1 ‘Individual assignment on Innovation Management for Designed Company’ Innovation Management (MANM115) Submitted in part fulfilment of the requirements for the degree of Master of Science in Entrepreneurship By Name: Petr Alekseev; Student ID:6327618
2 FACULTY OF ARTS AND SOCIAL SCIENCES INDIVIDUAL COURSEWORK COVERSHEET Coursework Details Module Name and Code (please check front of module handbook)Innovation Management (MANM115) Coursework TitleInnovation assignment on Innovation Management for Designed Company Date of Submission10/06/2018Word Count2998 Student Details Student URN (7 digit number on Uni card)6327618Student NamePetr Alekseev ProgrammeMSc Entrepreneurship StudentDeclaration To be agreed by Student Please refer to theUniversity of Surrey Regulations for the Conduct of Examinations and Other Forms of Assessmentsand your departmentalStudent Programme Handbookfor more information on Academic Misconduct and Plagiarism. Declaration: I confirm that the submitted work is my own work and that I have clearly identified and fully acknowledged all material thatis entitled to be attributed to others (whether published or unpublished) using the referencing system set out in the programme handbook. I agree that the University may submit my work to means of checking this, such as the plagiarism detection service Turnitin® UK. I confirm that I understand that assessed work that has been shown to have been plagiarised will be penalised. 'In completing this work I have been assisted with its presentation by [state name and contact details of assistant] and, ifrequested, I agreed to submit the draft material that was completed soley by me prior to its presentational improvement.'(This paragraph is to be deleted where it is not relevant). By completing and submitting this form, I confirm that: I have read and fully understand the University’s Regulations and guidance onAcademic Misconduct and Plagiarism This submission is my own work and all coursework is the product of my own research and study. All quotes and sources have been fully and properly attributed and referenced. This work has not been previously submitted, infull or in part, for the purpose of assessment at this or any other institution No effort has been made to subvert plagiarism detection processes of the University This submission may be transferred to and stored in the Turnitin Plagiarism Detection database for the purpose of plagiarism detection now and in the future I understand that all required work must be received within the published deadline I understand that work received after the published deadline will be penalised in line with University Regulations I understand that any request for mitigating circumstances must be made formally via the Student Liaison Officer, using the appropriate form and including evidence; the application and associated evidence must be received by the stipulated date
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4 Executive summary Section A of the report primarily focuses on theoretical background and driving forces of innovation. The whole retailer sector is not a stranger to the waves of innovation because digital economy is currently disrupting the retail industry. Debenhams Plc Share price plummeted when online retailers penetrated the market in 2008. The downward trend in the number of physical stores forces Debenhams to identify new online distribution channels in order to continue generating revenues. Section B analyses Debenhams internal factors. It is notable that both previous leaders Mr. Sharp and Mr. Templeman did not adopt the Debenhams existing business model to the new digitalenvironmentduetopoorinnovativeclimatewithinorganisationandstrong organisational foundations that were formed more than 200 years ago. In 2016, Sergio Bucher, used his knowledge, gained in Amazon, and announced new strategy with focus on online selling and better customer experience by introducing social shopping within physical stores. Debenhams, headed by Sergio Bucher started moving towards entrepreneurial culture and organic structure. Nonetheless, interviews conducted with employees in Debenhams Guildford department has showed that Debenhams did not introduce a fully organic structure. Section C analyses how Debenhams competitors adopted their business models to the new environment. For example, Marks & Spencer as well as John Lewis almost doubled their online sales, while Debenhams continued to focus on physical stores. Section D evaluates new Debenhams strategy with focus on online sales and better customer experience. However, in must be remembered that Debenhams introduced their new strategy only in 2016-2017, therefore it is too early to expect positive changes in profitability and share price index. The last section E of the report suggest recommendations for Debenhams. It is notable, that Debenhams is moving into the right direction. However, there are some internal issues that shouldbeconsidered.Forexample,sharedvisionis notsetamongall employees. Furthermore, there is no direct communication channel between regular employees senior management. The following report suggests to implement the employee cross functional suggestionprogram to improve communicationchannels andalign all employees in innovation process. Finally, Debenhams should better encourage career progression to make employees motivated.
5 Table of Contents Executive Summary .......................................................................................4 Part A Introduction .......................................................................................6 1.1 Introduction..........................................................................................................................6 1.2 Debenhams Profile..............................................................................................................7 1.3 Debenhams SWOT Analysis...............................................................................................8 Part B Debenhams Internal Factors................................................................9 2.1 Debenhams Leadership and Structure.................................................................................9 2.2 Debenhams Culture............................................................................................................10 Part C Debenhams External Factors .............................................................12 3.1 E-commerce Trends...........................................................................................................12 3.2 Debenhams Porter’s 5 Forces Analysis.............................................................................13 3.3 Debenhams Other External Factors...................................................................................14 Part D Debenhams Strategy .........................................................................15 Part E Recommendations for Debenhams ...................................................16 List of Figures Figure 1.1 Organizational Architecture.....................................................................................6 Figure 1.2 Debenhams Plc Share Price.....................................................................................7 Figure 1.3 Debenhams Business Cycle......................................................................................7 Figure 2.1 Debenhams Organizational Structure.......................................................................9 Figure 2.2 Three Levels of Culture.........................................................................................11 Figure 3.1 World E-commerce Growth..................................................................................12 List of Tables Table 1.1 Debenhams SWOT Analysis....................................................................................8 Table3.2 Debenhams Porter’s 5 Forcers Analysis.............................................................13-14 List ofReferences...................................................................................................17 Appendices.............................................................................................21
6 Part A–Introduction 1.1 Introduction In businesses, innovation often results when companies want to further satisfy the needs and wants of their customers. When organizations set an innovation strategy, they face with a dilemma whether they should choose incremental or radical innovation path. Incremental innovation is a reduced risk approach that focuses on adding new features to the existing product or service to make it more competitive, while radical innovation is about absolutely new products that transform the market or even creates the new ones (Drucker; 2014). According to Schumpeter (1939) and Kizner (1976), every business is linked to the waves of innovation, because when a product changes positively, other organizations must seek innovations in order compete and continue making profits. In order to innovate successfully and quicker respond to external factors, organizational architecture should be created based on trust, openness and self-interest. Figure 1.1 shows that organizational architecture consists of both internal and external components. Figure 1.1Organizational Architecture Source: Burns; 2013 Internal architecture primarily focuses on employees generating a strong sense of collectivism based on shared objectives and commonly accepted strategies. The leader is responsible for creating a structure and culture within organization. External environment effect culture constantly and the leader must be responsive to it and being able to adopt the strategy to the new environment. The whole retail sector is not a stranger to innovation. Digitalisation of economy and mobile shopping are currently disrupting the retail industry (Hendrikzs; 2018). Retail firms that operate online have much less operating expenses compared to firms with physical store. Therefore, online retailers could afford spend more funds on promotion. The downward trend in the number of physical stores forces existing retail firms to find innovative Internal ArchitectureExternal Architecture
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