Managing Innovation: Lime Case Study - Theory Application & Future

This report delves into the application of innovation theories, specifically blue ocean strategy and disruptive innovation theory, to understand the historical and future development of Lime, a micro-mobility platform. It begins by defining innovation and outlining the core principles, benefits, and limitations of each theory. The report then applies these theories to Lime, examining the company's background, business model canvas, and historical evolution, highlighting how Lime leveraged innovation to gain a competitive advantage. Furthermore, the report explores potential future developments for Lime, suggesting how the company can continue to innovate and adapt to the changing market landscape. This analysis provides valuable insights into the practical application of innovation theories in a real-world business context.

MANAGING INNOVATION
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Table of Contents
INTRODUCTION...........................................................................................................................3
Innovation theory.........................................................................................................................3
Blue ocean strategy /theory:..............................................................................................3
Disruptive Innovation Theory............................................................................................5
Application of the theory in historical development context.......................................................7
Company background........................................................................................................7
Business model canvas of Lime........................................................................................7
Historical Development.....................................................................................................8
Application of the theory in future development context............................................................9
Future Development .........................................................................................................9
Application of the theory to company's plans or their ideas:..........................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12
APPENDIX....................................................................................................................................13
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INTRODUCTION
Innovation refers to improve or replace something. It a technique through which a
product or a service is brought up to date or is renewed by application of new techniques,
processes or new ideas to create a new value in them (Irani, 2019). Blue ocean strategy of
innovation is the simultaneous tracking of differentiation and low costs to open up a new market
space and creating a new demand. It focuses upon creating and tapping an uncertain market
space and making the competition irrelevant (Carton, 2020). Disruption theory on the other hand
states that when a new firm or company enters a market tackling all the competitors by offering
better products and services the existing firms will move towards innovations to defend their
business (Terry, 2020). This report will discuss the innovation theories and its historic
development with a context to Lime company and separately. The future developments of the
company using the innovations will also be discussed.
Innovation theory
The innovation theories explains the patterns and the speeds at which new processes, new
ideas or product and services will spread through the population. The companies use the theories
of innovations to create product differentiations and gain competitive advantage over the
competitors. The companies also uses these theories to know how they can reduce or eliminate
the possible future threats. Theories of innovations may include:
Blue ocean strategy /theory:
Blue Ocean strategy is referred to as a market strategy where owners have potential of
gaining high profits as there is no or less competition. This strategy revolves around the product
or business which are less in nature or very few operate and provide their services (Au and
Tucker, 2018). This results in no pricing pressure for owners to sell their Lime products. They
can set any price and customer is ready to buy that stuff.
In today's world many businesses operate under pressure related to competition and they
are trying to do everything to gain market share. When the product or service comes under
pricing pressure there is always the possibility that business has to go under threats in reducing
prices, or they are too similar to competitors. This situation takes place when the business is
operating under saturated market. This situation is known as Red Ocean (Iruthayasamy and
Iruthayasamy, 2021).
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The blue ocean strategy aims to capture new demand and make competitors irrelevant by
introducing the product which have more superior features. Example: Before 2003 the
competition between companies were related to listening of music by using compact disks.
Apple launched ITunes which makes the user to download and listen to music anytime and
anywhere. Customer will become more attracted towards Lime as they have shown innovation in
environment.
Benefits of the theory: No or less competition: Competition in market is very less which can result in less supply
but more demand which results in increase in price and more profitable of owners. There
are less market entry barriers which makes a Lime to enter and can reach to top very
easily (Alam and Islam, 2017). Less crises on Lime: There are situation where market declines irrespective of less price.
Customers want innovations and superior quality products each time which makes them
to go for new market. Lime uses electrical vehicles. As a result, it makes them more
innovative in nature to sustain in market. High ROI: By entering into market with less competition is a complex process. But there
is great margin also to earn for Lime. Less competition gives rise to more margin as
owners can sell the product according to their want for profit.
 Defeat depression: The nature of blue ocean strategy is that the business is the only seller
of particular good in market. This makes the Lime always gain the deand of customer
solely which means that even in situation of depression the business can survive easily
because of availability of the demand received by consumers in the market (Caballero-
Morales, 2021).
Limitations of the theory: Defensive structure: When a seller finds a new ocean, sharks from saturated market aka
the Red Ocean and other oceans will come in the new market. The business have to
strategically setup the defensive structure to stop them from entering. This sructure
consist of upgrading their technologies and awareness of their brand which is a costly
option for Lime.
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 Lot of research: When a Lime opt for introduction of new product requires a lot of
patience, trust and preparation. Business also have to analyse the initial indicators of
cuustomer preference for confirming that fishing can not be done in dead sea. Lots of risk: When a business ventures into new market the early phase is to face big risk.
There could be the situation where customer won't understand root cause of product and
services because of the absence of fully developed technology or Lime has less
knowledge about market. Customer expectations: Every organization can not find what exactly a customer wants
from their products or services. If seller will able to identify the needs then to fulfil each
need is very costly and time-consuming thing. After analysing and spending cost it is not
sure customer will buy Lime transports or not. Goods quality: Since there is no competition in market a shark in blue ocean can often
provide low quality services to make more profits for Lime which also result in loss of
customers.
 Discrimination on price: Since there is only one shark in the ocean they can decide their
own price in market, with no competition to worry about. It has often been seen that Lime
charges different prices from different sets of consumers which causes price
discrimination for their product and services.
Disruptive Innovation Theory
Disruptive innovation is the process of entering the market with fewer resources and able
to challenge established businesses. The Lime enter at the bottom of the market and continues to
move up. This happens when the established ones try to sell the products only to most profitable
customers, and they leave downmarket customers which makes other business to develop new
products made for these customers and hence they enter the market and gradually reach to top.
Sometimes established ones ignored the fact that there is new entrant in market which also allow
small business to become the part of market (Si and Chen, 2020).
Generally, the disruptive theories are technologically straightforward which consist of off
the shelf components put together in a product structure that is often simpler than prior
approaches. They offer less of what the customers in established markets want and so could
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rarely be employed there. They offer a different package of attributes that are valued only in
emerging markets which are unimportant to mainstream.
Assumptions of the theory: Companies can sometime risk deaths with decisions to ignore
technologies that do not appear to address their customer's needs.
Benefits of the theory: Expansion in market: When a business adopts technology it will expand the market with
a larger extent than other conventional methods. With the introduction of electric vehicles
Lime has changed the consumer behaviour with regard to established ones that already
present in market. In starting, this step seems to be ineffective but after some time it
shows the real picture of growth. Modernization in processes: This innovation modifies how Lime will evaluate its
processes and how they will use them to grow. It helps in creating provisions of better
services and brings modification in their sector which further benefited the business
(Pandit and et.al., 2018). Start-ups support: To enter the market or to establish a start-up value in the country is
very difficult among already established ones in the country. Lime has brought electrical
vehicles which have the chance of rapid growth and outperform better from the existing
companies.
 Business growth Opportunities: The distruptive innovation gives chance to start-ups like
Lime to enter into the market and hold their position. If the existing companies will adopt
this innovation they will enjoy even more prime opportunities and can lead to their
business growth even faster (Liu and Meng, 2017).
Limitations of disruptive theories: Requires separate process: The theory of disruption needs a separate strategy process
then only it can be applied in any company. That process must be immediate and fouesed
more on opportunities which the company have anticipated, success and the problems
rather focusing on intending and focusing on improved understanding of what works and
what does not. Long process: Disruptive theories of innovations, when applied in a business cannot
achieve big profits due to their nature of addressing new markets or addressing low end
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of existing markets. The venture capitalists eventually grows impatient for businesses to
deliver profits.
 Does not counter behaviours: The process only focus on designing the products and
services. It does not focus on addressing the current behaviours of the customers or the
underlying aims of people that should be informing the designing of innovations.
Understanding the behaviours of customers is very difficult which is fully ignored in the
theory of disruption.
Application of the theory in historical development context
The theory of innovation can be applied to the company with the context to:
Company background
Lime is a company providing a micro mobility platform which distributes shared
scooters, bikes and other transportation vehicles for a short distance transportation purposes. It
offers applications to find a nearby scooter, bike or other vehicle in cities and campuses. The
current business model used by the company is self Driven rentals (Lime Plans to Add Moped-
Sharing to Scooter and Bike Services, 2019). It the emerging leader of all e-rental provides who
provides the easiest ways to use the products offered for simplified commuting. It also uses
transformative business model. The company is involved in closed loop processes, asset sharing
and usage based pricing. The company is a change adaptive organization and invests a lot in
changing according to the changing trends in the market. Because of its self driven model the
company Is earning good revenues.
Business model canvas of Lime
The company's key partners are Ninebot who is a Chinese company and Segway which is
an American manufacturer. They are the most important partners to Lime. The company is
involved in transportation business with key activities being providing vehicles like electronic
bikes and scooters, normal pedal bikes and car sharing systems. The company highly values it
customers and is using customer driven approach. Company's value proportions consists of
personalization, usage based pricing and collaborative eco-system. Distribution channels of the
company consists of local agencies and a personalized verified app of the company. Both of the
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channels are very easily available to the customers. In the country most of the population is
living a rich standard o f life. So they are the primary targets of the company (Global Lime
Market Business Strategy, 2021). The company's secondary target segment is college going
population. The other segment is the green segment i.e. the proportion of population who uses
eco-friendly products to save the planet. The company's products are easily available in majority
of the cities. The customers can access the products through local agencies, or they can use the
official verified app of Lime.
Due to low cost cycles the company's products earn well in the market. The company's
main revenue generation streams are direct sales, partnerships with other businesses and the
revenue generation through value creation.
KEY PARTNERS
 Ninebot
 Segway
KEY ACTIVITIES
It runs
 Electric
scooters
 Electric bikes
 Normal pedal
bikes, Electric
mopeds
 Car sharing
VALUE
PROPOSTION
S
 Personali
zation
 Usage
based
pricing
 Collabora
tive eco-
system
CUSTOMER
RELATIONSHIP
 Easy sign-up
 Cost friendly
 Easy access
 Environmental
friendly
CUSTOMER
SEGMENTS
 Primary
segment-
Millennial
population
 Secondary
segment-
College students
 Non customer
segment-
environment
friendly
customers
KEY RESOURCES CHANNELS
 Local agencies
 Personalized
app
COST STRUCTURE
 Low cost cycle
REVENUE STREAMS
 Partnership
 Value creation
Historical Development
The company initially started off with 125 bicycles. Then it expanded to other cities and
launched other bicycles too. It became the second bike share operator of the state at that time.
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After the success of the company decided to do trails of electric bikes. Then it started to develop
the transit pods, small self driving vehicles. The company introduced technology and innovations
as the company developed. After some time it applied for car services and got verified. After few
years the e scooter with larger wheels, built in suspension with various features was introduced.
The company adopted innovations and differentiation as it grew to stimulate the demand of its
products and created a competitive advantage over its customers. The company focused on
fulfilling the demands of the customers and forecast their future demands.
Company's development can be seen in the context to blue ocean strategy as the company
focused on creating product differentiating to tackle its competitors (Leavy, 2018.). The
company introduced innovations at each step of its development and created a competitive
advantage. The company also used the strategy of differentiated pricing to tap more of the
segments of the market.
Application of the theory in future development context
The theory of blue ocean and disruption can be used in the development of Lime
company in its future objectives and aims:
Future Development
Lime is planning to introduce mopeds to some fleets starting next year as it continues to
assemble a range of transport options intended to tempt people to give up their cars. This plan of
addition of Lime will bring the company in direct competition with its rivals such as the
Brooklyn and Revel Transit Inc., etc. In the view of Lime, mopeds are the form of transportation
which are more appropriate for the travel distance up-to five miles or for lugging around
groceries. It is considering to expand this strategy in all others cities it deals with later that year.
The company wants to gain the advantage of showing that somethings are better than car which
are also best for saving the planet.
The company has also announced that they will be increasing the investment of $50
million in their e-bikes, including new and imported hardware to expand the service to an
additional 25 cities (Lime says it will spend $50 million on a huge e-bike expansion, 2021). Their
new model will be launched in next year and will be expanded globally in next few years. The
company will be launching various new features like attaching sensors to the vehicles which will
ensure that the vehicles are handled carefully and are not abused. The company will be
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promoting their products as an open air and socially distanced transportation option which will
get the cities moving along with safety. The company will be focusing on lased focused building
quality, long-lasting hardware, improving our operations across the world and building close
relationships with the cities and communities it serves to ensure reliable, safe and responsive
micro-mobility service.
New features of e-bikes will be able to immediately make it the best shared e-bike
available upon its launch. The most impact-able feature of these e-bikes will be its swappable
battery which will be inter-chargeable with Lime's Gen4 scooter (Global Lime Market Business
Strategy, 2021). The company will be able to streamline the operations across vehicle types and
reduce the frequency of charging and re-balancing vehicle which means the more fully charged
vehicles as the customers needs. The additional features will include increased motor power to
help riders easily climb the hills. They will include phone holders which will allow them to
follow the navigation's and directions without stopping to check their phones and a handlebar
display that aligns with the scooters for standardized display across vehicle type.
Creative ideas for future development of Lime:
Lime can use few other ideas like renting the vehicles for special events like family
functions or the events. The company can decorate the vehicle for the customers for their special
events. The company can enhance its channels of distribution a little more and add other
distribution channels such as its physical stores in the cities . The customers will prefer to go to
the authentic and official store of the company more than the travel agencies it provides its
provides to. Also, the company can provide discounting feature to its customers who are loyal to
the company. This will promote the company's customer loyalty and decreased prices will attract
a lot of new customers. The company does not have any special feature for the women segment.
It can introduce the products which can attract female segment of the market.
Application of the theory to company's plans or their ideas:
The company's plans are in accordance with the blue ocean theory of innovation. The
company is planning to launch the products which are unique and differing from what other
competitors are providing to the customers in the market. According to the theory competition is
irrelevant because the company's product innovations will be more powerful in terms of
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profitable growth. The company's products which it will be launching next year are distinct and
will be attracting a lot of new customers in the market will create a competitive advantage for the
company. Here the competition will become irrelevant as the potential of Lime's products will be
deeper and wider in the market (Leavy, 2018). The company intends to shift the mindsets of
customers t5hat the mopeds are better than he cars. It will try to expand the horizons and shift the
understanding of customer's minds. The company will be targeting the untouched segments of
the market such as the soon to be customers, the unexplored customers and the refusing non
customers which the company can tap by their innovative and creative products (Karaoulanis,
2018).
CONCLUSION
It can be concluded that the innovations are improvements through which the companies
renew or update their existing products to introduce new products in the market. The blue ocean
strategy focuses upon the innovative differentiation introduced by the company which makes he
competition irrelevant whereas, the disruption theory focus on creating new products to tackle
the entry of new firms. The theory can be applied in case of the company Lime. The company
have used transformational business model to implement change and has adopted the theory of
blue ocean to introduce innovations. Lime will be introducing various products that will be
unique from the competitors to create a competitive advantage over them.
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REFERENCES
Books and journals:
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).
Au, A. and Tucker, J., 2018. Blue ocean strategy for microenterprises. International Journal of
Information, Business and Management. 10(2). pp.92-98.
Caballero-Morales, S.O., 2021. Innovation as recovery strategy for SMEs in emerging
economies during the COVID-19 pandemic. Research in international business and
finance. 57. p.101396.
Carton, G., 2020. How assemblages change when theories become performative: The case of the
Blue Ocean strategy. Organization Studies. 41(10). pp.1417-1439.
Irani, L., 2019. Chasing Innovation. Princeton University Press.
Iruthayasamy, L. and Iruthayasamy, L., 2021. Blue Ocean Versus Red Ocean. Understanding
Business Strategy: Confusion and Consensus. pp.93-114.
Karaoulanis, A., 2018. Strategic transformation and innovation towards Blue Ocean creation in a
changing corporate reality.
Leavy, B., 2018. Value innovation and how to successfully incubate “blue ocean” initiatives.
Strategy & Leadership.
Liu, J.H. and Meng, Z., 2017. Innovation model analysis of new energy vehicles: taking Toyota,
Tesla and BYD as an example. Procedia engineering. 174. pp.965-972.
Pandit, D., and et.al., 2018. Disruptive innovation and dynamic capabilities in emerging
economies: Evidence from the Indian automotive sector. Technological Forecasting and
Social Change. 129. pp.323-329.
Si, S. and Chen, H., 2020. A literature review of disruptive innovation: What it is, how it works
and where it goes. Journal of Engineering and Technology Management. 56.
p.101568.
Terry, O., 2020. Disruption Innovation and Theory. Journal of Service Science and
Management. 13(03). p.449.
Online referencing:
Global Lime Market Business Strategy. 2021. [Online]. Available
through:<https://www.wboc.com/story/44377494/global-lime-market-business-strategy-
2021-by-industry-news-emerging-trends-demands-key-players-update-business-statistics-
research-methodology-and-forecast-till-2026>. [Accessed on 30 july 2021]
Lime Plans to Add Moped-Sharing to Scooter and Bike Services. 2019. [Online]. Avaialble
through: <https://www.bloombergquint.com/business/lime-plans-to-add-moped-sharing-
to-scooter-and-bike-services>. [Accessed on 30 July 2021]
Lime says it will spend $50 million on a huge e-bike expansion. 2021. [Online]. Available
through: <https://www.theverge.com/2021/3/1/22303364/lime-ebike-expansion-new-
cities-50-million-investment>. [Accessed on 30 July 2021]
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