Managing Innovation Report

This report discusses the application of Blue Ocean Theory in the historical and future development of Dyson. It explores the principles and process of Blue Ocean Innovation Theory and how it helps organizations create uncontested market space and develop innovative products. The report also highlights the advantages and disadvantages of the theory.

Managing innovation report
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Table of Contents
INTRODUCTION...........................................................................................................................3
INNOVATION THEORY...............................................................................................................3
APPLICATION OF BLUE OCEAN THEORY IN HISTORICAL DEVELOPMENT.................6
APPLICAION OF BLUE OCEAN THOERY IN FUTURE DEVELOPMENT............................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Every business requires do implement innovation in it so that they are able to grow and
develop. Innovation brings in vast number of opportunities for firm to expand in the market.
Also, it helps in competing with other companies to sustain in market for long term. Innovation
can occur in several areas such as operations, product, etc. this leads to create a positive culture
as well. However, in such a competitive environment it is necessary for organisation to innovate
new products and services. This enables them to attract new customers and expand at global
level. Innovation brings in creativity and it improves efficiency of organisation as well. Besides,
new product development helps in fulfilling demand of people. There are various theories of
innovation that is applied. It depends on nature and type of innovation which is going to be
made within firm. Also, each theory focus on various aspect of innovation and procedure
introduced. Generally, blue ocean theory is used that create differentiation in products and
generate demand of that product in the market.
In this report it will be described about innovation theory of blue ocean. Also, it will be
discussed about how theory is applied in historical and future development of Dyson.
INNOVATION THEORY
Overview of Blue ocean innovation strategy
Innovation is a kind of a new idea, new imagination which is used for development of new
product, device or method. There are various kinds of innovation theories that can adopted by
organizations for bringing improvement within their working process. Blue ocean strategy is also
one of those strategies that can be used by organization for exploring wide, deeper and potential
market space that still has not been explored yet (Agnihotri, 2016). This theory helps the
organizations in capturing new and unmet demands of their customers which not only helps
organizations sustaining within the market, gaining competitive advantage but also helps them in
attracting more of customers. It is one of the most common and well- known theory that has
helped various firms’ development of products or services for customers by meeting their unmet
needs and requirements and develop their own market space. Using this theory various
organizations like Dyson has opened and new market space and created new demands within
their customers by exploring market opportunities that were not explored yet and also helps the
organizations in making current competition irrelevant. It can also be said that this theory creates
a new uncontested market space that has not been explored yet. Organizations can use this
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innovation theory to create their own market space and provide high quality products that can
fulfil needs and requirements of their customers in a much better and appropriate manner.
Usage of this theory can not only help in exploring unexplored requirements of customers
but can also help in creating a much larger market scope for the organizations and sustain within
the market as well as develop a brand name (Vieira and Ferreira, 2018). There are very a smaller
number of organizations that uses Blue ocean strategy for growth and development of their
organization. Dyson is one of those organizations that uses Blue ocean strategy and developed a
vacuum cleaner that didn’t require vacuum bags. It was an unexplored market need that was
explored by Dyson which further helped them in developing a new market segment which
further helped them in growth and development of the organization.
Principles and process of Blue Ocean Innovation Theory
There are four basic principles that helps in forming for Blue ocean strategy that have
been explained below:
 First is to create uncontested market space created by reconstructing market boundaries. First
of all, organizations should study things that are done by current market and on the basis of
this, organizations should develop their own strategy which is completely different from rest
of the market. This can be done by focusing upon characteristics of products that can be
eliminated and characteristics of product upon which focus can be increased that are not
being focused upon (Priilaid, Ballantyne and Packer, 2020). For doing this it is extremely
important for organization to gain understanding of needs and requirements of the customers
so that organization can focus upon characteristics that are required to be focused upon and
fulfilled in order to create a uncontested market space. In order to protect the organization
from any kind of serious marketing issues, the strategies should be implemented effectively
so as to lower down the competitive environment structure.
 Second principle is to focus upon bigger picture. Many organizations focus upon collection
and analysis of large amount of data due to which actual strategy that should be focused upon
is lost. Instead of this, organizations should focus upon actual needs and wants of their
customers, understand current market offering and things or features that are not offered by
the market currently. This will help the firm to get an idea that will further lead them towards
development of blue ocean strategy. So, it can be said that instead of focusing upon numbers
it is important to focus upon successful strategy development.
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 Third principle is to focus upon factors that keep customers out of market and focus upon
resolving this issue or problem for larger growth. This can be done by understanding market
demand behind existing original and existing products and services so that organization can
understand view point of customers, complaints or issues faced by them. This will help them
to understand all kinds of factors that keep customers out of market and reasons why they do
not purchase existing products or services. So that company can work upon these factors and
develop an effective blue ocean innovation strategy.
 Last is to get correct strategic sequence. For this it is important for organizations to work
upon identify drawbacks and factors associated with product so that it can be resolved,
convenience of customers for the current product, risk associated with current product and
service etc. Today due to changing demand of customers another factor has been added i.e.
environment friendliness (Alam and Islam, 2017). Only after this appropriate strategy can be
developed. Correct sequence of strategy development is to make sure that proposed product
has good utility, then check whether product is made available to customers under
appropriate price so that they can offered the product, then third step is to identify cost at
which developed product can be sold and last is to adopt all kinds of hurdles that can be
faced by organization in selling products or services.
Above principles not only helps in development of blue ocean strategy though which
innovative product can be developed but also helps in removing hurdles that can stop customers
from purchasing newly developed product.
Advantages and disadvantages of Blue Ocean Innovation Theory
Blue ocean innovation theory has its own advantages and disadvantages or limitations as
well, some of them are follows:
Advantages: Products that are developed though this theory does not make customers choose
between affordability and value. In fact, if the developed product fulfil customers needs and
values then their high probability that developed product will be sold quickly. Due to this
organizations do not have any kind of pressure of creating an effective pricing strategy (Alam
and Islam, 2017). Not only this organization do not need to face any kind of competition for
sales of developed product.
Disadvantages: It is difficult to come up with ideas of futuristic development for identification of
untapped market. Development of new market is not easy and organization need to be clear with
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their ideas, customer base otherwise they can face lots of difficulties, hurdles and issues in
development of new market space.
It helps in selecting the right scope for the business and identifying about the hidden talents
that can be turned into the opportunities. The theory creates a differentiation strategy for the
products and services of an organization and thereby creates a stringent organizational
atmosphere. The organization then consider market competition as highly irrelevant and will
give more focus on developing some innovational products and services.
APPLICATION OF BLUE OCEAN THEORY IN HISTORICAL
DEVELOPMENT
Dyson is UK based technology company that manufacture and design different types of
products. It usually deals in household appliances such as heater, vacuum cleaner, air purifier,
hand dryers, etc. it was founded in 1991 by james dyson. The company headquarter is in
Wiltshire, England. It is a private limited company having employees around 12000. Revenue
generated in 2018 is $4.4 billion. In 2019 company decided to shift its headquarter to Singapore
and to operate in manufacturing electric vehicles.
It is evaluated that there are only certain organisation that use and apply blue ocean strategy.
This is because it requires to develop an innovative product that may contains new features in it.
Furthermore, theory is used only when innovation is done in context of new product or service
development. So, it need in depth analysis of data and info and growth opportunities in it. The
contested work environment helps in creating a strong market base for the organizations where
the differentiation of the products among other organizational products gets lowered
Business canvas model
Key partner The partner of company are suppliers who
provide them raw material. Also, retailer
who sell their products in market.
Key activity Its main activity is to design and produce
various household appliances like vacuum
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cleaner, dryer, etc.
Value proposition They are quality and brand image
Customer relationship Dyson provides high quality after sales
services to customers. By this they are able
to maintain strong relation with customers.
Key resources HR and technology utilised by company are
key resources..
Cost structure Company makes
Channels Retailers are main channels through which
products are sold.
Revenue stream Products
After sales service fees
Customer segment Diversified customer base
How theory applied in historic development
Dyson once found that in vacuum cleaner contained a coating which was sprayed on
wheel barrow. So, it was ineffective. He constructed a card board model that contained bag in it
and it worked in effective way. Dyson then designed around 5127 prototypes of vacuum. The
company that did took interest in purchase of design was zanussi. So, only 500 vacuums were
sold in 1983.
In 1995 japan company apez ltd took interest in design of dyson and in march 1986
cyclone that is G force was manufactured. So, by utilising finance dyson started his own
company in 1991 and built a DA 001 vacuum that was produced by American company Philips.
However, soon DA 001 was replaced with DC01. It became largest selling vacuum in UK within
a short time period.
However, after some time company introduced a cylinder machine named as DC01.
Besides that, in 2001 company used root cyclone technology to built a new vacuum cleaner. In
that funnels were used instead of cyclone tubes. Furthermore, in 2009 another new technology
was implemented by firm in it that was air blade hand dryer. Similarly, they invented a pure
crytomic fan and heater that removes air pollutant and purify air. In 2002 company moved its
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production to other countries in order to reduce cost. It was done to increase production as well
of products. This lead to rise in growth of company in quick time. Moreover, in manufacturing
process software can be used so that cost is reduced. It will improve efficiency of operational
process as well. Making future technological changes will enable company to find out areas of
growth and expand in other markets. They will be able to compete with rivals in effective way
and gain competitive advantage.
In theory there are 4 stages which is described as below
Raise- here, dyson wanted to raise production along with reduction in cost. So, main focus was
to increase production of products
Create – in this effective use of design and technology in manufacturing products is main
function of Dyson that was considered in it. The strategy resulted in developing new products.
Eliminate – in this eliminate of controversy with UK government was concern.
Reduce – here, management focused on reducing cost of production and generating more
profits. Thus, for that production was moved from one country to another.
Thus, blue ocean theory is applied by company in its historic development. Here, they
focused on how creating new design and prototype of products with help of new technology in
it. This led to growth of company in smooth way. Besides that, in order to increase production a
decision was made to move unit from other country.
ELIMINATE
Manufacturing expense
RAISE
Profit generation
Rise in production
REDUCE
Manufacturing cost
CREATE
New products
APPLICAION OF BLUE OCEAN THOERY IN FUTURE DEVELOPMENT
It is necessary for Dyson to implement innovation in their products or services so that they
are able to grow. Besides that, it will be useful to survive in market and compete with rivals.
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Thus, with help of blue ocean strategy company can develop new products. In such a
technological advancement era they can do innovation in it. As they design and manufacture
home appliances so as per Covid 19 pandemic new products can be developed in future. Here,
they can develop robots which can work with no human interaction. Furthermore, new vacuum
cleaner can be designed that operate entirely on AI and sensor. This will be enable in doing work
in efficient way with more accuracy. Besides that, in all products innovation can be done of
using AI and sensors. It will help them to provide safe products which can be used. Hence, major
focus should on doing technological innovation within products. So, there will be
differentiation of products in market as compared to competitors.
Along with it, Dyson can design and produce kitchen appliances as well as new products. In
this they can manufacture such products which disinfect virus with help of technology. Here, it
means that appliances use UV rays and it can be used in many household work. Therefore,
advance technology can be integrated in all types of products designed by them. In addition
company can innovate new procedure of designing products. It means that they can use virtual
reality and AI in design of products. This will result in reducing cost of manufacturing products
and providing them at low prices in the market. So, customers will also be easily attracted. So,
for changing designing procedure innovation can be made and new technology tools and
equipments is used in it. So, this will make entire process easier to providing clear 3D view of
product design. Innovation is a kind of a new idea, new imagination which is used for
development of new product, device or method. There are various kinds of innovation theories
that can adopted by organizations for bringing improvement within their working process.
However, in future innovation can be made in providing after sales services. Here, Dyson
can use robots in providing services. it will be bring in new creativity in process. Besides, on
basis of that customer feedback can be taken. In this way in all procedure technology can be
used. There will be rise in cost of maintain it but the innovation will be beneficial in growth of
firm. Moreover, in manufacturing process software can be used so that cost is reduced. It will
improve efficiency of operational process as well. Making future technological changes will
enable company to find out areas of growth and expand in other markets. They will be able to
compete with rivals in effective way and gain competitive advantage. There will be change in
design of products and with some new features installed in it.
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So, it is analysed that application of blue ocean theory in Dyson will emphasize on
developing new products and bringing technological innovation within firm. The new product
development will differentiate it from rivals and creating a new brand image in industry. Here,
sensors and AI is installed in it. The demand will be created by customising products and
including new features in it. Also, new after sales service procedure will be developed where
robots will be used in it. In produce designing VR and 3D technology is used. Furthermore, in
manufacturing process AI is used to reduce cost.
ELIMINATE
Product failure
RAISE
Profit generation
New demands for innovative products
REDUCE
Manufacturing cost
Customer complaints
CREATE
More customer base
Gain competitive advantage
CONCLUSION
From report it is concluded that innovation is major source through which organisation can
grow and develop. It is a process of idea generation, conversion and diffusion. There are various
types of innovation like disruptive, frugal, etc. Innovation helps in gaining competitive
advantage in the market. Moreover, new products and services are developed as well. This
results in changing overall procedure of operations and implementing of new technology or
tools to be used in it. Besides that, innovation creates a positive culture and enhancing creativity.
However, there are different theories of innovation such as blue ocean, BPR, etc. that is applied.
The theory helps the organizations in capturing new and unmet demands of their customers and
development of products or services to meet their unmet needs and develop their own market
space. There are 4 principles that are to create market space, to focus upon bigger picture, to
focus upon factors that keep customers out of market and to get correct strategic sequence.
Dyson future development is to develop new product with advance technology in it.
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REFERENCES
Books and journals
Agnihotri, A., 2016. Extending boundaries of blue ocean strategy. Journal of Strategic
Marketing. 24(6). pp.519-528.
Alam, S. and Islam, M.T., 2017. Impact of blue ocean strategy on organizational performance: A
literature review toward implementation logic. IOSR Journal of Business and
Management. 19(1).
Priilaid, D., Ballantyne, R. and Packer, J., 2020. A “blue ocean” strategy for developing visitor
wine experiences: Unlocking value in the Cape region tourism market. Journal of
Hospitality and Tourism Management. 43. pp.91-99.
Vieira, E.R.M. and Ferreira, J.J., 2018. Strategic framework of fitness clubs based on quality
dimensions: the blue ocean strategy approach. Total Quality Management & Business
Excellence. 29(13-14). pp.1648-1667.
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