Innovation dimensions and business models
Shawney et al. (2011) introduced a tool that can be used to look for opportunities to innovate. The ‘innovation radar’ has 12 key dimensions, namely: offerings, platform, solutions, customers, customer experience, values capture, processes, organization, supply chain, presence, networking and brand. Next, this paper will apply some of these key dimensions to an innovative firm. The innovative firm I would like to discuss is Ikea
Ikea has been able to provide customers with a wide portfolio of good quality furniture for relatively low prices by making use of co-creation. To be more specific, Ikea incorporated customers in their production process, outsourcing the furniture’s assembly process to the customer, a form of co-production. This higher valued product offering has in turn, increased Ikea’s sales and lowered its labor costs.
Offerings: wide array of furniture, appliances and home accessories in one store for a relatively low price.
Platform: many products are designed for a portfolio of screws, knots, etc. Moreover, many parts are designed for multiple products.
Customers: by focusing on low price and a wide portfolio of products Ikea has created and captured a new customer segment.
Customer experience: every Ikea location has a relatively cheap restaurant and daycare facilities. Attempting to enhance the customers shopping experience.
Processes/Supply chain: the production process is outsourced to the customer (higher efficiency, lower costs).
There is ample research that suggests that there is a positive correlation between innovation and organizational performance. This, however, does not imply that every company should simply innovate to enhance profit. There are many challenges associated with innovation. Moreover, the occurrence of innovation is no longer merely defined by the existence or inexistence of an internal research and development department. Next, I will briefly discuss three management issues with regard to innovation
Ikea has been able to provide customers with a wide portfolio of good quality furniture for relatively low prices by making use of co-creation. To be more specific, Ikea incorporated customers in their production process, outsourcing the furniture’s assembly process to the customer, a form of co-production. This higher valued product offering has in turn, increased Ikea’s sales and lowered its labor costs.
Offerings: wide array of furniture, appliances and home accessories in one store for a relatively low price.
Platform: many products are designed for a portfolio of screws, knots, etc. Moreover, many parts are designed for multiple products.
Customers: by focusing on low price and a wide portfolio of products Ikea has created and captured a new customer segment.
Customer experience: every Ikea location has a relatively cheap restaurant and daycare facilities. Attempting to enhance the customers shopping experience.
Processes/Supply chain: the production process is outsourced to the customer (higher efficiency, lower costs).
There is ample research that suggests that there is a positive correlation between innovation and organizational performance. This, however, does not imply that every company should simply innovate to enhance profit. There are many challenges associated with innovation. Moreover, the occurrence of innovation is no longer merely defined by the existence or inexistence of an internal research and development department. Next, I will briefly discuss three management issues with regard to innovation