1. Industry Studies: Consumer Goods Industry
Topic: Innovation and Change in the
Consumer Goods Industry
Topic Number:8

2. Overview
Innovation and change play a fundamental role in an organisations
ability to keep pace with a market, drive it forward and get ahead of
the competition. In addition, it is important for firms operating in
the CGI to innovate around process to reduce costs and become
more socially conscious and effective.
In this lecture, we will learn all about how innovation and change is
done in organisations operating in the CGI. We will initially look to
understand what innovation is and the different kinds of innovation
that firms can adopt. We will also look at emerging forms of
innovation from emerging markets.
Thereafter, we will look at some of the challenges to making
innovation and change happen in organisations and how we can
overcome these. Finally, we will look at a number of different
approaches to change management organisations can use.
2

3. Learning Outcomes
3
• Determine and describe what innovation is in an
organisation
• Articulate the different models of innovation used
in the East and West
• Be able to discuss the challenges faced in
implementing innovation and change
• Critically evaluate a number of change models to
determine the optimal way to create change in
organisations

4. Innovation
Most of us understand that
innovation is enormously
important. It’s the only
insurance against irrelevance.
It’s the only guarantee of
long-term customer loyalty.
It’s the only strategy for out-performing
a dismal economy.
Gary Hamel
Learning and innovation go
hand in hand. The arrogance
of success is to think that
what you did yesterday will
be sufficient for tomorrow.
William Pollard

5. What is innovation?

6. What is innovation?
Innovation can be defined
as the application of new
ideas to the products,
processes, or other
aspects of the activities of
a firm that lead to
increased “value.”
This “value” is defined in a
broad way to include
higher value added for the
firm and also benefits to
consumers or other firms.

7. Characteristics of innovation
A key issue here is to distinguish innovation, the bringing
to market of a truly novel item, from imitation, the
adoption of a new technique or design that is already in
the market.
New to a
firm
New to a
domestic
market
New to a
world
market

8. Two types of innovation
Product Innovation Process Innovation
The introduction of a new
product, or a significant
qualitative change in an
existing product.
The introduction of a
new process for making
or delivering goods and
services.

9. Radical vs Incremental Innovation
Incremental Radical
• Extension of existing
product
• Developed in response
to a specific market
need
• Customer pull
• New tech creates new
market
• Market creating
• Technology push
Substantial

10. Stages of Innovation

11. Where does this sit on the spectrum?
https://www.youtube.com/watch?v=dG0vLFFtZDs

12. What is disruptive/radical innovation?
https://www.youtube.com/watch?v=qDrMAzCHFUU#t=188

13. What is disruptive/radical innovation?

14. Lets consider some examples

15. But why is it important to innovate

16. But why is it important to innovate?
“Our resilient brands will
strengthen
their market positions and
performance as they
comprehensively satisfy the
preferences of our customers”.
“We are not changing direction
we will continue to move full-steam
ahead with our core business,
which is stores“
Chairman HMV, 2007 CEO Blockbuster, 2001

17. How do Western firms innovate?

18. For example, Unilever’s R&D center network

19. R&D at the heart of a business

20. However, emerging markets are developing
their own way of innovating
https://www.youtube.com/watch?v=hvMQKx-uBi0
Watch from 1:50

21. At the heart of Jugaad

22. So picture this scenario

23. What is it?
Jugaad Innovation
Jugaad is a colloquial Hindi word that roughly translates as ‘‘an
inno- vative fix; an improvised solution born from ingenuity and
cleverness.’’ Jugaad is, quite simply, a unique way of thinking and
acting in response to challenges; it is the gutsy art of spotting
opportunities in the most adverse circumstances and
resourcefully improvising solutions using simple means. Jugaad is
about doing more with less.
The word jugaad is
also applied to any
use of an ingenious
way to ‘‘game the
system.’’ A missed
call here and
there…

24. What is it?
Jugaad Innovation
https://www.youtube.com/watch?v=mrFyPaie3pQ

25. The 6 key principles of Jugaad
Seek
opportunity
in Adversity
Do More
with Less
Think and
Act Flexibly
Keep it
simple
Include the
margins
Follow your
heart

26. Thinking Outside the (Ice) Box
WHAT IF your fridge
can operate without electricity?
Source: http://www.mitticool.in/
Source: http://gizmodo.com

27. The Innovator’s Dilemma

28. The Innovator’s Dilemma
https://www.youtube.com/watch?v=qDrMAzCHFUU

29. The case of Kodak
A vacation with Kodak Focused on women
Made it social Introduced the brownie

30. But along came digital; why couldn't they
The
incumbent
s curse
Core
rigidities
Leadership
and
culture
Strategic
flux
Diversify
into what
exactly?
Cannibalisation
innovate?

31. High failure rates

32. How can you minimise failure? Market research…
…Think again…

33. Product and customer lifecycle

34. Change Management Approaches
S-Curve Paradox
Source: Handy (1994)

35. Change Management Approaches
Kotter’s Eight Steps
Source: http://www.kotterinternational.com/our-principles/changesteps)

36. Change Management Approaches
Congruence Model
Source: Nadler and Tushman (1988)

37. End of presentation
© Pearson College 2013