IBM Typewriter: Innovation, Leadership, and Market Dynamics

This report provides a comprehensive analysis of IBM's typewriter innovations, market strategies, and competitive landscape. It begins by examining technological breakthroughs and distinguishing between inventions, minor innovations, and major innovations. The report then explores the sources of innovation, including manufacturers, suppliers, and users, and applies the concepts of demand pull and technology push to the development of IBM's Selectric series. Furthermore, it delves into how IBM's vision, leadership, and culture shaped its approach to innovation. The report also analyzes the competition between electric typewriter product lines, including the application of S-curves, performance metrics, and the 4Ps of innovation. Finally, the report highlights IBM's success factors, ways to maintain their advantage, and the role of frugal innovation.

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Table of Contents
Introduction.................................................................................................................3
Main findings............................................................................................................... 4
I. Technological breakthroughs and innovations..................................................4
1. Inventions.........................................................................................................5
2. Innovations......................................................................................................6
II. Sources of innovations.......................................................................................6
III. Demand pull and technological push..............................................................7
1. Original Selectric.............................................................................................8
2. Selectric II and Correcting Selectric II..........................................................8
3. Selectric Composer..........................................................................................8
4. Selectric III......................................................................................................9
IV. Vision, leadership, culture shaped IBM and innovation dilemma................9
1. Vision, leadership and culture shaped IBM..................................................9
2. Innovation dilemma......................................................................................10
V. Competition between electric typewriter and electric typewriter product-
line.......................................................................................................................... 10
1. The S-curves..................................................................................................11
2. The performance of IBM..............................................................................11
3. The 4Ps of innovation of IBM.......................................................................13
4. Innovation funnel..........................................................................................14
VI. Task 6............................................................................................................... 15
1. IBMS success factors and ways to take the lead and maintain their
advantage...........................................................................................................16
2. The role of frugal innovation in IBM...........................................................16
Conclusion.................................................................................................................17
References.................................................................................................................. 18
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Introduction
The report will highlight the inventions and improvements of the typewriter.
Furthermore, different theories and models will be applied to further analyze those
improvements. At the same time, different types of innovation are distinguished and
applied to the International Business Machines company (IBM).
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Main findings
I. Technological breakthroughs and innovations
As the latest synthesis of scientific expertise and engineering capabilities to
create basis for new technological developments, Mr Martin (1984) defines
technological breakthrough inventions, or in other words, "hi-po" inventions. In the
other hand, innovations mean something else. In his definition as an innovation
process, Roberts (2007) also shared the same view: (1) information creation, (2)
concept generation for current goods, (3) idea development and (4) usage production.
Innovation can, however, be divided into two categories separate from innovation:
small/incremental innovations and major innovation (Christensen,1997).
A concise description with proof is given below to explain the distinctions
between these three concepts.
Inventions Minor Innovation Major Innovation
A new field of technology Improving existing products’
features (Christensen, 1997) but
small
Establish a new market or exclude
current products (Colombo et al,
2015) and it is revolutionary
innovation.
Generate new ideas
and work with those ideas
Generating innovations from technologies – turn them into a
commercial or practical application
Commercialization ability
is not required
Commercialization ability is required
Among the three terms: invention, minor innovation and major innovation, there
are a variety of differences. Since the invention must follow two requirements, namely
creativity and technology, innovation does not cause it to be new. They are made from
current technologies and are then sold on the market. Another distinction is that
although the invention is not necessarily marketable while innovations are. There are
several variations between small and major innovations. Christensen (1997) applies to
small innovation to improve current product efficiency. Big products are in the
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meantime considered to build new markets or also to replace current products
(Colombo et al, 2015).
More precisely, inventions act as the basis for possible potential improvements,
although they have no economical advantages. Meanwhile, the major distinction in the
degree of technical advancement and new knowledge reflected in inventions is
between radical innovations and incremental innovations, according to Dewar and
Dutton (1986), as radical innovations are important revolutional improvements while
incremental innovations are small transformations and changes.
There must also be consideration of the disparity between the creative phase
between inventions and innovations. As inventions are fresh, the creative process just
discovers new ideas and makes them work. In the other hand, the innovation process
involves the generation of concepts from prototypes and their development to a
commodity that can be commercialized, as noticeable in the rounds table at the 1970
annual spring IRI conference (Robert,2007). However, while innovations are, the
invention can not always be commercialized.
1. Inventions
All of the below products are considered invention because they have not been
commercialized yet and are the initial new ideas for the later typewriter.
Time Inventor Description
1575 Rampazetto Impressing letters
1714 Henry Mill Impressing and transcribing of letters
1802 Agostino Fantoni Typewriter for the blind
1801-
1808
Pellegrino Turri
1823 Cilavegna Tachigrafo- a new typewriter model
1829 William Austin
Burt
Machine is on the “ the first typewriter” list
1843 Charles Thurber It support the blinds
1855 Ravizza An advanced machine that allows users to see the
writing as it is entered
1861 Father Azevedo A typewriter made from basic materials
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1865 John Jonathon
Pratt
Pterotype insipres other inventors
1864-
1867
Peter Mitterhofer a fully functioning prototype typewriter
2. Innovations
There are many improvements to typewriters that came about after 1870.
Innovation is known as radical innovation that is the use of electromagnetic escapers
in typewriters first commercialized by Malling-Hansen; and the first commercially
successful machine was the Sholes and Glidden typewriter. The reason these two
innovations are considered radical innovation is because they were the first
commercially available typewriters and it also created a new market - the typewriter
market.
Incremental innovation that was a Daugherty Visible typewriter with
improvements had overcome the weakness of not seeing characters when typing.
Then, another incremental innovation is usually keyboard innovation. For example,
Remington has created a QWERTY keyboard for user convenience to improve typing
speed. Some keys such as shift key, "shift lock" key, tab key, and dead key have also
been added to improve user convenience. Some other features are also considered
incremental like some machines are created to print large sizes depending on needs;
the colors were changed instead of the usual black text, and a reduction in the
typewriters' noise was produced. These features are all improvements to improve the
performance and overcome the weakness of the previous typewriter.
II. Sources of innovations
The Von Hippel theory (1988) shows the three primary innovation sources are
manufacturers, suppliers, users and others. Suppliers are the first outlet to be
indicated. The supplier plays a key role as an innovation source according to Henke
and Zhang (2010), as they know what their client (manufacturer) wants and needs.
Secondly, manufacturers are a driver of creativity and the way they run R&D in their
businesses is most shown. Thomke and Hippel (2002) observed that it is the
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responsibility of manufacturers to understand consumer demand consistently more
than any other, because the customer's needs are frequently complicated and shift
quickly, and that it is highly expensive and time-consuming. In addition, as users
identify any of the product that they have not yet fulfilled, they make modifications to
it. Rivals or previous inventions may also be a source of innovation.
In the case of the early models of electric typewriter, firms such as
Blickensderfer, Northest Electric Company or Varitype Corporation, IBM and so on;
and inventors like Krums, Smathers are manufacturers. The typewriter products in
turn are introduced with new and unique innovative features. Blickensderfer has
produced a typewriter that changes individual typebars to a cylindrical typewheel;
Krums's teletypewriter also uses a typewheel instead of individual typebars. In 1914,
Smathers also invented a power-operated typewriter. Then, Northeast in 1929 also
produced the first electromatic typewriter. Finally, in 1935, IBM produced the electric
typewriter model 1, and continued to improve on the next models and created the
concept of proportional gaps in model 4. In addition, another manufacturer, that is
Varityper corporation, also created a machine of the same name with the modification
of font for text.
Next, because the electric typewriter has only one electric part, the motor,
suppliers mainly innovate electric motors to improve efficiency. The Smathers
typewriter, for example , while Smathers' design was developed by Northest, before
selling its own typewriter, this company was also the supplier of electric motors, for
the Remington Electric typewriter, according to Smathers' typewriter. In Brief, they
played a role in improving the electric motor for the Remington typewriter. In
addition, some suppliers provide innovations to typewriter supplies such as fabric
ribbons to carbon-film ribbons on IBM Model 4 typewriter to improve print quality
(Beattie and Rahenkamp, 1981).
Users are also a source of innovation for typewriter companies. The innovative
idea stems from the user's perception of using a typewriter product. For example, IBM
evaluates users' experience of word quality to help the company improve to clearer
and sharper letters; or recreating the look of the typesetting page and adjusting the
proportional spacing in Electromatic Model 4 typewriter. More than that, Varityper
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creates a typewriter that can change the font so that users can use multiple fonts on a
document.
III. Demand pull and technological push
Demand pull and technology push are considered two controversial driving
forces behind technological changes (Choi, 2017). Demand pull is described as
driving technical advances while consumer demand is driving. Technology Push, on
the other hand, applies to whether the company finds a technology they will grow
more without any demand. In this situation, technological advancement is the driver of
demand in the industry (Goldin and Lane, 2013).
1. Original Selectric
Compared to earlier electrical versions, IBM Selectric (IBMS) was first built on
demand-pull. IBM listens to the customer experience to fix weaknesses that exist in
the old version. The proof is that this version has replaced the typewriter bars and the
movement with a spherical printing element that has made the task of typing boring
and enjoyable. For example, it eliminates keystrokes when typing multiple keys at the
same time, or allows users to change the font on a document and eliminates the need
to drag paper across a fixed print position. In addition, this machine also replaces the
"clack" sound with a quieter sound for the user.
2. Selectric II and Correcting Selectric II
Selectric II editions are again enhanced with technology-push. Selectric II has Dual
Pitch mode to convert the number of words from 10-12 characters per inch or enable
character conversion to align text. However, the Correcting Selectric II version
follows a demand-pull model; it has added in-house editing, which eliminates the
need to use duct tape, or text remover through a change to a repairable film ribbon.
This idea also stems from users when they have to use detergents to manually erase
text which takes time and effort.
3. Selectric Composer
This version has right-aligning capabilities, with improvements to the character factor
and proportional spacing for each version. In addition, machines like MT / SC or MC /
SC use magnetic cards to store internal memory. It can be seen that technology-push
has been applied when they are not important to customer needs through the use of an
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expensive Selectric element, only focusing on technology development to bring more
features to the user.
4. Selectric III
The Selectric III was introduced in 1980, but it did not dominate the typewriter
industry like earlier versions. This version also focuses primarily on technology as it
evolved from an 88-character keyboard to a 96-character keyboard. However, this
improvement has caused frustration for many typists because when opening more
characters, the other buttons will have to shrink, making it more difficult to type . That
is why it is considered technology-push because IBM does not study the needs of the
customer, but still develops, not even interested in the annoyance of innovation that
the Selectric III brings.
IV. Vision, leadership, culture shaped IBM and innovation dilemma
1. Vision, leadership and culture shaped IBM
According to Mission-statement.com (2019) summarizes, IBM's vision is “to be
the most successful and significant IT company in the world; helping consumers to
use technology to address their challenges is effective; this extraordinary technology
has been successfully introduced to new consumers; important since much of what is
spent in the sector remains the core capital ”. Success is emphasized quite a lot in
IBM's vision. IBM succeeded in bringing the Selectric typewriter to middle to high
end schools and offices and making it the standard in every office. Plus, they also
succeed commercially, having dominated the office typewriter market for almost two
decades.
IBM's culture is outlined in the 2020 annual report, in which their culture
consists of 4 key areas: growth, inclusion, innovation, feedback. Innovation is
mentioned in both culture and vision as an integral part of IBM. Employees are
always encouraged to innovate to come up with breakthrough technology ideas and
learn from mistakes. Even the IBM website talks about innovation, changing
leadership styles to suit employees to inspire people to go further for customers and
provide high-quality experiences that create excellent business results (ibm.com, n.d).
IBM's electric typewriter model is the perfect example of their level of creativity.
With each typewriter product line released, in comparison to previous generations,
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IBM is determined to provide customers with exceptional characteristics and
enhancements. In conclusion, IBM's vision, culture and leadership have significantly
shaped IBM's innovation.
2. Innovation dilemma
Christensen (1997) pointed out three reasons that, even though well managed but
can still fail, enterprises are: the difference between sustaining and disruptive
technologies; the trajectory of market demand versus technology innovation;
breakthrough technology with rational investment.
Olivetti's first electronic typewriter was born in 1976 and gradually replaced
IBM's Selectric machine; the reason that IBM failed at Olivetti's small and new
business was that Olivetti's technology was distuptive innovation, which had disrupted
the IBM Selectric typewriter market. According to Utterback (2007), by 1977, at least
30 companies began to manufacture personal computers (PCs); and 1981 recorded
half a million PCs figuring out how to approach the business market. It is the PCs that
have largely replaced typewriters in the United States. This enabled IBM to realize the
potential of PCs as well and quickly move into the personal computer market. 1981
was also the year IBM introduced the groundbreaking PC that quickly captured 30%
of the business market (Utterback, 2007). Then, due to the decline in typewriter sales,
IBM also completely exited the typewriter market in 1991. In this case, the typewriter
is sustaining technology and it is the PC that is disrupting the typewriter market, so
IBM turned to this market to continue its business. If IBM would remain in the
typewriter market and enter the electronic typewriter market, maybe they won't be
able to compete with Olivetti because Olivetti typewriter has much better innovations
than IBMS; and difficult to compete with a new market that was the personal
computer market that was emerging at that time.
As analyzed in Part III, it can be seen that IBM often applies technology-push
models, which can be concluded that IBM often does not understand what customer
needs are and that IBM's decision-making is very indifferent to customer. This is also
a weakness that prevents IBM from entering the electronic typewriter market.
V. Competition between electric typewriter and electric typewriter product-line
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1. The S-curves
IBM Selectric typewriter Olivetti Electronic typewriter
Time
Performance
1994
2. The performance of IBM
As observed from the S-curves chart above, it is easy to see that the dominance
of the IBMS typewriter for almost 20 years began in 1961. Selectric's performance can
see a sharp increase after the early years of development. machine. Then, when
Olivetti introduced the first Electronic typewriter in 1976, although this machine did
not have the ability to topple Selectric, it turned the Selectric's spike to a slight
increase until it peaked. The proof for this peak is IBM's market share of 94% in 1978
(Whitehouse, 1982). Then, due to the decline in typewriter sales of the following
years, IBM stopped production in 1991 and completely exited the market.
1976 was the year when Olivetti began releasing his first electronic daisywheel
typewriter, which was when IBM was about to face the challenge of a new typewriter
market. Olivetti series machines have outstanding improvements over IBM Seleectric
machines such as display screen, floppy disk memory storage. In addition,
Whitehouse (1982) also offers some improvements by Olivetti as it helps users see
and edit text on the screen before printing out the entire document.
In fact, in the 1970s, machines using daisywheels appeared, however, it was not
a competitor that could challenge IBM, a company that dominated the typewriter
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T1 (1976) T2 (1991)1961

industry at the time. It was not until the 1980s that IBM began to face the challenge of
new market competition. The New York Times (1984) summarized, 510,000
electronic typewriters were sold in 1983, and this number is expected to increase to
700,000 printers in 1984 and 1 million in 1987. Meanwhile, also according to the New
York Times, only about 540,000 electric machines were shipped in 1983 and were
estimated to be less than 100,000 in 1987. These numbers demonstrate the
unpredictable challenges that IBM faced.
At the time of T1, the time Olivetti launched their first electronic typewriter, that
was also the time when the daisywheel technology was present and also gradually
popular, so this company did not have to face many difficulties. from a technology
restriction to bring it to market but only with difficulty from a very stubborn
competitor, IBM. IBM at the time of T1 was in the midst of their growth, and they
even had machines that closely resemble Olivetti, like a hybrid typewriter that
included printer capabilities. In addition, IBM's performance was slowing down at the
time as Selectric's innovative ideas were no longer groundbreaking and the ideas were
also limited.
IBM after its peak period, according to Whitehouse (1982), had to reduce the
price of some typewriters, such as a reduction from $ 950 to $ 895 for a Selectric III
machine to compete with emerging competitors. On the other hand, proof that IBM's
performance was fine is that sales at the time were estimated to have grown 50%
when the IBMS System 2000 was introduced (nytimes.com, 1984). Thus, IBM still
enjoy their performance advantage instead of cost advantage.
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