising them, motivate
the employees, recruited the best fitted talents and control the operations in every aspects.
Internal analysis matrix diagnosis-
Internal analysis:
Factors for innovation Strengths Weaknesses
Technical abilities Fisher & Paykel Ltd. has been
renowned for the innovation
process as this has been operating
in the kitchen and home
appliances business for long.
It is capable to incorporate
strategies through innovation of
technology.
This will be meeting the needs of
the customers every time through
the technological up gradation of
the systems in every department
o the company.
Technical abilities are often
not implemented in the
communication process with
the customers and other
stakeholders (Barney et al.,
2017).
Organisational
capabilities
The company has depended only
upon the innovation for gaining
competitive advantage and tried
to be flexible in organisational
structure (Milutinović, Stošić &
Mihić, 2015).
The organisation is capable
to include innovation
process in the operation but
there are limitations in the
capabilities like bringing
sudden changes in eth
management process or for
that matter in the
incorporation of a new
subsidy in the new market.
Changes in this organisation
is difficult to bring because
hierarchical structure needs
to allow permission for new
initiative
Success of the current
business model
The business model of this
company plans for the successful
operation of business,
identification of the revenue,
existing customer base, products
and the details of the funding
process.
Business model is not new but
strongly support innovation.
Old school business model
has often created problem to
ascribe with the new types
of initiatives for innovation
decision.
Traditional process of
thinking and the
management decision
making will take time to

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ensure that the investment
will be permitted.
Funding  There is no problem of
investment in innovation
process in any way.
 The company has a huge
support from the investors in
all possible sectors it is
operation in terms if home
appliances or the kitchen
appliance.
 The shareholders will be able
to meet the economic need of
the company in an effective
way.
The process of funding is
length and R&D department
needs to cross different
stages of investment.
For the product
differentiation strategies and
entering the business of
automobile industry of the
world, the company lacks
investment as the question
of success in entering a new
business lumbers in the
minds of the shareholders,
Top management vision New trends of market is analysed
for innovation
Main focus on the market
trend often created
confusion as information is
not passed on properly.
Matrix:
Internal critical
factors
Weight Classification
Weighted value
Strength 0.0 to 1 Major strength =4
Minor strength =3
Weight x
classification
Technical abilities 0.09 4 0.36
Organisational
capabilities
0.05 3 0.15
Success of the
current business
model
0.15 4 0.6
Funding: 0.07 3 0.09
Top management
vision
0.06 4 0.24
Weaknesses Major weakness = 2
Minor weakness = 1
Technical abilities 0.2 1 0.2
Organisational
capabilities
0.08 2 0.16
Success of the 0.15 1 0.15

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current business
model
Funding: 0.09 2 0.18
Top management
vision
0.04 1 0.04
Total 0.98 2.17
Internal analysis interpretation:
1 2 3
Major
weakness
Weakness Minor
weakness
Minor
strength
Strength Major
strength
1.5 2.5 3.5
Conclusion:
In order to understand the scopes of improvement any organization analyse the
personal strengths and weaknesses so that the process of finding out the opportunities and
threats become easy. The internal critical factors have been essential to the attribute of the
strong brand image of the companies to make it effective in the expansion in the other parts
of the world. Fisher & Paykel Ltd. has a strong brand recognition in the different countries of
Asia, Europe and North America. The reason of this success is the dependability on the
technological development in the countries where the company has been operating and the
experience of these long years. However, there are problems in the organizational structure of
the company that relates to the implementation of the changes in the business model and
enhance investment in the reach and development sectors for the appropriate implementation
of the innovative technology for starting business in the automobile business.
From the analysis of these internal matrix of Fisher & Paykel Ltd. gives the idea that
there are problems of innovation strategies in the organisation. The total weighted value is
2.17 which falls in the minor weakness category. These problems within the company

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regarding investment in innovation process through research and development process may
lead the company to lose the competition (Adner, 2017). The minor weaknesses have
connection with the over dependence of the sales one types of products in the business
markets. It also includes the problems of too low net profit margin and the competition based
on process. There is another factor relating to the negative publicity by the competitors which
may not be prefer on the case of this particular company. In this regard, the company needs to
untangle the problem of flexibility of the management decision making for bringing any new
changes in the policies supporting the innovation process. The weakness in the traditional
business model also need to be changed so that new and updated business model meet the
strategies.
Comprehensive innovation external matrix analysis:
External critical factors Opportunities Threats
External network The company has been
operating in more than
markets of 50 countries in
the world hence has got
excellent network in all over
the world.
The kitchen appliances of
this command hat has made
it so popular among the
people has helped it to
develop a great network of
suppliers, dealers and
distributes.
The company has initiative
innovation process in the
motor manufacturing for
which the networks may not
be enough
The company only has the
dealers and suppliers of the
raw materials that helps it to
manufacture home and
kitchen appliances but in
case of care manufacturing,
a new bas of network will be
needed.
Industry structure Hierarchical organisation of
the company supports
collaborative initiative for
innovation (Nambisan et al.,
2017)
The industry is supportive of
entering new companies for
the effective product
variation and cost control. In
this case, the company will
There are too many
institutions for collaboration
initiative which may create
confusion and increase
complexity.
The industry structure may
not help the company to
sustain the competition and
complicated nature.
It may not adapt with the

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be fitting itself for meeting
all the requirements of the
automobile industry.
changing need of the
industry limited
technological knowledge of
the automobile industry.
Competition High competition level will
allow the company to
understand the weak point to
be mend.
The customers loyalty in the
countries and market can be
effectively guide the
company to be entering the
business and automobile
industry without any issue.
In the markets of appliances
and automotive industry are
highly congested that may
lead to create entry level
hard.
High level of competition
can lead the company to
sustain in the market.
The companies that are
already doing business in
these regions, have in depth
knowledge about the
automobile entry and they
have the experience of years
to manage any types of
problems in this industry.
Rate of technological
changes
Technological growth is
high and supportive of
innovation.
All of the products have
their own marketing
measures which help the
company to enjoy cost
effective operations by using
technological support
(Goffin & Mitchell, 2016).
High competition may
engulf technological
opportunity.
The company has the
experience of manufacturing
kitchen and home appliance.
Now for developing
competitiveness in the car
manufacturing industry, the
initial blow cannot be
overlooked.
Conclusion:
From the above analysis it can be stated that the company has the experience of
manufacturing kitchen and home appliance but not the manufacturing of car. This is the
reason why the expansion of the network among the suppliers and dealers who have in depth
knowledge about the manufacturing and selling of cars in the markets of Europe and North
American region. There are companies that are already doing business in these regions, have
in depth knowledge about the automobile entry and they have the experience of years to

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manage any types of problems in this industry. Unlike these existing companies, Fisher &
Paykel Ltd. may feel claustrophobic initially in this market but have to be patient to become
knowledgeable and restorable to gain profit.
External analysis matrix:
Internal critical
factors
Weight Classification
Weighted value
Opportunities 0.0 to 1 Excellent answer to
opportunities or
threats =4
Average answer to
opportunities or
threats =3
Weight x
classification
External
network
0.12 4 0.48
Industry
structure
0.05 4 0.20
Competition 0.3 3 0.90
Rate of
technological
changes
0.06 3 0.18
Threats Mean answer to
opportunities or
threats= 2
Deficient answer to
opportunities or
threats= 1
External network 0.1 1 0.1
Industry structure 0.05 2 0.10
Competition 0.09 1 0.09
Rate of
technological
changes
0.04 2 0.08
Total 0.81 2.13

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External analysis interpretation:
1 2 3
Deficit
response
Mean
Response
Above
average
response
Excellent
response
1.5 2.5 3.5
Internal external matrix:
4 Internal
3
Analysis
2
1
External 3 I II III
Analysis 2 IV V VI
1 VII VIII IX
Course of action:
The company has strong business strength and medium industry attractiveness. It has
a huge customer base in the Europe and North American market. In addition to this, the
network of stakeholders needed for tis change are found abundantly. Therefore, the company
can take decision to be taking the risk of entering new business and bring all the needed
changes in the internal environment. The company needs to hold all the things properly that
are already set. The internal analysis interpretation is 2.17 and external analysis interpretation
is 2.13. Therefore falls in cell V which allows it to follow Playing-Not-to-Lose (PNTL)
strategy. In this case the managers must take following steps-
I, II & IV are PTW Strategies
III, V & VII are PNTL Strategies
VI, VIII, & IX are Exit Strategies

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 Protect and maintain the market share that has been gained form the other
business or products
 Prevent margin erosion from what it currently has
 Taking care of the highly vulnerable to the competitors because the
competitors in this market are strong enough to eliminate this business
 Believing in the Playing-Not-to-Lose strategies
 Perfectly choosing channels for investors, distributor, and dealers and
manufacturing partners.
SWOT analysis:
Strengths
1. Experience in
technical abilities
2. Flexible organisation
structure
3. Management vision
for new trend market
Weaknesses
1. Traditional business
model
2. Complicated funding
3. Complicated
communication
process within
organisation
Opportunities
1. Excellent External
network
2. Collaborative
initiative for
innovation
3. Increased demand
Strength opportunities
strategies
 Using internal
strength
Weakness opportunities
strategies
 As the company falls
in the V cell of the
Internal external matrix,
therefore can follow the
PNTL semi radical
innovation (Ansoff et al.,
2018).
 Improve internal
weakness and take
advantage from
external opportunities
Threats
1. High competition
2. Low rate of
technological
growth
Strength threat strategies
 Using company’s
internal strength
 Reduce external
threat through PNTL
strategies (Stošić &
Milutinović, 2017)
Weakness threat strategies
 Strategies need to be
implemented for
reducing internal
weakness
 Avoid external threat

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Innovation-Decision process:
Strategic plan:
Knowledge:
 Expanding regular market research: The expansion of regular market research would
enable the organization in gathering specific knowledge on the market dynamics. It
would allow the organization in improving the innovativeness of the same.
 Assess innovation climate: The market knowledge would empower the organization
in gaining insights on the different innovations that are being made by the businesses
in the markets.
knowledge persuation decision implementation confirmation
Prior conditions
1. feeling for need
2. Innovativeness
3. High competition
Charact
eristics of decision
making unit-
-
Personality
variables
-
problems of
stakeholders
-
Communication
behaviour
Charact
eristics of
innovation-
-
complexity
-relative
advantage
-
observability
-
Compatibility
A
doption
R
ejection
Continue
d adoption
Later
adoption
Disconti
nuance

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 Increasing customer visit: Increased market knowledge would enable the organization
in gaining insight on the consumer demands.
Persuasion:
 Review distribution strategies: The evaluation of the distribution strategies would
enable the organization in examining and avoiding loopholes through
micromanagement.
 Communication with all the departments of the organisation: The communication
with the different departments would empower the organization in establishing
interconnectedness and collaborative functioning towards the completion of the
common objectives (David & David, 2013)
 Checking through online survey or other methods whether the customers demand new
innovative technical design other than the existing ones.
Decision
 Detail need for the organisation management system: The assessment of the detailed
need or urgency faced by the organization would empower the decisions as per the
strategic goals of the venture.
 Increase incorporation of the platforms for increasing network
 Thinking about entering new commitment with the stakeholders: Developing
collaboration with different new stakeholder groups would enable the organization in
maximizing the scope of expansion.
Implementation
 Recruitment of new employees experienced in working in the new industry: The
recruitment of new and skilled employees in the organizational operations would
enable the organization in influencing the uninterrupted functioning of the different
operations.

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 Increasing team work: Increased collaboration and team work would ensure the
quality and productivity related concerns of the venture.
 Increase quick change regulator line: The quick change regulator lines would enable
the organization in retaining the trust and loyalty of the stakeholders to the different
operations of the venture.
 Focusing in building new subsidising in the different countries’ market
 Invest more on the marketing of the new products on the basis of the needs of the
customers
Confirmation
 Continue adaptation: Adaptation would enable the organization in bringing forth
continuous improvement in the process design through assessment of the current
market innovations.
 Change in the management policies: The change in the management policies would
enable the venture in empowering the business operations.
Conclusion:
Therefore, it can be concluded that the company needs innovation for increasing
manufacturing and boosting motor design capabilities, implementation process and strategic
plan for gaining success in the markets where it aims to operate. As the company falls in the
V cell of the internal external matrix, therefore it can follow the PNTL semi radical
innovation. The company can take decision to be taking the risk of entering new business and
bring all the needed changes in the internal environment. It can improve internal weakness
and take advantage from external opportunities by continuing adaptation with the competition
present in the automobile business of the world. Fisher & Paykel Ltd. may feel problematic in
operating in the new business industry initially in this market but must have the needed
patience to become knowledgeable and restorable in order to gain profit. Through the process

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of increasing the investment in the change of the policies regarding for meeting the demands
of the production and communicating with the customers by increasing the online visibility
can bring positive changes. These will be achieved only when the company will be able to
untangle the problem of flexibility of the management decision making for bringing any new
changes in the policies supporting the innovation process.

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Adner, R. (2017). Ecosystem as structure: an actionable construct for strategy. Journal of
Management, 43(1), 39-58.
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
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David, F. R., & David, F. R. (2013). Strategic management: Concepts and cases: A
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Retrieved 19 September 2019, from
https://www.fisherpaykel.com/nz/experience/articles.html.
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