2. What is Product Proliferation ?
01
02
03
Product proliferation occurs when organizations market
many variations of the same products.
This can be done through different color combinations,
product sizes and different product uses.
This produces diversity for the firm as it is able to
capture its sizeable portion of the market.
3. Royal Philips, the Netherlands's
most valuable brand has long
been a leader in product
innovation.
Innovations included energy-
efficient light bulbs, medical
scanners, web-enabled
cameras, chipsets for car
entertainment systems &
software offerings.
Business complexity-in supply
chain, sales ,marketing,
product development &
administrative process
increased significantly leading
to much higher expense.
Customers had to enter the
same data twice,
inconsistent experiences
when interacting with
different parts of business.
About Royal Philips
5. In 2011, the company
began building a
“greenfield” platform.
Company also
reduced its product
variety dramatically.
Sold off low
margin
businesses.
EBITA margins
increased & share
price doubled.
6. Fixing the problem
Advances in digital technologies , offer
opportunities to enhance products with
information, personalize customer interactions.
Companies that fail to embrace these
technologies will surely sacrifice
competitiveness.
Follow the principles to recover from downside
of innovation.
7. Focus on integration,
not variety
Eliminate the separation between your innovators
& your complexity handlers
Commit to a vision to direct
innovation
9. The dark side of innovation may not be immediately
reflected in financial performance indicators.
Track difficulties - customers & employees face as a
leading indicator of financial performance.
To gauge the level of complexity in your business, ask
yourself some questions. “Yes” answers signal brewing
problems.
10. • Do employees have to access several systems or use
manual work-around to accomplish a task?
• Do they have to contact multiple people to get their jobs
done?
• Do they have trouble identifying the appropriate in-house
experts when needed?
• Do they frequently have to stop tasks to wait for decisions or
seek approval?
• Do customers have to contact multiple people or call centers
for each product and service?
• Are different log-ins required to access different products
and services online?
• Do customers have to provide the same data multiple times
during interactions or when switching channels?
• Is the customer experience inconsistent from one part of
the enterprise to another?
Employees
Customers
11. Conclusion
The digital economy offers unlimited opportunities for
innovation.
Some companies are innovating in ways that improve
customers’& employees’ lives and offer sustainable business
benefits.
Others are frittering away their resources on innovations that in
the long run do more harm than good to the company.
An honest assessment of your customer and employee
difficulties will indicate which way you’re headed.
