Netbooks: Cloud computing goes personal

The idea that a computing device will depend on the internet for computing power is not new. So called thin clients - terminals which depend on networks for access to applications - have been around for years. Netboooks are small portable computing devices with screens ranging from 5 to 10 inches, costing anywhere between $200-500, that depend on the internet for many computing tasks. The netbook has been championed by Intel, which created a line of microprocessors, called Atom, to control them. Research firm IDC estimates that 10.8 million netbooks will ship in 2008, just about a year after Asus launched what is considered the first device in this category - the Eee PC. Asus has a 46% share of the netbook market according to IDC.
Analysts and and experts agree that netbooks will be disruptive to the PC industry, but it's not clear in what way. Will netbooks poach sales of laptops? Are netbooks replacements for smartphones? Will netbooks increase the popularity of cloud computing? Technology vendors such as Intel and Dell expect netbooks to fit in between smartphones and laptops. In their view, netbooks will become primary computing devices in emerging markets and complements to traditional PCs in developed markets. Point is, if netbooks rely on the Internet too much, they won't replace the laptop. If they are too clunky, they won't replace the phone. And on the other hand, netbooks may actually compete with both. It's also possible that the netbook will converge with both the smartphone and laptop markets - High end smartphones get better and better and are moving up the chain in terms of features and performance. Laptops are getting smaller and lighter. Netbooks could get squeezed in between the two.
However, the technology could be disruptive on many fronts. There is currently a market segment that values extra portability. That segment is making do with a laptop and a smartphone. A device that offers greater portability could cannibalize both laptops and smartphones.
The success of netbooks may ultimately rely on always-on Internet connections. Since these small PCs lack significant storage, they largely depend on the Internet to access content and documents. Once Internet connectivity gets to the point where it's everywhere, these devices become more viable.
While netbooks might be showing popularity, there are many uncertainties. The first worry is the economy. They are definitely a discretionary purchase at a time when the global economy is struggling. Another question is whether notebooks are really suited for emerging markets. In the US, netbooks can find Internet connectivity through multiple means, but the emerging markets are different. Ubiquitous Internet access may be a more fundamental concern than the availability of cloud-based software programs.

Innovation Economics: How smart ideas can turn into jobs and growth

Over the past years, while the US economy has been transformed by techonology and entrepreneurship, the doctrines guiding economic policymakers have not kept pace and continue to be informed by 20th century models and theories. Without an economic theory that matches the new age, it will be harder for policymakers to take the steps that will most effectively foster growth.

Within the last decade, a new theory of economic growth grounded in Innovation has emerged. This is known by a range of terms: "new institutional economics", "new growth economics", "evolutionary economics", "neo-Schumpertarian economics", or just plain "Innovation economics". This new economics reformulates the traditional economic growth model so that knowledge, technology, entrepreneurship, and innovation and are now positioned at the center, rather than seen as forces that operate independently.

But up to now, innovation economics, and innovation policy, has not fully been appreciated by policymakers, in large part because the dominant economic policy models advocated by most economic advisors and implicitly held by most policymakers largely ignore innovation and technology-led growth, in favor of macroeconomic issues, such as tax cuts on individuals, budget surpluses, or social spending, which at the end of the day pale in significance to innovation in driving economic growth. In contrast, “innovation economics” recognizes the reality that a global, knowledge-based economy requires a new approach to national economic policy based less on capital accumulation, budget surpluses, or social spending and more on smart support for the building blocks of private sector growth and innovation.

Rather than focus principally on markets assumed to be in equilibrium and individuals assumed to be acting rationally in response to price signals along supply and demand curves, innovation economics recognizes that innovation and productivity growth take place in the context of institutions. In this sense it is based on the notion that it is only through actions taken by workers, companies, entrepreneurs, research institutions, and governments that an economy’s productive and innovative power is enhanced. As a result, when examining how the economy creates wealth, innovation economics is focused on a different set of questions:

• Are entrepreneurs taking risks to start new ventures?
• Are companies investing in technological breakthroughs and is government supporting the technology base (e.g., funding research and the training of scientists and engineers)?
• Are regional clusters of firms and supporting institutions fostering innovation?
• Are research institutions transferring knowledge to companies?
• Are workers getting skilled and are companies organizing production in ways that utilize those skills?
• Are policymakers avoiding erecting protections for companies against more innovative competitors?
• And perhaps most importantly, are policies supporting the ubiquitous adoption of advanced information technologies and the broader digital transformation of society and the economy?

The new field of innovation economics addresses this gap between spending and results. Economists are increasingly studying what drives successful innovation to learn how companies can get more bang from the bucks spent on R&D and higher education.

David Vs. Goliath

It is a well known fact now: Smaller, more nimble companies are changing the face of Innovation and giving larger incumbent companies' nightmares. These small maverick companies' are always out to produce that industry changing product or service that would make larger companies' obsolete. There are three strategies that smaller midsize companies' use, from which larger companies' can learn:

1) The practice of constant experimentation is as fundamental to research as it is to innovation. When a company is small, it benefits from a quick cycle of experimentation and learning. For big companies', the budgets, culture, and shareholders all stand in the way of following this pattern. Small and smart companies understand the value of trial and error. Large companies fear failure and panic if they don't see results at the end of an experiment. Large companies' must demand small, controlled launches that allow your teams to learn, build courage, and taste success.

2) Mature industries are characterized by inertia, habit, tradition, complacency, and "expertise," people who know the best way something should be done (i.e. it's the way they have always done it.) This produces amazing opportunities for upstart companies to beat established companies with their innovation. The solution is to slash bureaucracy, fire the people who are hindering progress, and beef up innovation efforts. The less obvious solution would be to create a new company, thinking like an entrepreneur.

3) C level support is extremely vital for innovation activities. Unlike giant companies, midsize and small companies benefit from the involvement of the CEO. When the CEO sponsors an idea, one can bet it is approved in record time.Most large company CEOs talk about innovation but are not really involved in day to day activities. However, the CEO has to be involved. Without this support, the odds of nothing happening increase dramatically.

Pushing the pedal on Innovation

In today's competitive environment it becomes increasingly important to accelerate innovation, more specifically accelerating the time between origination and full realization of an idea. No matter the competitive dynamic, it is almost always helpful to get new products or services into market settings as quickly as possible, in order to enable rapid in-market learning and business model development. In their new book, From Strategy to Execution: Turning Accelerated Global Change into Opportunity, Mark Johnson and Josh Suskewicz review new ways to accelerate innovation as well as institutionalize the processes and tools that make rapid and consistent new product development an engrained capability. Here, I summarize one type of acceleration - speeding up the launch time for products in disruptive market situations.

1) Team set-up: Putting together a heavyweight team is one of the most important aspects of developing a disruptive product or service offering. The team should have decision-making power, and should break down and reconstruct processes so that they match the project's needs. The team should be led by an authorized project champion with enough power within the company to get things done. Team members should be together to avoid communications complexities and should be freed from other responsibilities so they can focus on one project at a time. Successful companies are set up to perform in a certain way: To execute their business model. To that end they are methodical and incredibly skilled; our research has made it clear that incumbents will almost always win battles of sustaining innovation. In order to avoid this dilemma, teams focused on new disruptive development should be kept at arm's length from the standard processes that drive the core business. This requires a senior-management mandate, corporate autonomy and customized processes and allocations.
Also, teams must be staffed with people who have the right set of skills to thrive in such an environment. The most effective employees in any given situation are most likely to be the ones who have wrestled with and learned from and succeeded in similar situations in the past.

2) Funding: The project would need to be funded with just enough resources - enough to be able to make progress and test key assumptions, and only enough so teams are under pressure to develop a viable business model quickly. When doling out money in a stage wise process, companies must make sure to use the appropriate benchmarks to review progress. The product development funnel that works for a core business may well suffocate ideas that fall beyond the incumbent business model. Core valuation tools such as "net present value" and "return on investment" work very well when evaluating existing markets and knowable, highly sustaining development efforts. However, markets that don't exist can't be measured. Instead, companies should focus on progress-tracking metrics such as knowledge-to-assumption ratios, which are reflective of the development of the business idea, as well as both directional and actionable.

A summary of some of the most crucial aspects of a successful disruptive product launch would include:
1) Senior management commitment.
2) Strict deadlines that would galvanize the team and pave the way for rapid action.
3) Team autonomy where the team is completely distinct from the core company.
4) Innovative team culture
5) Selective team talent

Innovation Environment Challenges in Organizations

I recently came across some interesting thoughts on challenges to a successful Innovation environment in organizations. Among the various challenges to a healthy Innovation environment in organizations, Indifference, Hostility, and Isolation contribute to a majority.
Indifference
The majority of executives make it to top positions by being very good operational managers - meeting sales objectives, improving products and services to keep up with competitors, supporting existing customers and acquiring new ones, managing mergers and acquisitions, achieving the required financial results quarter after quarter, etc. These management jobs are very tough and getting tougher, given our rapidly changing, fiercely competitive, global business environment. Being a good manager takes very hard work, attention to detail, and organizational discipline.
When the going is good, a company might be able to cruise along with top managers who are indifferent leaders. Such managers are typically executing tactical, incremental strategies where the critical ingredients are good, disciplined management as well as operational excellence. But once the skies begin to darken, as they inevitably do, such managers will get into deep trouble, and often end up taking a business down with them. Their most talented innovators and strategists, those whose skills are now badly needed to help set the business on the proper course, have either long departed or become so disenchanted that they have nothing left to give.
Hostility
In general, managers who do not actively encourage new ideas and innovations in their organizations do so because of indifference. But some managers go beyond indifference. Their initial reaction to any new idea is negative, if not downright hostile.Typically, the corporate bullies, as one could call them, achieved their high management positions because despite their poor interpersonal skills, they might be good at other parts of the job. Sometimes, they are excellent innovators themselves, but given their autocratic tendencies, innovation for them is a one-man or one-woman show. They tend to be poor team players - Collaborative innovation is not for them. Such hostile behavior is hugely detrimental to a healthy innovation environment. People championing new ideas, especially if they are potentially disruptive new ideas, are going against the grain of what the business is currently doing.Senior managers can nurture those new ideas through positive words and actions, or they can stop them on their tracks by being overly negative and combative.
Isolation
Innovation is multidisciplinary and technologically complex. It arises from the intersections of different fields or spheres of activity.But perhaps even more important, a collaborative approach to innovation helps provide the energy and emotional support that new ideas need in their very early stages. New ideas are almost always rough and ill-formed at first. Nothing works better than bouncing ideas off other, supportive people. This back-and-forth dialog is crucial in helping to shape the idea into something more concrete, understandable, and actionable. Then it is more ready to face the tougher challenges and criticisms from line management and others in the organization. That is why isolating people in organizational silos is one of the biggest obstacles to innovation. Companies that are serious about innovation do everything possible to break down silos and encourage communication and collaboration across the organization and beyond.

Beijing Olympics 2008 - Showcasing Innovation

Every four years, the Olympics brings together the world's top athletes to complete for the ultimate glory. The event provides an interesting opportunity for various companies to showcase their innovativeness to a huge audience. Companies from a host of industries—architecture, technology, food production, and more have benefited over the years from working with athletes or local Olympic organizing committees to develop fresh ideas. This year the destination is Beijing, where a number of companies are displaying extremely innovative products and services in the hope to get a new growth curve going. A glance at some these is called for.

1) GE is providing a compact ultrasound machince, the LOGIQ i that produces detailed images of even the tiniest tears in a ligament, as sharp as those from the professional machines in hospitals. It's part of GE's strategy of using the Olympics to show off its latest innovations. GE deployed an earlier version of the LOGIQ i at the 2006 Winter Games in Turin, giving researchers a chance to test-drive the equipment in a high-profile environment where extreme injuries often occur. Feedback from athletes and trainers, meanwhile, helped improve the machine. And just as important for GE, sales of its ultrasound equipment used for sports medicine have jumped 75% since Turin.

2) Kobe Bryant and LeBron James will sport Nike's Hyperdunk basketball shoes, which feature a webbing of liquid-crystal fibers that are five times stronger than steel.

3) In Beijing, Omega has introduced motion sensors (to spot false starts) and global positioning satellite systems (to track rowers).

4) French-Chinese tech company ASK-TongFang has developed radio-frequency-identification chips for the Games. The Beijing organizing committee wanted to eliminate counterfeiting of tickets, so it hired ASK-TongFang to make tickets with tiny computer chips that can hold various bits of information. For most events, these contain only fairly basic data such as the seat number, but for the opening and closing ceremonies each ticket will have the bearer's name, passport or ID card number, and other details.

5) The main stadium, by Swiss architects Herzog & de Meuron, features an unorthodox steel structure that makes it look like a giant bird's nest. That spurred Chinese construction companies to learn hyper-precise welding techniques they had never attempted before.

6) The National Aquatics Center, nicknamed the Water Cube, is clad in a shimmering blue plastic coating that looks like bubbles. It traps 90% of the solar energy that hits the structure to keep the building warm, so the facility uses less energy to heat its five pools.

7) At the basketball stadium, an aluminum alloy skin reflects most of the sun's rays, so the gym's cooling system will use less than half the energy of a more conventional structure.

8) PowerBar, a Nestle subsidiary that makes vitamin-enhanced energy foods for athletes, has come up with a new, user-friendly package for an energy liquid that Nestle says can boost cyclists' speeds. These are used by bikers who want a quick blast of carbohydrates when their legs start to give out. But squeezing the sticky liquids out of foil pouches was messy. So Nestle researchers in Switzerland came up with the idea of bite-size gel casings that make it easier for athletes to handle the goop even while running or riding a bike.

Measuring Innovation - NESTA's Innovation Index

As companies pursue their innovation agendas, the need to measure the state and level of innovation within the firm becomes an important requirement. The National Endowment for Science, Technology and the Arts (NESTA), an indepedent British organization, is working on a new index to assess the state of innovation within specific industries. Since the 1970s, Britain's economy has made a dramatic shift from manufacturing to services, ranging from banking and finance to advertising and film production. But to date there's been no way to take stock of how innovative the companies and the industries actually are. Traditional methods of measuring innovation, such as the level of investment in research and development, don't provide the entire story.

NESTA aims to create an industry specific index that would seek to provide the real level of innovation within an industry or a firm. The index, due for release in 2010, would measure the impact of innovation on all kinds of businesses within many sectors and make the findings available to the public, business leaders, and government policymakers. With greater insight into the main players and structure of the economy, these figures could use it as the basis for decisions that in turn might accelerate innovation in the private and public sectors. The Innovation Index is likely to look at a range of factors, such as organizational change, investment in management and skills training, and competitive performance over time, as well as include a peer review in which company executives both help to define the innovation indicators and rate each other.

India Innovation Summit - 2008

I had the opportunity to attend the 4th India Innovation Summit in Bangalore from 20-21 June, 2008 and must say that I was thoroughly impressed with the spectrum of innovation taking place in India. Events of this sort really open your eyes to the kind of creativity prevalent in our culture and at the grassroot level. The theme for the event was "Innovation in the 21st century". To capitalize on the emerging opportunities and address the challenges, organisations and governments need to leverage emerging technologies and collaborate with stakeholder communities across geographies to co-create value. Sustainable growth is possible only when innovations are integrated with ethical business practices and care for the environment. The conference presented many case studies on the topic and I could see one common theme emerging from most of the cast studies - Customer co-creation. The key note address was provided by Dr Shekhar Mitra, Global R&D Vice President of Beauty Care, Procter & Gamble, and he shared some of his personal experiences on customer driven innovation at the firm. According to him, the key principles that drive innovation at the firm are:

• Innovation requires a new global view of scale
• Innovation occurs at the confluence of ideas
• Social responsibility sparks innovation

In an attempt to deliver meaningful and credible innovation to the consumer, the firm relies heavily on stakeholder collaboration at various stages of the consumer lifecycle. And all this is driven by a deep market insight which aids in mapping technology to needs.

I'd like to quickly highlight fascinating innovations that caught my eye.

1) Services Innovation: United Film Organizers - This was arguably one of the best presentations of the day and Rajesh Mishra, CEO for Indian operations of UFO Moviez took the audience through an entirely different experience of movie making and his innovation around it- Digital Cinema. This Disruptive Innovation is a brilliant move which cuts cost (by a factor of ten), kills piracy and increases reach by digitizing and encrypting the movie content and delivering it via satellite straight to the movie theatres. With over 11,000 theaters all over the country, UFO has been able to create one of the best movie experiences for masses, challenging a 100 year old analog technology.

2) Eco-Wise Waste Management - Manik Thapar started this company as a result of a project study he undertook while studying in the US. At that time, there was no single company involved in end-to-end waste management and the space provided a huge opporunity. Eco-Wise gets into the zone of collection; transportation; segregation; treatment; and disposal of organic and inorganic waste, creating India’s first private waste segregation and treatment facility.

3) Indore City Transport Service Ltd (ICTSL) - Vivek Agarwal, Collector of Indore, took up the ambitious challenege of recreating the commuting experience of citizens of the city through a completely integrated Bus service. Some of the features of this service include control rooms, digital signage at bus stops, MIS information for drivers and other controllers, colorized buses for route identification, pass vending machines, trained conductors, and well oiled buses, among others.

The New Age of Innovation - N=1;R=G

Professor's C.K Prahlad and M.S Krishnan of the University of Michigan talk about a new innovation equation in their latest book. So what is N=1, R=G?

N=1 is about "personalized, co-creation of experiences". It is not the same as "mass customization". Mass customization allows the consumer to choose from a menu of products, sub-systems, that he/she has built or has access to. It is the firm's determination of what the consumer might need. Neither is it the same as the "segment of one" concept which targets one customer at a time by learning about their various characteristics such as spending and usage patterns etc. This again is a firm centric view of the customer. Both of these are B2C views. N=1 is a C2B2C view - consumers are joint problem solvers. Experiences for the customer are personalized and are co-created with customers themselves. Examples include - the 6000 Facebook application developers, Ebay participants, and iPod buyers (each buyer creates a unique portfolio of music for his/her self and thus has a personalized experience). iGoogle is another example of co-creation of value and personalization of experience. Google provides the platform. Individual consumers decide how to use it (personalize it) to suit their particular needs.

R=G implies leveraging talent globally. Since no company can hope to satisfy the varied expectations of so many customers, it must diversify how it operates. Firms would need to access resources from a wide variety of other big and small firms - a global ecosystem. In other words, companies' internal focus should be on gaining access to resources, not necessarily owning them.

Interestingly, the concept also applies to the million's of poor in India and other countries. In India, Self help groups (SHGs), which are voluntary organizations consisting of about 12 to 15 women in a village, are able to obtain loans from large banks that are developing microfinancing mechanisms to make such loans possible. The loans are given to the groups, not to individuals. The group then decides, based on discussion among its members, who among them and what projects need to be financed on a priority basis. Because the self-help groups have intimate knowledge of the local circumstances—of individuals (their financial standings, their behaviors,and their character) as well as the community—their decisions are as local as they can get. The groups cocreate their ownexperiences. They also implicitly supervise how the money is being spent. It is no surprise that the repayment rates tend to be extremely high—as high as 99.5 percent.

In their book, the professors explain how to accomplish this shift - one where IT and the management architecture form the corporation's fundamental foundation. Even if a company is dealing with a hundred million consumers, each manager must focus on one consumer experience at a time. The firm can provide the platform around which the customers can cocreate their experiences.
Ultimately, the two ideas must be connected - the resources of many to satisfy the needs of one.

New levels of online collaboration - Book publishing

WEbook.com intends to change the way books are written. It is an online resource for aspiring authors to collaborate and write books online. The site applies an interactive approach to the book publishing process by using the internet as a platform to connect truly brilliant writers to print publication. Think of it as a virtual studio lounge for writers, where literati collaborate on project work, and provide valuable feedback to one another in real time. If the finished piece makes the cut, WEbook funds publication of the best books as printed books, e-books, and other customized downloads. The authors involved share royalties on book sales. Authors can also write the book in private, inviting a small group of friends to log in and provide feedback. The service is emphasizing non-fiction mostly - anthologies, self-help, and essay collections, more than novels where a consistent author's voice matters more. An invitation only version of WEbook went live in 2007 inviting students and graduates from University writing programs to join in writing Pandora, a thriller novel about terrorists and star crossed lovers.

About 700 people are now members of the service, working on 60 projects. The idea is that an "all contributors welcome" approach can bring more creativity and innovation to a book project than an individual or a small group of experts. However, completing a book with a single vision with dozens of authors is definitely a challenge !

Advanced digital ink technology - Digital Book Readers - Online book writing - Do we see a major shift here?

Youtube - The new advertising hotspot

In their quest to connect with the next generation of Toyota Corolla buyers , Toyota has embarked on a strategy to advertise on Youtube. With viewers migrating online and Youtube accounting for roughly a third of all online video watching, the portal is a new advertising hotspot. Toyota has set up 2 channels on the site and has invited creative users/companies to post 2-3 minute comic sketches with some exciting prize money on offer. The aim is to involve the user as part of the branding/advertising activity. The idea is fantastic although the concept must be administered very carefully. In the digital world, with ruthless feedback, companies can either hit the bulls eye or be relegated to an embarassing position through negative word of mouth publicity.

Coming back to the channels, the new Corolla features prominently on the channel's homepage, with links to Toyota's site and other Toyota created video spots that promote the 2009 model. But fact is, when it comes to user created videos, the Toyota Corolla is nowhere to be found. There are videos with guys driving a Honda, and another with some dudes fighting over who will sit on the front seat of their BMW. If the online coversation is about the videos and Toyota is not a part of those videos, then people don't talk about Toyota. Most viewers would simply watch the videos and not visit Toyota's channel home page which actually promotes the car.

However, this form of advertising represents a true shift toward involving the customer as part of creating the experience. Previously, advertisers used to figure out what customers wanted to see. But in the online environment, customers are participants.

Another plus is in terms of market research. Companies spend a lot of time trying to learn how customers relate with their products. Enaging customers in this manner is a lot like holding focus groups - companies might get feedback about their products and just might learn something.

It is clear that advertisers are not moving online as fast as consumers are. The potential gains could be huge. Do we see online advertising disrupting traditional advertising anytime soon? Only time with tell.

Facebook - Innovation Lessons

How many times have you read articles about Facebook being the next Google and so on? Fact is the brouhaha isn't going to stop any soon. Fact is Facebook IS currently a hotbed of innovation and there much that companies can learn and use. The phenomenon that is Facebook, is making huge waves in corporate circles and universities.

• Last Fall, a psychology professor at Stanford asked his students to develop applications for Facebook as part of their class.
• We could soon see many media companies developing Facebook applications to promote new movies or TV serials.
• The power of the Facebook platform is such that innovators could quickly generate market feedback about a newly developed product/service.

Facebook currently has around 66 million users and while many of these are students and graduates, users 35 years old and older account for more than half of Facebook's daily visitors. Companies really need to think beyond commonplace products and service platforms to catch the next innovation wave. Some Facebook lessons to be learnt.

High voltage mosquito drama

I came across the electic mosquito swatter sometime back and realized that this is one brilliant product ! Not sure whether this is a common product elsewhere, but here in Mumbai, they seem like a god send. Looking at getting rid of mosquito's from a jobs-to-be-done perspective, people wish it would be an instantaneous process. You see a mosquito just before you go to bed and wish it just went away/ died/ drowned etc.. People really just want to get rid of the mosquito immediately.

Products available in the marketplace such as Goodnight mats, liquid destroyers, mosquito coils etc do not serve the purpose people are looking for. They are not the most effective, are time consuming, and bank on driving the mosquito away rather than getting rid of it. Mosquito repellant creams are not the most widely appreciated product anyway.

The electric swatter serves this purpose extremely well.

1) The mosquito dies immediately.

2) The process of electrocuting the mosquito with a bat is really engaging and provides a sense of fun.

3) In 5 min you can rid the room of 90% mosquito's and be rest assured.

However, this is more of a home solution and wouldn't suit an outdoor camping trip. Looking at products from a jobs-to-be-done manner, really gives new insight into what consumers are trying to accomplish and what products they would probably use.

Flying for free ? Possible, if you participate in some market research !

In February, Kraft foods and JetBlue airways entered into a pact to allow Kraft to provide free offerings to travelers on a number of routes. Additionally, Kraft would send two employees to

promote the offering and obtain some feedback. In a separate occurrence, Peter Boatwright, a marketing professor at CMU, suggested the possibility of looking at air travelers as a captive audience for market research activities. The thought provides interesting insight into the possibilities. Now consider Kraft paying JetBlue a fee to have exclusive rights to the research activities in which travelers could participate. Might JetBlue give away air travel for free to ensure that it had enough of a captive audience for market research activities? Alex Slawsby of Innosight provides more details in his article - VA
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On Monday, February 4, Kraft Foods and JetBlue Airways Corporation announced that Kraft would provide free bagels and servings of its new Philadelphia 1/3 Less Fat Soft Cream Cheese to travelers on a number of Jet Blue’s routes during the month of February. In addition to free breakfast, Kraft also announced that it would send along two tuxedo-clad employees to distribute the products and also to talk up the promotion. In an article on the promotion, Peter Boatwright, a marketing professor at Carnegie Mellon University, supported the value of a captive set of fliers as an audience for in-flight market research. Boatwright did suggest, however, that if the concept were to lose its novelty due to market research experiments being performed on every flight, fliers would most likely tune out the researchers. In the meantime, however, could Kraft and Jet Blue be on to something?From a ‘jobs to be done’ perspective, this Kraft/JetBlue market research strategy should offer up some value to the researchers, but could be greatly improved. Today, many travelers thinking ahead to a multi-hour journey with limited or no connectivity to the outside world and limited or no ability to move, pack solutions to address jobs such as ‘reduce my boredom’ or ‘make the trip go by more quickly’. From game devices and music players to books and magazines to laptops, these solutions are often out in full force before the door is closed. Be it airplane, train, or bus travel, few individuals choose to sit in silence, staring out the window or contemplating their existence for the duration of the journey.
Leisure travelers visiting family or going on vacation are often extremely price sensitive. Before preparing solutions to address their ‘jobs to be done’ en route, leisure travelers often conduct extensive research to identify the mode of transportation that will satisfy their trip duration and cost objectives. In most cases, cost is the paramount concern – consider the legions of folks who travel through the Boston, New York, Washington D.C. corridor via bus service, enduring traffic jams and multi-hour journeys to avoid the air travel premium. Now consider the intersection of market research and the captive traveling audience, especially those folks highly sensitive to price. Research has proven time and time again that input from customers and noncustomers is essential to product development and positioning. As is the case, product and service companies often pay thousands of dollars to convene focus groups against which to test their offerings. It seems reasonable to assume that product or service companies would find the travelers occupying the 49 seats on a Greyhound Bus or the 150 seats or 100 seats on JetBlue’s Airbus A320 or Embraer ERJ-190 aircraft to be valuable market research participants. Might the Kraft/JetBlue partnership be headed in this direction?But back to leisure traveler desire to ‘minimize the cost of travel’ – the Kraft/JetBlue partnership assumes that flyers will be willing to taste Kraft’s product and offer their feedback to the representatives free of charge. What might happen if the market research process were automated through a slightly upgraded version of the back seat entertainment systems on JetBlue aircraft and if flyers could make money from participating? Imagine settling into your seat with an option to take part in several market research activities during the course of your flight. After inputting basic personal information into the system, you could agree to watch short advertisements or product promotions before answering simple yes/no or ‘rank your response between 1 and 5’ questions.
It seems likely that few flyers would participate in such activities for free, but given how much money companies spend on focus groups, might sponsoring companies be willing to reduce flyer airfare by $5 or $10 for each activity completed? Perhaps the number of activities or maximum reduction would be capped, but what if a large number of activities were available – could flyers reduce their airfare cost to zero or even make money? Might flyers be willing to select between different durations of activities with fare reductions consummate with length or complexity? Might flyers receive greater fare reductions if they are willing to share greater amounts of personal information? Consider that such a market research scenario could play out in busses and trains in addition to aircraft. If the interface, activities, and benefits are carefully thought out, it seems reasonable that many leisure travelers might choose to spend a significant amount of their journeys ‘working down’ the cost of those journeys and even potentially completing their journey having made a profit or received free product.In June 2006, Clayton Christensen and the Innosight Team authored an Innovators’ Insight analyzing the ‘Southwest Approach’. Many companies suggest that they are following a low-cost, low-price model similar to Southwest, but many also fail to create a model that leads to sustainable profit streams and competitive advantages while delivering on a low price promise. In that Insight, we suggested the notion of indentifying novel revenue streams and proposed a tact similar to the one discussed here – corporations could pay fees for the right to ‘sit next to a passive consumer, or a group of passive consumers.’ Now consider Kraft paying JetBlue a fee to have exclusive rights to the research activities in which travelers could participate. Given the cost of organizing and executing market research, might it actually be more profitable for JetBlue to have travelers in their seats than to have those seats empty? One day, might JetBlue give away air travel for free to ensure that it had enough of a captive audience for market research activities?

McDonald's - Rethinking Strategy

When one thinks of McDonald's, innovation as an adjective rarely comes to mind. However, to plug decreasing sales and in an effort to unlock new growth, the company had undergone a radical shift in strategy last year and came out with spectacular offerings. This has been possible only by realizing various customer need gaps and solutions to solve them. McDonald's attacked Non consumption - a concept common to disruption and blue ocean strategy to figure out new products and services. These are summarized below:

• McDonald's sought to increase sales during parts of the day when its share of total food and snack consumption was low. For example, while McDonald's owns peak meal times in many markets, most people still eat breakfast at home. New products targeting the on-the-go breakfast eater, such as the popular McGriddle product, helped the company grow its share of the breakfast market.
• McDonald's historic focus on serving portions that are fit for a meal (or two meals, critics might argue) presented another opportunity: snacking occasions. To get at these occasions, the company introduced products such as its chicken Snack Wrap. The product carries a low price point and can easily be consumed with one hand. The Snack Wrap has been a huge hit, with sales exceeding the company's projections by 20%.
• Many McDonald's franchises are now open 24 hours a day. To try to draw people at slower hours, McDonald's borrowed a page from Starbucks' playbook, improving the quality of its coffee and making its stores warmer and more accessible, encouraging consumers to linger in the afternoon or early evening.

Amazon Kindle Vs Sony Reader

Which digital book reader will establish itself ? Principles of disruption might give us some insight.

http://www.forbes.com/leadership/claytonchristensen/2008/01/29/disruptometer-amazon-sony-lead-clayton-in_sa_0129claytonchristensen_inl.html

Tata Motors - At the cornerstone of disruption

A very interesting article by Innosight's Josh Suskewicz on Tata Motor's new car - Tata Nano, explains how this could potentialy disrupt other car variants and also motor vehicles - VA

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We here at Innosight have followed the development of Tata Motors’ one-lakh “people's car” with great excitement for the last few years (we’ve written about the development of the car numerous times in Strategy and Innovation and elsewhere, and interviewed the Tata Motors management team a year and a half ago in preparation for a feature presentation at a conference on business model innovation). The car, now dubbed the “nano,” was officially unveiled yesterday to great fanfare.Do we buy into the fanfare? Well, Tata’s peoples’ car matches the pattern of disruptive innovation to a T. It uses an ingenious new business model – the supply chain has been thoroughly reconfigured, to the point where risk is distributed among suppliers and dispersed dealerships will participate in final vehicle assembly – combined with clever and unorthodox product innovations, such as a hollow steering wheel shaft, reimagined body, and plastic panels. Furthermore, Tata Motors engineers made critical tradeoffs, sacrificing many of the performance characteristics that most drivers take for granted – the trunk is in the front of the car and holds just a briefcase, the instrument panel features only a speedometer, odometer, and fuel gauge, there is no radio – in order to deliver a basic but critical value proposition to a new customer set: safe and affordable transportation for the emerging middle class in the developing world that is still priced out of the automotive market. This vision is at the core of the development of the Nano. Since first unveiling the idea and challenging his engineers to realize it, Tata Group Chairman Ratan Tata has been firmly focused on the goal of serving the underserved, of giving the families that crowd onto motorbikes in India’s crowded cities a better, safer, and more comfortable transportation option. He is competing against motorbikes and the non-consumption of cars, rather than any segment in the auto world that already exists. This is brought home in competitors’ reactions, as captured by The New York Times:Jagdish Khattar, a former head of Maruti 800 manufacturer Maruti Udyog Ltd., says it’s too early to say whether the Nano will overtake the original.“It’s a good product but it’s still too early to say whether it will overtake the 800 because it caters to a totally new market segment,” he said while watching a live telecast of Tata’s press conference after unveiling of the Nano.But clearly, at least one other manufacturer was worried.An official of Hyundai Motors, which unveiled an LPG version of its Santro Thursday, was more circumspect.“We definitely see it as impacting our sales,” he said in halting English, preferring to maintain anonymity. Anand Mahindra, managing director for Mahindra & Mahindra, Tata Motors’ primary competitor, said before the unveiling, “I think it’s a moment of history and I’m delighted an Indian company is leading the way.”The impact of the car figures to be enormous, in India and throughout the developing world. But what about its impact on the businesses and society in the developed world? The Times puts forth a compelling theory:Some analysts are predicting that just as the Japanese popularized kanban (just in time) and kaizen (continuous improvement), Indians could export a kind of “Gandhian engineering,” combining irreverence for conventional ways of thinking with a frugality born of scarcity. Or, as Indian auto executive Ashok K. Taneja describes the philosophy, “When I need silver, why am I investing in gold?”Gandhian engineering, or appropriate design, could be a terrific mechanism for forcing product and business model development to cleave to the need profile of a target segment. After all, there is no greater predictor of disruptive success than products and business models that are designed around important and unsatisfied jobs to be done.