Analysis of Instagram's Innovation in Business Management

This report provides a detailed analysis of Instagram's innovative strategies and its impact on business management. The report begins with an introduction to the concept of innovation and its relevance to Instagram's success as a social media platform. Task 1 explores the nature of innovation brought by Instagram, highlighting its unique approach to photo sharing and its impact on communication. It also delves into the drivers of innovation, including changing cost structures, increasing demand for advertising, and technological advancements such as smartphone media and third-party integrations. The report critically evaluates the factors that contribute to and hinder innovation within Instagram, emphasizing the importance of leadership, teamwork, and open-mindedness. Furthermore, the report assesses the extent of disruptive innovation employed by Instagram, examining how the platform created a new market and value chain, ultimately leading to its acquisition by Facebook. Overall, the report offers insights into Instagram's innovative journey and its implications for business management.

Critical issues in Business
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1) Nature of innovation brought by Instagram............................................................................3
2) Drivers of innovation...............................................................................................................4
3) Critical evaluation ...................................................................................................................5
4) Extent of disruptive innovation...............................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Sustainable competitive advantage can be acquired by business organisations when
innovative products and services are provided to customers. In this report, innovation and its
dimensional configuration has been explained with regards to Instagram. Being a social media
networking giant, the company has helped in giving a new perspective to communication. This
report will help in understanding Instagram's innovative aspect which has helped the company to
acquire a strong position in global markets.
TASK 1
1) Nature of innovation brought by Instagram
Instagram being one of the most popular social media network within a short period of
time from its launch has been able to capture a place amongst global digital brands due to its
innovative strategies. Right after Facebook's extra-ordinary success, the creators of Instagram
grabbed an opportunity of building a social media community which enables users to share their
stories with help of photographs. Innovation is the most important element of a successful
business idea or strategy (Jussila, Kärkkäinen and Aramo-Immonen, 2014). Entrepreneurs have
to inculcate innovative strategies in their products and services. The nature of innovation that
was introduced by Instagram in the social media industry is uniqueness with technology. The
basic idea of developing a platform for individuals across the world to share their photographs
with the world excited individuals. In the earlier times, people could express their thoughts and
ideas or exchange their feelings with the individuals across different cities and countries with the
help of letters and telephone calls (Bruns, 2014).
The need for better communication channels led to developments and inventions in the
technology. Major attraction point in this technological advancement was invention of internet
and then the social media. People across different parts of the country can communicate with
their relatives and friends through social media platform (Connell, Kriz and Thorpe, 2014).
Instagram was created by Kevin Systrom and Mike Krieger. The purpose behind development of
this application was to develop a photo editing service that enables the individuals to share their
stories in the form of pictures. With production of android devices Instagram became famous
amongst tech-savvy customers too quickly.
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Innovation is an entirely different aspect when compared to invention. Whenever, a new
idea or product is produced in the existing format then the innovation takes place. The makers of
Instagram identified specific needs of the individuals and targeted these with help of web based
application and an efficient platform for social networking (Nguyen, Melewar and Chen, 2015).
Eventually, their unique application and monopoly in social media market led to extreme
success and dominance. Major customer share was in hands of the company with business
benefits in the form of expansion offers from other social networking sites like Facebook, Orkut,
etc. The company was purchased by Facebook in a $1 billion.
Over the past few years, social media marketing techniques have been evolved. The
perception of individuals for social networking sites has changed. They started utilising this
source of connecting with the world as a medium of earning. Companies found Instagram as an
opportunity to connect with all their stakeholders and shareholders. Another innovative aspect
that was launched by Instagram in social media industry was hashtag. Individuals that are using
this application can create their own customised hyperlink by adding the symbol of hashtag. This
tool also became popular amongst the online crowd (Sigala and Kyriakidou, 2015). Proclivity of
customers towards social media sites and their usage increased. This led to increasing profit of
the company.
From above mentioned facts and details, it is quite clear that whenever an innovative and
creative product is launched in the market with an attribute of uniqueness and no repetition, then
probability of its success increases. Instagram was a unique product and an innovative idea that
was both attractive and profitable from the business perspective (Christensen, Raynor and
McDonald, 2015). Strategies that are developed with this attribute have no chance of failure. The
more products are unique and unpredictable, greater are the chances of its success.
2) Drivers of innovation
Following are the main drivers of innovation for Instagram in social media industry:
1. Changing cost structures.
2. Increasing demand of companies to advertise their products and services.
3. Shifting or trending technologies.
4. Expansion of smartphone media and usage.
5. Third Party integrations.
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Aforementioned factors are the drivers of innovation in Instagram. When an individual
opts for certain product or service, the initial days are very fascinating and full of excitement.
People develop a liking towards that particular product and service. This likeability helps in
developing brand loyalty of customers if innovative strategies are incorporated (Osiyevskyy and
Dewald, 2015). Companies have to manage this transition by bringing in new features and
exciting components which will further help in maintaining existing customer share.
Cost is the first and foremost element which is considered before purchasing or using
product and service. The cost free or exemption of subscription fee for customers who use
Instagram automatically attracts a large number of individuals. They feel like internet sharing
platforms like social media communities is the most cost effective and innovative option of
communication (King and Baatartogtokh, 2015). On the other hand, free of cost advertising is
enabled on this platform. From major business organisations to remote social groups, major
digital marketing strategies are marketed through this platform.
Technology is growing on a large scale. Within just a few years, the level of
technological integration with business organisations has helped industries to develop deep
routed connections with their customers. Smartphones have enabled the users to operate internet
anywhere and anytime. They are feasible and viable in terms of profits and market acquisition.
Most important driver of innovation for the company is third party integration (Colombo,
Franzoni and Veugelers, 2015). Tie-ups with popular brands and companies also help in bringing
innovation in the basic functioning and working structure of Instagram. For instance,
Hipstamatic is a photo-editing application which is internet based and has inbuilt filters and
options for editing a photograph. The third party integration feature of Instagram has given the
users diverse range of filters. The easy access of users for sharing their photos directly with the
social networking site is also an innovative element of this feature or driver (Vecchiato, 2016).
3) Critical evaluation
Every time a business organisation takes certain strategic measures in bringing
innovation to the company, two types of factors arise. These are:
1. Contributing
2. Hindering
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The growth of business innovation is entirely dependent on the configuration of these
factors and their impacts. Leaders and organisational managers are the most important people
who contribute to growth and development of the company. Instagram can experience a smooth
implementation of strategies when vision and aim of leaders is clearly communicated to the
employees and workers (Dru, 2015). Social media industry is growing rapidly. The success of
any company in such a competitive era is guaranteed only when there is continuous unhindered
innovation. Monotonicity in working strategies leads to inculcation of barriers and roadblocks.
When working styles of individuals are same, then no up-gradation of technology happens. This
implies that customers won't be experiencing anything new in Instagram's application and as a
result, the company shall face severe losses (Baughman, Gao and Petrushin, 2015). Less
motivation and centralised functioning of organisation leads to disruptions in innovation. Every
functional group that is participating in the development program of Instagram must be
decentralised and exempted from overpowering leaders. Autocratic leaders and no changes in
perspective are two major roadblocks for instigation of innovation in social media industry.
On the other hand, when business objectives are entirely aligned with functioning of
organisation then innovation is strengthened. Aspiration for excelling in global markets can be
achieved when there is a vision (Innovation can be key to standing out in a crowded market,
2017). Effective leadership helps in understanding organisation to recognise needs and work up
ideas that will enhance growth and development. When vision is clearly communicated to
employees then innovation is possible. Teamwork is a significant component that helps in
development of the company. Decision making is quick and simple as compared to ineffective
team management. Incremental innovation is fostered in teams and groups were team work is not
hindered by egos and clashes. Instagram can experience unhindered innovation when market
drivers are open minded (Holt, 2016).
Social media industry is a vast market with diverse group of customers. A high amount of
risk is involved with this industry. Instagram has to take this risk and apply certain ideologies
effectively for understanding the need and acceptance of innovation. Absurdity measure should
be controlled and irrelevant actions must be curbed.
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4) Extent of disruptive innovation
Disruptive innovation is a technique of creating an entirely new market and the value
chain network by disrupting or demolishing the existing market. Basically, powerful thinking
and implementation of ideas is required in successful disruptive innovation. Growth is a for-sure
outcome of this strategy but there are certain more aspects. Before arrival of Instagram, there
were no such social networking platforms that enabled users to edit and click their photographs
in a professional way without getting the expertise (Bruns, 2014). The innovative and unique
approach of creators of Instagram have enabled individuals to unlock this feature of social
networks and build their own photo-community. Existence of less competition or it can be
considered as a monopoly in the initial stages led to better market acquisition without much
complexity.
It won't be incorrect to state that Instagram was a kind of disruptive innovation but only
in certain aspects. The implementation strategy involved risks with development of new markets.
Being one of its kind web application, Instagram witnessed instant globalisation. Apart from the
fact that Facebook's growth and lack of integration with these sites had caused disappointments
but company explored this as an opportunity for innovative new possibilities. Disruptive
innovation took place but when Instagram was purchased by Facebook. Entirely new market was
set with a completely different objective (Connell, Kriz and Thorpe, 2014). The stories and
feelings of individuals were in the form of photographs as compared to words on Facebook.
Moreover, '#' or Hashtag was another element of this website that helped individuals to connect
globally with a particular event or thing.
From the above findings, it is quite clear that Instagram was not a disruptive innovation
until its acquisition by Facebook. The company was able to develop its own market with a new
set of customers with no competitors. It is also understood that disruptive innovation is basically
destruction of existing markets but since Instagram did not have any existing markets, its
differentiability is quite clearly visible (Nguyen, Melewar and Chen, 2015). Although the partial
meaning of this concept also relates to using of new technologies instead of the traditional
methods. On this perspective, it can be inferred that Instagram has chosen disruptive innovation
tool as a method for enhancing its market share. The company has adopted new business models
and technologies in the form of better compatibility with multimedia platforms that is tablet, pc,
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desktop, apple phones, android devices, etc. Web based applications or smart phones apps is also
a form of disruptive technology used for acquiring more market share.
Compatibility of this application with other devices and platforms has increased its
usability and accessibility to individuals that are fit or physically impaired. Instagram has
developed a lot since its foundation and disruptive technological innovation has helped the
company achieve its desirable customer share within stipulated time (Sigala and Kyriakidou,
2015). The extent to which Instagram can be recognised as a disruptive innovation is understood
by the fact that company uses latest technology and brings in a new element very frequently in
its operating platforms. The company is also able to meet its business objectives because of this
feature. Individuals that are using Instagram as a social media network are not disappointed with
the company due to this approach of innovation (Christensen, Raynor and McDonald, 2015).
CONCLUSION
This report helps in understanding the factors that led to build up of innovative strategies
for Instagram. Moreover, there are certain components that are described in this report which
describe their contribution to the innovative development of Instagram in this severely
competitive social media industry. Lastly, the orientation of Instagram in terms of disruptive
innovation has been discussed.
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REFERENCES
Books and Journals
Baughman, A. K., Pan, J. Y. and Petrushin, V. A., 2015. Disruptive innovation: Large scale
multimedia data mining. In Multimedia Data Mining and Analytics . Springer International
Publishing. pp. 3-28.
Bruns, A., 2014. Media innovations, user innovations, societal innovations. The Journal of
Media Innovations. 1(1). pp.13-27.
Christensen, C. M., Raynor, M. E. and McDonald, R., 2015. Disruptive innovation. Harvard
Business Review. 93(12). pp.44-53.
Colombo, M. G., Franzoni, C. and Veugelers, R., 2015. Going radical: producing and
transferring disruptive innovation. The Journal of Technology Transfer. 40(4). pp.663-669.
Connell, J., Kriz, A. and Thorpe, M., 2014. Industry clusters: an antidote for knowledge sharing
and collaborative innovation?. Journal of Knowledge Management. 18(1). pp.137-151.
Dru, J. M., 2015. The Ways to New: 15 Paths to Disruptive Innovation. John Wiley & Sons.
Jussila, J. J., Kärkkäinen, H. and Aramo-Immonen, H., 2014. Social media utilization in
business-to-business relationships of technology industry firms. Computers in Human
Behavior. 30. pp.606-613.
King, A. A. and Baatartogtokh, B., 2015. How useful is the theory of disruptive
innovation?. MIT Sloan Management Review. 57(1). p.77.
Nguyen, B. and et. al., 2015. Brand innovation and social media: Knowledge acquisition from
social media, market orientation, and the moderating role of social media strategic
capability. Industrial Marketing Management. 51. pp.11-25.
Osiyevskyy, O. and Dewald, J., 2015. Explorative versus exploitative business model change:
the cognitive antecedents of firm‐level responses to disruptive innovation. Strategic
Entrepreneurship Journal. 9(1). pp.58-78.
Sigala, M. and Kyriakidou, O., 2015. Creativity and innovation in the service sector. The Service
Industries Journal. 35(6). pp.297-302.
Vecchiato, R., 2016. Disruptive innovation, managerial cognition, and technology competition
outcomes. Technological Forecasting and Social Change.
Online
Innovation can be key to standing out in a crowded market. 2017. [Online]. Available
Through:<http://www.telegraph.co.uk/connect/small-business/innovation/innovation-key-
to-standing-out-in-crowded-market/>. [Accessed on 20th February, 2017].
Holt, D., 2016. Branding in the Age of Social Media. [Online]. Available
Through:<https://hbr.org/2016/03/branding-in-the-age-of-social-media>. [Accessed on 20th
February, 2017].
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