Marketing Strategy and Competitive Positioning pdf ebook

partnerships demonstrating how open innovation can power growth:
● 
Nike
+ – Nike worked with Apple to develop a sensor that can transmit data from the 
heel of its running shoes to the wearer’s iPod or iPhone, launched in 2006.
● 
Little Swimmers Sun Care – Kimberly-Clark created adhesive plasters for children that 
use ultraviolet sensitive material to warn parents of the risk of sunburn, developed and 
marketed in partnership with Sunhealth Solutions in the USA and launched in 2007.

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INNOVATION STRATEGY
● 
Aquafresh White Trays – GlaxoSmithKlein’s Consumer Healthcare’s entry into the 
tooth whitening strip market in 2007 came through a partnership with Oratech, a pri-
vate manufacturer supplying dental products (Birchall, 2010).
Further insight into new forms of collaboration and open source innovation comes from 
Don Tapscott’s Wikinomics (Tapscott and Williams, 2007). A ‘wiki’ is a piece of software 
that allows thousands of people to edit the same website. Tapscott’s view is that if people 
from all over the world can get together to create an encyclopaedia – Wikipedia – there 
are no limits to what they can create. Wikinomics brings people together on the Web to 
create a giant new brain. Companies are exploiting this in the form of ‘crowd-sourcing’. 
When Procter & Gamble needed a new chemical to remove red wine stains from clothing, 
instead of turning to their own R&D department, they created a website called InnoCen-
tive, where anyone could come up with a solution and be paid. The logic is that 1.5 million 
people on the Web are more likely to come up with the solution than 9,000 chemists in 
the company.
Many companies have realised that going ‘open source’ or collaborating and sharing 
ideas means many innovations can be created and developed outside the company. At 
Procter & Gamble, in a massive turnaround of a business that had stalled, under A.G. 
Lafley the company abandoned its reliance on in-house R&D. The classic corporate drive 
to research and develop was replaced by a ‘connect and develop’ strategy of working 
with outside partners. By 2007, 35 per cent of P&G’s new products came from outside 
the company. Under Mr Lafley, P&G’s performance saw a step-change improvement, 
and rival Unilever was left behind. This is an ‘era of open innovation’ (Ancona and Bres-
man, 2007).
Indeed, for many major organisations, reduced spending on traditional R&D activities 
has encouraged a broad global search for new ideas from any source. Companies such as 
Intel are locating satellite research facilities close to leading research universities to tap 
into academic expertise. In some cases, the breakthrough ideas come from research-based 
collaboration. For example, Xerox has broken with tradition to look to outsiders to help 
develop optical-network technology. One result is the inclusion of Xerox’s imaging technol-
ogy expertise in a joint project with Intel, to produce a new microprocessor tailored to docu-
ment imaging. In complex and rapidly changing markets, many companies are exploring 
new and faster ways to capture new ideas from diverse sources as the basis for developing 
new products and services (Greene et al., 2003).
Worldwide innovation networks are increasingly central to maintaining and enhancing 
competitiveness. This may involve a worldwide research and development organisation. 
Microsoft is tapping into a new talent pool with its advanced technology centre outside 
Beijing. IBM has major labs in China, Israel, Switzerland, Japan and India. For smaller 
companies, global innovation networks involve loose structures of in-house engineers, con-
tract designers and manufacturers, university scientists and technology suppliers brought 
together around a single project. At a time when technology crosses borders faster than 
ever – because of the Internet, cheap telecoms and advances in interactive design software – 
the location of R&D matters less than who controls the networks (Engardio, 2004).
12.1.11 Globalisation and innovation
The examples given emphasise the global perspective needed to understand how innovation 
is changing.
For example, Indian company Mahindra & Mahindra opted to design and manufacture 
one of its motor scooters in the United States, turning conventional wisdom on its head. The 
company aimed for an ‘all American product’ generated by its ‘global new-product manu-
facturing set-up’. In 2017 it announced it was doubling its $1 billion investment, encouraged 
by the potential of electric scooters. Emerging-market companies are rapidly evolving their 
traditional business models (Mallett and Crabtree, 2015).

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