Innovation and Strategy: Made.com's Business Analysis Report

This report provides a comprehensive analysis of Made.com's innovation strategies, focusing on the application of the Blue Ocean Strategy and the Diffusion of Innovation (DOI) theory. It begins by defining innovation and its significance in business, followed by an overview of the Blue Ocean Strategy, highlighting its principles and processes. The report then explores the DOI theory, detailing the adopter categories and factors influencing the adoption of new innovations. A significant portion of the report is dedicated to examining Made.com's past operations through the lens of the Blue Ocean Strategy, showcasing how the company differentiated itself by offering customizable furniture and gaining a competitive edge. Finally, the report discusses how Made.com can apply the DOI theory to its future operations, ensuring continued innovation and market success. The report concludes by summarizing the key findings and implications of these innovation strategies for Made.com.

Managing Innovation

Table of Contents
INTRODUCTION...........................................................................................................................3
Innovation Theories.........................................................................................................................3
Blue Ocean Strategy:...................................................................................................................3
Diffusion of Innovation (DOI)Theory:........................................................................................5
Application of Blue Ocean Strategy in Made.com’s Previous Operations.....................................6
Application of Diffusion of Innovation Theory to Made.com Future Operations..........................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation can be defined as the process of converting an idea or invention already
existing in the markets into valuable goods and services which consumers can make use of in
exchange of money. Innovation can be of many types such as technology, machinery, equipment,
music or business processes and paradigms, but all are immensely influential for the growth of
the innovating organisation in the markets in which it operates in. Innovation provides business
organisations with a competitive edge to compete against their perceived rivals in the consumer
markets while increasing their operational performance, efficiency, productivity and profitability.
The prime objective of innovating is to add additional value to an already existing product or
service in the market in order to make it more accessible, efficient and effective for the
consumers or business organisation (Sitinjak, Pramawijaya and Gunawan, 2018). In this report
we assess the impact of innovation theories on the business organisation Made.com a designer
and retailer of furniture and homewares operating from its headquarters in London, England. The
business was founded in 2010, 10 years ago and conducts their business through online stores
and experiential showrooms across Europe, employing 590 people for its operations as of 2020.
Innovation Theories
Business organisations can make use of and implement into their operations a plethora of
innovation theories with the intention to improve their product or service innovation operations
and to gain a competitive edge against their competitors in the consumer markets. Innovation is
essential to a business organisation’s operational growth and development as it provides the
business organisation with increased operational performance, efficiency, productivity and
profitability in the consumer markets. Some widely used and successful innovation theories are
as follows:
Blue Ocean Strategy:
This innovation theory was first put forward by Renée Mauborgne and W. Chan Kim in
their book titled Blue Ocean Strategy as a critique to Porter’s force business model which
according to the author’s creates merciless competition in the consumer markets, because of

which business organisations remain in ‘red oceans’ which is further discussed in the report.
Blue Ocean Strategy encourages business organisations to pursue lower costs of products and
high product differentiation, from the products offered by their competitors in the consumer
markets with the intention to create new consumer demand in the market and open up fresh
market space for the business organisation. Blue Ocean Strategy operates on the principle to
make the competitors of a business organisation in the market irrelevant by effectively creating
and capturing uncontested fresh space in the market (Ellinger and et.al., 2020). Blue Ocean
Strategy specifies the existence of two kinds of oceans in the market Red and Blue Oceans. Red
oceans comprise of all the business organisations currently operating in the market. In such
oceans or markets, the boundaries are universally accepted and defined with the rules of
competition known. In contrast, blue oceans are made up of fresh market space, uncaptured by
any business organisation in existence. Blue oceans provide business organisations with limitless
opportunities to grow and expand their business organisation for profits. In blue oceans,
competition of a business organisation is rendered irrelevant. Blue Ocean Strategy operates on
four major principles:
 Reconstruction of Boundaries: Businesses first have to reconstruct market boundaries
with the help of innovative technology or processes in order to gain a competitive
advantage against their competitors.
 Innovative Focus: Businesses have to focus on operational innovating thinking in order
to evaluate what needs of customers are currently unsatisfied in the current markets and
innovate or develop products or services which can meet these unsatisfied requirements
of consumers.
 Future Demand: Through their innovations, businesses need to attract potential clients in
the future who are not currently part of the existing market share of the industry for
various reasons (Plakhotnik, Zybrichev and Smirnov, 2019). In this way, businesses can
effectively increase their future market share in an effort to expand and grow their
operations.
 Strategical Plan: Businesses need to strategically develop a plan that identifies all the
issues and problems it might face during the adoption phase of its innovative products or
services by consumers and retailers in order to effectively implement solutions when the
need eventually arises.

According to the book, businesses can implement Blue Ocean Strategy by following five
processes laid out in the strategy as follows:
 Businesses need to choose the correct place to begin innovation and need to establish a
Blue Ocean team for initiative.
 Businesses need to be critically aware of the business environment in their operational
industry.
 Businesses need to identify and assess the hidden constraints present in the market which
can aid the business break away from its competition in the market and provide
innovative solutions to existing problems (Agnihotri, 2016).
 Having identified market constraints, businesses need to reconstruct present market
boundaries and create substitute it with blue ocean opportunities for the business to take
advantage of.
 Finally, businesses need to perform fast market tests of their innovation, select a strategy,
finalise their approach and launch the paradigm shift in the industries.
Diffusion of Innovation (DOI)Theory:
Diffusion of Innovation theory is a very old theory which states that a given product or
idea can gain momentum and spread or diffuse through sections of the population with time.
Because of this, the public or consumers eventually end up adopting the new innovation, idea or
product into their operations. Adoption in DOI theory denotes individuals accomplishing the
same tasks as before, but now through new means of operations. The key to consumers adopting
an innovative idea or product is that consumers must first recognise the idea or product to be
innovative or new, if this happens, then diffusion of idea or product can take place amongst
consumers of an industry (Zanello and et.al., 2016). According to DOI, the process through
which adoption of new and innovative ideas or products by consumers takes place, can be
divided into five adopter categories, which is also known as innovation adoption life cycle:
 Innovators (2.5%): Consumers who are amongst the first to adopt a new innovative idea
or product into their operations. These are high risk takers looking to reap even bigger
rewards through the idea or product. They start the diffusion process.

 Early Adopters (13.5%): Consumers who are aware of the need to change and embrace
new ideas and products into their operations. These are organisational leaders, who take
moderate risks but are more cautious in their operational approach than innovators. Early Majority (34%): These consumers are not leaders, but are amongst the ones to
adopt innovative ideas and products earlier than the majority of consumers in the industry
(Currie and Spyridonidis, 2019). These don’t take risks and wait for other to prove the
effectiveness and efficiency of the new idea or product. Late Majority (34%): Consumers who are sceptical of the new idea or product and wait
even for majority to adopt the innovation before adopting it themselves. Immensely
cautious in nature. Laggards (16%): Consumers who are last to adopt innovation in a market. These have an
aversion to change irrespective of the advantages innovation provides.
Based on DOI, businesses need to market to market innovation to these segments based
on their individual characteristics for effective adoption of innovation. The adoption of new
innovative ideas and products is also dependent on how much better it is compared to the
previous solutions, how compatible it is with consumers, how easy to operate it is, how
effectively can it be tested in consumer markets and the tangible benefits it provides to
consumers (Benhabib, Perla and Tonetti, 2017).
Application of Blue Ocean Strategy in Made.com’s Previous Operations
Made.com is a designer and retailer of furniture and homeware products. Operating in the
retail markets for over 10 years successfully, it has grown and expanded its operations to
franchises in Italy, France and Philippines. As they both design and manufacture their own
products this allows them to provide customizable homewares and furniture’s which fit the exact
needs and demands of their customers. This strategy of allowing customers to customize their
furniture to their needs has been a major factor in helping them differentiate their products form
amongst their competitors in the consumer markets and has helped them gain a competitive edge
against their rivals in the retail furniture industries.
Made.com’s administration has implemented the principles and processes of Blue Ocean
innovation Strategy in their operations and functions in order to increase their operational

performance, efficiency, productivity and profitability in the consumer markets and to garner a
competitive edge against its rivals in the furniture industries (Mebert and Lowe, 2017). This has
allowed it to effectively increase its total market share and customer base by providing customers
with unique innovative products that are not available for consumers to purchase from anywhere
else in the markets. To effectively implement the Blue Ocean Strategy of innovation into their
operations, Made.com’s administration’s first move was to identify and assess which of their
products and operational processes should be innovated, which would help the business
organisation move from the current red oceans of the retail furniture markets to uncharted blue
oceans of limitless possibilities and opportunities and created a dedicated blue ocean team within
its organisation whose sole purpose was to aid Made.com effectively and efficiently implement
Blue Ocean strategy of innovation into the business’s products and operations.
The next step that Made.com’s administration along with the blue ocean team in the
organisation had to take was to thoroughly evaluate and analyse the business environment of the
retail furniture markets in which Made.com and their competitors operate in, in order to develop
a strategy which can help them assess just how similar their products are to their competitor’s
offered products to the consumers and how they can better differentiate their own products.
Then the blue ocean team in collaboration with Made.com administration’s next task was
to identify all the hidden constraints or pain points that exist in the furniture markets (Dvorak and
Razova, 2018). Doing this effectively provided Made.com with crucial information about which
of the consumer’s current and future needs and requirements are currently unsatisfied by any
product available in the furniture markets and allowed them to develop a strategy which would
satisfy these present and future consumer needs in order to allow the organisation to move
towards blue oceans of uncharted possibilities and opportunities from the red oceans it currently
operated in.
Performing through market research, Made.com was able to identify that currently there
are no present furniture retailers that provide products that are specifically designed as per the
needs and requirements of individual customers they service and the huge potential opportunities
customizable furniture can present to grow and expand Made.com’s operations, productivity and
profitability. Having assessed the constraint points, Made.com’s next strategy was to
interconnect furniture designers to their customers through their online website which would

allow their consumers to effectively customize the furniture products as per their requirements,
needs and preferences which can be manufactured by Made.com to meet to exact demands and
needs of the consumers which are currently unsatisfied in the present furniture markets. This
strategy allowed Made.com to sufficiently differentiate their operations and products from
amongst their competitors and allowed Made.com to move into blue oceans of productivity (Kim
and Mauborgne, 2017). Through this strategy, Made.com was able to gain a significant
competitive advantage against its competitors which allowed it to immensely increase the
number of customers it services which directly increased their productivity and profitability in
the consumer markets and also safeguards Made.com’s operations for the future as the demand
for customer’s to purchase furniture that is specifically made to satisfy their individual needs and
requirements is never going to vanish.
Application of Diffusion of Innovation Theory to Made.com Future
Operations
Made. Com can use diffusion innovation theory for development and growth of products
and services and company profit margin and sales. Company by using such theory is able to
know the way idea or innovation will gain momentum and firm will able to gain competitive
advantages. Made.com by using such theory is able to influence and motivate people to adapt to
new innovation of products and services of company (Lyu and et.al., 2017). Made.com make
innovation and uses updated technologies to provide quick and effective services to customers
and enhances its market share. Made. Com firstly target customers that are interest to use
innovative and creative products and services in order to satisfy their needs. As it is stated that
different people have different needs and requirement so company need to classified and
segment people on basis of their needs in order to plan effectively strategies to gain competitive
advantages. Their main focus is to continuously get innovative and creative products to meet
their requirements (Weil, 2018). Made. Com always tries to select and target high class people
for innovative and creative products as they need and preferences changes continuously. Made.
Com by making continuous innovation and using updated technology is able to charge
competitive pricing from customer as it meets unsatisfied needs and wants of people. Innovation
helps in growth and success of company by attracting people that are highly concerned about
quality of products rather than price paid to them. Thus, diffusion theory used by firm helps in

meeting needs of those people who are willing to take risk and take first mover advantages to use
such products and services (Fagnani and Zino, 2017).
Diffusion theory enables company managers and leaders to analyse the rate of acceptance
of new products and services among customers which enables in stabilizing various strategies
which will help in establishing long term positive impact upon profitability factors. This theory
will enable Made.com company to bring high scale innovation and success factors in all furniture
items and customized home décor materials for delivering high standards of living within people.
The various elements through which future development pathway plans can be formulated for
bringing out creativity and innovation with internal management structure are as follows (Gomes
and Osman, 2019).
Knowledge: Made.com at this step of diffusion theory will search out all innovative tools and
procedures for reaching high scale preferences among new segments of customers around the
world. This step will guide top management and authorities to bring high functionality in
designs, furniture structure and innovative customization. Company can formulate budgets and
resource allocation funds which will help in gaining high optimistic growth market share, bring
synergy of productivity and motivate employees in all departments to function out well. Various
innovative ideas and themes can be discussed with leaders and team members through
brainstorming sessions, group discussions which will promote synergy of growth and enhance
the cycle of productivity. Made.com by vitally bringing innovative steps and strategies to
leverage high goodwill among customers and diversify into international markets (Khan and
Khan,2019).
Persuasion: Made.com at this step of diffusion theory will focus on channels through which
innovation and various methods can be implemented by top management in company. Channel
of distribution will pool out the paths through which company can engage new segments within
customers about various resources and methods through which they can establish strong
parameters of management chains. Diffusion theory enables company to practically get their
vision coordinated within the relative distribution cycles and chains, where they can expand
business sectors into various arenas. Persuasion will help leaders in company to inspire
employees and team mates working in various departments for using the innovation cycle and
bring high quality standards within company market share (Kim, Lee and Contractor, 2019).

Decision: At this step of diffusion theory company structure will decide the final steps and
methods through which final integration of innovation and creativity will be formulated in
structure. This step will decide how employees will be working in company and the various
business models of leadership through which final implementation will help in gaining strong
positioning in market share. Made.com will formulate decisions based on various parameters
which will help in strong implementation of the strategies and connect employees within internal
structure (Mayowski, Rubio and Norman, 2019).
Implementation: At this step final implementation of the innovative ideas and business strategies
will take place by the top management through which they can gain high efficiency and large
involvement within teams. Implementation with high standards of parameters will enable
company to firmly lock the resources and check on their optimum usage within various
departments to reach among customers in market share. Diffusion theory will rationalize the
various steps at the procedures to minimize any negative impact of resource utilization and also
make sure that there is large spread of innovation among all employees. Implementation can be
overviewed by leaders and managers at Made.com where high inclination given to relative
connectivity within employees and trainings to gain high optimistic outlook towards innovation
will help people in achieving various production standards targets (Min and Jeong, 2019).
Confirmation: At this step confirmation of all procedures and methods which have been applied
throughout the theory of innovation will be confirmed, feedbacks of customer’s acceptance and
their preferences will enable company to get high leverage profits. Confirmation step will enable
Made.com to be productively active in bringing all resources in best usage at company structure
which will help not only in gaining internal strength, but also competitive value among externals.
This step will analyse various trends and preferences along with demands of customers varying
with the time periods and also seize the changing market situations , through which further
progressive decisions can be taken for recording data and further analysis (Pantano and
Vannucci, 2019).Made.com by the effective usage of these factors gain strong parameters and
leverage high profitability revenues through which they will get high insights on consumers
demand growth on various factors. Customization of furniture and other home décor products
can be enhanced with high scale margins and determine future progressive steps to lubricate the
whole functionality of innovation in company (Zhang and Feng, 2019).

CONCLUSION
From this report, it can be concluded that innovation is integral to the growth and development
of any business organisation. This report evaluates the various innovation theories business
organisations such as Made.com can make use of in order to improve their innovation operations
and effectiveness. Then the report applies a business innovation theory to the operations of
Made.com in order to assess how it has historically developed and innovated its goods and
products in order to achieve increased performance, efficiency and productivity in the consumer
markets. Finally, the report applies innovation theory with the intention to recommend
development pathways for Made.com through which it can develop and innovate its future goods
and services.

REFERENCES
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