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The Making of BOEING 777

The Making of BOEING 777

Innovation Type: Product and Process Innovation

Background: When Boeing announced the development of a new airplane model -

Boeing 777 - in the late 1980s, many aviation experts wondered about the rationale
behind the decision. They questioned the need for a new model since Boeings highly
successful 747 model had been flying successfully for over 30 years.

Goals: To make the 777 model technically superior as compared to other competing
models during the time of its launch.

Actions (Actual Ideas):

The 777 was designed and developed in close collaboration and involvement
of Boeings customers, fellow aircraft manufacturers, airline users, engineers,
finance experts, technicians and computer experts.
Various computer based technologies like CAD, CAM and CATIA were used
in designing the 777.

Teams: Boeing and Boeings customers, fellow aircraft manufacturers, airline users,
engineers, finance experts, technicians and computer experts

Results (Benefits):
The 777 has a distinction of the first paperless designed aircraft in the
aeronautical history.
The Boeing 777 family came to be known as the builders of the most
technologically advanced aeroplanes.
The 777 design, innovative features and approach to manufacturing
established a benchmark for development of aircraft in future.
The management and technical approach used to develop the 777 were applied
to a number of projects including the International Space Station.


Revolution in the Global Aviation Industry

Revolution in the Global Aviation Industry

Innovation Type: Product and Service Innovation

Background: The aviation industry experienced a downturn in the early-1990s

because of the worldwide recession and the Gulf War. Capacity overload became a
common problem in most companies. Many airlines started focusing on cutting costs,
reducing capacity growth, and increasing load factors. However, customers began to
demand better services, which made the costs rise again.

Goals: To attract and retain customers, and make air travel facilitates economic
growth, world trade, international investment and tourism.

Actions (Actual Ideas):

Electronic booking of tickets services were launched.
Entertainment systems, advanced designing of seats and aircraft interiors were

Team: All airlines

Results (Benefits):
By the beginning of the 21st century, air travel had emerged as one of the
largest industries in the world.
The industry was seen by many nations as one of the key industries supporting
their economic activities.


Six Sigma at Motorola

Six-Sigma1 at Motorola

Innovation Type: Product and Service Innovation

Background: The US based Motorola Inc. lost business to its Japanese competitors

Goals: To achieve a ten-fold improvement in the quality of its products and services.

Actions (Actual Ideas):

An ambitious and innovative quality drive --- Six-Sigma, was launched in

Teams: Bill Smith (Smith), a Motorola engineer, was responsible for linking the term
of Six-Sigma with the companys quality initiatives.

Results (Benefits):
Motorolas Six-Sigma quality target achieved not more than 3.4 defects per
million products.
It also achieved customer satisfaction by providing the best quality products
and services, and significantly increased in companys sales.
Motorola acquired the reputation of being the quality leader, not just in
manufacturing but in every process including customer relations.
Between 1986 and 1988 alone, Motorola received 50 quality awards, and
became the only company in the world to have received the Malcolm Baldrige
National Quality Award twice


The term Six Sigma comes from the field of Statistics. Its origin as a measurement standard can be
traced back to Carl Frederick Gauss (1777-1855) who introduced the concept of the normal curve. Six
Sigma as a measurement standard in product variation could be traced back to the 1920s. Bill Smith
(Smith), a Motorola engineer, was responsible for linking the term with the company's quality

DHLs Business Strategy in China

DHL's Business Strategy in China

Innovation Type: Strategy Innovation

Background: The rapidly improving business environment in China and its entry into
the World Trade Organisation in 2001 attracted many multi-nationals to the country.
DHL was among those who recognised the potential for growth in the country's
express logistics industry.

Goals: To become an integrated one-stop supply chain solutions provider, offering

services in express, air & ocean freight and overland transport.

Actions (Actual Ideas):

A massive expansion program was initiated.
China Domestic, an international express service was launched, as a part of
the duos strategy to respond to the fast-changing customer requirements.
A door-to-door delivery service particularly targeting parcels and freight items
was offered.
Track-and-Trace technology was implemented


Results (Benefits):
DHL was able to offer shorter delivery and pick-up times, besides better
customer service and shipment visibility.
DHL emerged as the worlds leading express and logistics company.


BMWs Innovation Strategies

BMW's Innovation Strategies

Innovation Type: Strategy Innovation

Background: The Munich based Bayerische Motoren Werke AG (BMW) automobile

company grew into one of the leading automobile producers in the world by the
1990s, and radically changed the way BMW was handling innovation process
management at its automobile division.

Goals: To develop and demonstrate exceptional skills in constantly creating and

capturing value, through its innovations and development of new products.

Actions (Actual Ideas):

The new innovation management system was developed and implemented in
the 1990s.
Let innovation be the driving force for its product development process
throughout the late 1990s.


Results (Benefits):
BMW was able to exploit various path breaking technological innovations,
right from the idea generation stage to the market introduction stage.
The company was able to develop continuous stream of new products and
BMW successfully withstood competitive pressures and held on to its market
position, and established itself as one of the leading players in the premium
segment of the global automobile market.
BMW was awarded the Outstanding Corporate Innovator (OCI) title for 2002
by the Product Development & Management Association (PDMA).


Marriott's Customer - Focused E-Business Strategy

Marriott's Customer - Focused E-Business Strategy

Innovation Type: Strategy and Process Innovation

Background: In 1982, Marriott acquired Host International, a leading hospitality

services provider in the US, becoming the largest operator of airport terminal food,
beverage and merchandise facilities in the US.

Goals: To provide better customer service by using IT proactively and through the
facilities on offer through its website.

Actions (Actual Ideas):

Several innovative technologies had been introduced and implemented before
the competitors did. For instance, Marriott Automated Reservation System for
Hotel Accommodation (MARSHA) was launched in the 1980s, which was a
totally new concept of hotel reservation in the hospitality industry at that time.
$70 million was invested by the company over a two-year period to implement
a variety of IT applications in diverse functional disciplines such as sales,
accounting and personnel.
Continuous improvements in its business processes were made.
An e-business strategy was adopted in 1998.


Results (Benefits):
The company was switched over from a decentralised property-orientation to a
centralised customer-orientation in its services.
Clients are given access to the services offered by the entire Marriott chain of
hotels and resorts through the companys website.
The companys ability to serve its clients was boosted, and its financial
performance was strengthened.
Marriott International became the first hospitality company to win the CIO -
100 awards from CIO magazine for four consecutive years (2000-03).


Fannie Mae's Human Resource Management Policies

Fannie Mae's Human Resource Management Policies

Innovation Type: Culture Innovation

Background: Federal National Mortgage Association (known popularly as Fannie

Mae), achieved recognition not only for its financial performance but also for its
progressive human resource (HR) policies.

Goals: To recognise and retain talent, irrespective of class/gender/nationality.

Actions (Actual Ideas):

New HR policies were developed and implemented to offer a wide variety of
financial, health and career benefits, some of which were healthy living day
off, paid child adoption leave, elder care and child care programs, flexible
work options, Assistance for Collegiate Education (ACE) Program, Corporate
Mentor Program, mandatory diversity training, 10 hours of paid-off each
month for volunteer activities, and Employer-Assisted Housing (EAH).
The Office of Diversity was created in 1992 to promote diversity at the


The company earned the reputation of being one of the best companies to
work for.
The company had been included in Fortunes Best Companies for Minorities
list every year since 1998.


The Ford Production System

Innovation Type: Process Innovation

Background: Ever since it began operations in 1903, Ford Motor Company (Ford)
has been recognised as a manufacturing process innovator in the automobile industry.

Goals: To induce more flexibility and enhance the efficiency of its automobile
production systems.

Actions (Actual Ideas):

A reengineering effort known as Ford Production System (FPS) was
developed and implemented in its plants across the world.
Techniques used in lean manufacturing were implemented at all of its
manufacturing operations.
The human aspects were emphasised in the effort of reducing wastes apart
from using advanced technologies.

FPS enabled Ford to develop and apply the best practices in automobile
The company realised improved productivity levels and financial performance.
Three plants of Ford found a place in the list of the 17 manufacturing plants
across the world who received the Shingo Price for Excellence in
Manufacturing, termed by Business Week as the Nobel Prize of


8's Business Model's Business Model

Innovation Type: Technology and Service Innovation

Background: When the PayPal service was launched in 1999 to enable people to
settle small debts via the Internet, several analysts expressed doubts over its future.

Goals: To achieve the market leader in e-payment services, and bring a complete
transformation in the way people made online payments.

Actions (Actual Ideas):

A very competitive business model was adopted.
Appropriate security systems were in place to check frauds.
New services were consistently offered.
The network was expanded continuously.


Results (Benefits) has won the trust of millions of customers, and it grew from
10,000 customers in 1999 to 45 million customers in 2004.
PayPal became the most trusted payment system over the Internet, revealed by
a survey conducted by Gartner in 2002.


Volvos Product Development Practices - Focus on Safety

Volvos Product Development Practices - Focus on Safety

Innovation Type: Product Innovation

Background: Maryann Keller, an automobile industry analyst noted, Since the

introduction of airbags in the late 1980s, the industry has understood that safety sells.
A customer who buys a Volvo may find that incremental value is worth the cost
simply because (he or she) already places a higher than normal value on safety.

Goals: To manufacture the safest cars in the world.

Actions (Actual Ideas):

Conducting R & D for safety technologies has been constantly emphasised at
the company.
The Volvo Safety Centre, one of the most advanced safety engineering
facilities in the world, was inaugurated in 2000.
All Volvo vehicles and their components were subjected to safety tests
including computer simulation, component testing and crash testing.

Teams: The Volvo Safety Centre

Results (Benefits):
Several path breaking safety technologies were introduced by Volvo, which
were way ahead of the times.
The state-of-the-art safety technologies reaffirmed Volvos top position in the
field of automobile safety and contributed towards better accident prevention
in Volvo cars.
The company enhanced its brand image to such an extent that the name Volvo
became a synonym for safety.


Xerox PARC: Innovation without Profit?

Xerox PARC: Innovation without Profit?

Innovation Type: Strategy Innovation

Background: In the late 1990s and the early 2000s, Xerox experienced a meltdown
due to several corporate crises.

Goals: To streamline its operations and restore a semblance of stability. One of the
areas for cost savings identified by the company was the $70 million a year that it
spent on the maintenance of the Palo Alto Research Centre (PARC) which was set up
in 1970 as the research arm of the company.

Actions (Actual Ideas):

In late 2001 it was announced that PARC would be incorporated as a wholly
owned subsidiary of Xerox.


Results (Benefits):
The cost of maintaining PARC was saved.
The parent company would have access to all the technologies developed at
the centre. However, PARC would also be able to license its technologies to
other companies.


Lessons Learned from PARCs Failure for Profit:

The Palo Alto Research Centre (PARC) was set up in 1970 as the research arm of
Xerox Corp, to invent the technology of the future. In a little over 30 years since it
was set up, PARC invented a number of products which revolutionised the computer
industry. However, despite its scientific excellence, Xerox failed to capitalise on the
commercial potential of most of these innovations. Analysts believed the main reasons
Poor goal definition: the casual and flexible culture that prevailed at PARC,
allowed people to pursue projects of their interest with no concern for
commercial value.
Poor alignment of actions to goals: there was a basic mismatch between the
objectives and working methods of PARC scientists and the people at the
corporate office.
Poor management of actions: the distance of PARC from the corporate
headquarters cut off from the competition of the corporate world.

Merrill Lynchs IT Initiatives

Merrill Lynchs IT Initiatives

Innovation Type: Technology Innovation

Background: Known for its conservative approach towards client servicing and
having its focus on offering personalised services, the US-based Merrill Lynch &
Company (ML), a leading global financial services firm, had always been in the
forefront in the adoption of IT for serving clients better.

Goals: To offer high quality content and analytical tools to enable MLs financial
advisors create, use and track financial plans for their clients.

Actions (Actual Ideas):

The Trusted Global Advisor (TGA) platform was launched in the late 1990s.
After the TGA became obsolete with new customer-serving technologies
introduced in the early 2000s, a new information technology (IT) platform
called Wealth Management Workstation (WMW) was developed and launched
in collaboration with Thomson Financial in 2002.


Results (Benefits)
The way in which client services were delivered in the financial services
industry was significantly changed after TGA was launched.


Knowledge Management Initiatives at British Petroleum

Knowledge Management Initiatives at British Petroleum

Innovation Type: Technology Innovation

Background: The UK- based oil and gas exploration major British Petroleum Plc
(BP) became one of the first few companies to treat KM as a separate discipline when
it established the Knowledge Management Team (KMT).

Goals: To use the application of KM tools for reducing the emission of harmful gases
like carbon dioxide and methane.

Actions (Actual Ideas):

The Virtual Teamwork Project (VTP), its first major knowledge management
(KM) initiative was launched in 1994.
Various KM tools such as Peer Assist, After Action Review, BP Connect,
Retrospect and Human portal, were launched soon after the success of VTP.
A Knowledge Management Team (KMT) was established in 1997.
The Emission Trading System (ETS) was implemented in all units of the


Results (Benefits):
Excellent financial results for its business operations were reported after the
implementation of the KM initiatives.
By March 2002, due to ETS, BP could reduce the quantum of emissions from
all its business units by 10%.
Costs were reduced and the productivity and efficiency were enhanced of its
business operations due to the successful use of KM tools.


Charles Schwab Expanding Online Trading Applications

Charles Schwab Expanding Online Trading Applications

Innovation Type: Technology and Service Innovation

Background: The US stock market crash in October 1987 had a severe impact on the
brokerage industry. Trading volumes fell, commissions came down. Since Charles
Schwab & Co. Inc. (Schwab) depended heavily on discount brokerage commissions,
it was forced to explore the possibilities of expanding the range of services it offered.
The company soon realised the business opportunities offered by the World Wide

Goals: To provided high volume trading and customised, timely financial services for
NASDAQ securities and brokerage-dealers and institutional customers through over
310 branches

Actions (Actual Ideas):

The companys website was launched in 1995, and online trading commenced
in 1996, which allowed customers to get real time stock quotations, enter trade
orders, create a personalized asset allocation model, and access research
New features were constantly added to enhance the performance of its
The existing infrastructure was replaced by the late 1990s by a new enterprise
infrastructure, which could easily accommodate higher traffic, provide greater
flexibility and economy and render superior customer service.


Results (Benefits):
Schwab became the market leader in the global online broking and financial
services industry had a 30% market share of the industry in 2001.
It also accounted for one-third of overall global Internet trading businesses.
By integrating the online and offline worlds, Schwab has become the
benchmark for others going online
Customers significantly benefited from the wide variety of investing services
and pricing options provided by the Personal Choice program.


Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank

Knowledge Sharing Initiatives at the World Bank - Creating a Knowledge Bank

Innovation Type: Technology Innovation

Background: In 1996, the World Bank realised that the distance from its headquarters
to operational regions had become a major obstacle in objective achievement. In
October 1996, when the World Bank, announced that the organisation would
transform itself into a knowledge bank, there were mixed reactions. Some were
excited about knowledge management and its potential in helping the World Bank
achieve its objectives. Others considered it a waste of time and resources and felt the
Bank should stick to its original mission of eliminating poverty.

Goals: To transform itself into a knowledge bank.

Actions (Actual Ideas):

A global knowledge community was created using web-based tools, by
harnessing the vast amount of knowledge present across the organisation and
making it readily available to all employees and clients.


Results (Benefits):
Knowledge moved seamlessly across the world to make the work involved in
poverty elimination and economic development (the Bank's primary
objectives) faster and more effective.
In early 2000, the World Bank was recognized as one of the five top
knowledge management organizations in the US by the American Productivity
and Quality Centre (APQC).
In June 2000, the Bank featured in the list of the 10 top Most Admired
Knowledge Enterprises (MAKE) in a survey conducted by the KNOW


Mercedes Benzs e-Biz Solution: The Factory Delivery Reservation System

Mercedes Benzs e-Biz Solution: The Factory Delivery Reservation System

Innovation Type: Technology Innovation

Background: By the end of 1997, Mercedes Benz United States International

(MBUSI) started producing at full capacity. By 2000, the factory was rolling out
around 380 vehicles per day. Mass customisation required that each vehicle be treated
as a separate project, with its own Bill of Material.

Goals: To established itself as a company that delivered superior customer services,

besides a builder of the high-quality M-Class sports utility vehicle (SUV)

Actions (Actual Ideas):

The Factory Delivery Reservation System (FDRS), an enterprise wide
Information Technology (IT) system, was designed and implemented.

Teams: IBM Global Services consultants

Results (Benefits):
MBUSI was able to create and validate 1800 orders per hour.
Material requirements and Bills of Material for 35,000 vehicles were
generated automatically by FDRS per hour.
MBUSI not only managed to improve its customer relations by providing the
best service, but also demonstrated its commitment to customers by making
them an integral part of the process, with its innovative use of the FDRS.


Executing E-Business Strategies - The GE Way

Executing E-Business Strategies - The GE Way

Innovation Type: Technology Innovation

Background: Once upon a time, GE had almost missed the e-business boat.

Goals: To transform from a Brick & Mortar company into a Click & Mortar company.

Actions (Actual Ideas):

The Internet was adopted as an enabler of all business functions in the value
The Internet was used to re-engineer its business processes by removing
obsolete and redundant activities.
A transactional website was launched in 1997 by one of the companys
business units, GE Plastics (GEP), to eliminate the waste of time, labour and
money caused by the visits and phone calls between the concerned parties.
An artificial intelligence system to help field engineers attend to customers
requests for site visits was developed in 1998 by the Industrial Systems unit of


Results (Benefits):
Costs were dramatically cut, the cycle time was reduced, and the quality of its
services was improved through the BPR activities.
In June 2000, Internet Week (a leading IT publication in the US) recognised
GE as the E-Business of The Year.


Operations at Whirlpool

Operations at Whirlpool

Innovation Type: Technology and Service Innovation

Background: At Whirlpool Corporation (Whirlpool), logistics did not start with the
distribution of a finished product but was a true supply chain strategy, which
encompassed materials flow into and through the manufacturing process.

Goals: To get the right product to the customer when they expect it.

Actions (Actual Ideas):

Several cross-functional teams for key product areas were set up.
Several agreements with its suppliers were reached based on their reliability
and their ability to assist in product design.
Electronic Data Interchange (EDI) was adopted by 1999 to communicate with
its suppliers as a part of its supply chain initiative, in order to cut down on
Almost all the Whirlpool stores around the world were linked with e-business
software, which linked each of its factories and sales operations with suppliers
and key-retail partners.
An online sales program called e-Partner was launched in September 2002.


Results (Benefits):
By the early 2000s, Whirlpool had product availability in the range of 90 to 95
per cent.
Inventories were reduced by 15 to 20 per cent and lead times became as low as
five days.


Nokia - Fostering Innovation

Nokia - Fostering Innovation

Innovation Type: Process and Culture Innovation

Background: According to analysts, Nokia served as the industry model for

aggressively and effectively segmenting the mobile phone market and developing a
number of products for segments.

Goals: To create an inclusive environment, i.e. a culture which seeks to uphold and
benefit from diversity.

Actions (Actual Ideas):

A lot of importance to innovation and creativity was given.
A conscious effort to create and maintain a culture, which focused on diversity
and the benefits that accrued from it, was made.
The R&D system was an open one where any idea, no matter how absurd it
sounded initially, was given due consideration.


Results (Benefits):
A number of such absurd sounding ideas later emerged as star products or
features in the Nokia line-up.
By 2002, Nokia had emerged as the strongest brand in the mobile handset
By 2002, Nokia had a market share of about 36%, which was much larger than
that of its competitors.


Ericsson in the New Millennium

Ericsson in the New Millennium

Innovation Type: Strategy Innovation

Background: Ericsson, the Swedish telecom giant, enjoyed immense success until
the 1990s. However, it failed to adapt its mobile handsets to consumer tastes, and this
led to a fall in sales of its handsets. Its competitors meanwhile took over Ericssons
space in the market. As sales fell, Ericssons other businesses were also affected.

Goals: To restrict the downslide in its sales.

Actions (Actual Ideas):

Ericsson marked out its core competencies and then focused on them.
A joint venture to form Sony Ericsson- a company that would combine
Ericssons technology with Sonys understanding of the consumer market was
Free from the handset business, Ericsson concentrated on its core businesses-
the 3G technology and wireless telephone networking


Results (Benefits):
By 2003, Sony Ericsson broke even and was firmly on the path to profit-
Ericsson managed to establish its supremacy in the 3G technology although
the market was still relatively small.
Ericsson has reinvented itself as a lean, modern, advanced, cost-conscious and
competitive organisation.


Sears Logistics Management Practices

Sears Logistics Management Practices

Innovation Type: Process Innovation

Background: The US retailing giant - Sears, Roebuck & Company (Sears) was in
deep trouble during the early 1990s. In the course of fiscal 1992, Sears hired an
outsider - Arthur Martinez (Martinez) to head its merchandise division.

Goals: To make Sears logistics management system more efficient.

Actions (Actual Ideas):

Martinez focused on streamlining the logistics management practices by
consolidating distribution centres, increasing warehouse automation, and
reducing transportation costs.
Wireless Mobile Systems were installed in the Retail Replenishment Centres
(RRCs) in 2001.

Teams: Arthur Martinez, head of the merchandise division and William Gus Pagonis,
Executive Vice-President.

Results (Benefits):
The merchandise division was able to make a profit in the next year of
Martinezs drastic changes in the division.
Sears became one of the few retailing companies which applied military
logistics strategies in practice.
Sears had always been among the first movers to adopt modern IT tools and
Internet-enabled technologies in logistics management.


Gateway - Implementing Innovative Strategies in the IT Industry

Gateway - Implementing Innovative Strategies in the IT Industry

Innovation Type: Service Innovation

Background: During the initial years of the new millennium, due to the slowdown in
the IT industry, the leading computer retailer US based Gateway Inc (Gateway)s PC
business performed badly. The company also faced stiff competition in the various
services it had newly introduced.

Goals: To revival the business after the fall partly caused by the stagnation in the IT

Actions (Actual Ideas):

A new strategy was launched in October 2002, which involved a change in its
logo and retailing of many new consumer electronic products through its own


Results (Benefits):
In spite of the stagnation in the IT industry, Gateway reported reduced losses
of $297 million for the fiscal 2002 due to the measures it had taken.


Intel's Centrino

Intel's Centrino

Innovation Type: Product Innovation

Background: In developing the Pentium M, at its labs in Israel, Intel had solved one
of the historical problems with Pentium notebooks, power consumption. Despite new
chip technologies and industry wide efforts in the 1990s to increase overall notebook
energy efficiency, growing screen sizes and faster chips wiped out many of the gains.

Goals: To develop a new range of Central Process Unit (CPU) ideally suited for a
range of thinner, lighter notebooks that deliver the levels of performance needed in
mobile computing.

Actions (Actual Ideas):

Rather than retrofit the Pentium, Intels Israeli team decided to start from
The latest generation of enhanced Intel SpeedStep technology was adopted in
The Micro Ops Fusion program combined routine instructions and tasks.
The Advanced Branch Prediction program let the processor better schedule
Different parts of the chip were designed to shut down when not in use.

Teams: Intels Israeli R&D team.

Results (Benefits):
Centrino enabled extended battery life, and sleek, easy-to-carry notebook
Centrino delivered a significantly enhanced performance in wireless


Microsoft in 2004: Shaping a New Image

Microsoft in 2004: Shaping a New Image

Innovation Type: Culture Innovation

Background: By the early 2000s, Microsoft had become large and unwieldy. The
companys days of rapid growth appeared to be over. The effort of exploring other
product segments had not yet yielded profits. Microsoft realised that in the aftermath
of the antitrust case, it needed to project a new image befitting a large company as
opposed to a start up.

Goals: To adjust the companys culture to its status of industry leader.

Actions (Actual Ideas):

The lower level employees have been empowered while the attitude of
winning at any cost was abandoned.
Employees were asked to be open and respectful, less secretive, less
mysterious and more communicative, towards people and organisations

Teams: Microsofts new CEO Steve Ballmer appointed in early 2000.

Results (Benefits):
The companys ability to innovate and compete effectively in the emerging
business environment was improved.


Wal-Mart in 2004: Creating a New Image

Wal-Mart in 2004: Creating a New Image

Innovation Type: Strategy Innovation

Background: During the time when Wal-Mart had been relatively small, the public
relations department's main function was to keep Wal-Mart out of the news. However,
the more Wal-Mart grew and the more financial success it had, the more the media
paid attention to it. The negative publicity resulting from a series of incidents in 1992
made Wal-Mart realise that the company had become visible, exposed and vulnerable
to media attention.

Goals: To shape its public relations strategy to create a new image.

Actions (Actual Ideas):

A proactive approach was adopted to manage relations with external
stakeholders and the media.
Wal-Mart has set up a government relations department in Washington.
Employees are being encouraged to participate actively in local community

Teams: Wal-Marts Public Relations department

Results (Benefits):
Wal-Marts Public Relations department has become more proactive, media
friendly, and has attempted to portray the company as a leading retailer, good
employer, and responsible corporate citizen.


Business Model Innovation at Dell

Business Model Innovation at Dell

Innovation Type: Strategy Innovation

Background: Many players in the PC industry have attempted to replicate Dells

business model but failed. It is Dells disciplined execution that has driven Dells

Goals: To become the leading players in the PC industry.

Actions (Actual Ideas):

Dell has created a direct selling model and build-to-order format.
The company had concentrated on activities where it could add most value and
on market segments where profits were highest.
Dell had taken care to ensure that customer service was not diluted in the
process of cutting costs.
In addition to the site which offered various services to
customers, Dell offered customer-specific sites called Premier Pages, which
provided facilities such as paperless purchase orders, real-time order tracking
and purchase history.


Results (Benefits):
The company maintained momentum in a rapidly commoditising industry,
where most other players were struggling.
During the period 1997-2002, Dell's global market share of PCs went up from
5% to 15%.
In many product categories, Dell set the standard for customer service.
Dell has also demonstrated that it is not R&D spending alone which
determines a company's success.


FedEx: Competitive Advantage through Information Technology

FedEx: Competitive Advantage through Information Technology

Innovation Type: Strategy and Technology Innovation

Background: Began as an express air delivery company in the early 1970s, FedEx
has successfully transformed itself into an integrated transportation and logistics
service provider. A major part of FedExs success is directly attributed to its
committed use of information technology (IT).

Goals: To transform into an integrated transportation and logistics service provider.

Actions (Actual Ideas):

FedEx was the first who give away more than 100,000 PCs loaded with FedEx
software, which was designed to link and log customers into FedExs ordering
and tracking systems.
FedEx was also the first to issue hand held scanners to its drivers that alerted
customers when packages were picked up or delivered.
FedEx also offered a number of IT related solutions that supported its clients
in areas like warehousing, inventory management, billing and invoicing, and


Results (Benefits):
Clients were provided with seamless logistic and supply chain solutions.
FedEx has successfully transformed itself into an integrated transportation and
logistics service provider.


IKEA: Managing Global Expansion

IKEA: Managing Global Expansion

Innovation Type: Strategy Innovation

Background: Most of the time, beautifully designed home furnishings are created for
a small part of the population - the few who can afford them. From the beginning,
IKEA has taken a different path. They have decided to side with the many.

Goals: To offer a wide range of home furnishings with good design and function at
prices so low that as many people as possible will be able to afford them, and still
have money left!

Actions (Actual Ideas):

High-quality and Scandinavian design.
No delays in delivery.
Global sourcing of components.
Knock-down furniture kits that customers transported and assembled


Results (Benefits):
IKEAs cost leadership strategy had enabled it to pass on to customers lower
prices, anywhere from 25% to 50% below those of its competitors.
IKEAs business model had gradually revolutionised the conservative national
furniture markets first in Europe and then in other parts of the world.


Procter & Gamble in 2004: Managing Product Innovation

Procter & Gamble in 2004: Managing Product Innovation

Innovation Type: Strategy and Culture Innovation

Background: By the summer of 2000, things were not looking good for the US based
Procter & Gamble (P&G), one of the most well known consumer goods marketing
companies in the world. Costs had gone up, volumes stagnated and profit margins had
shrunk on P&Gs biggest brands like Pampers, Tide, and Crest.

Goals: To turnover its declined business.

Actions (Actual Ideas):

The company had focused on building the core brands.
Many products prices were cut.
Lafley had attempted to introduce more creativity into P&Gs innovation

Teams: CEO of P&G Alan Lafley appointed in the summer of 2000

Results (Benefits):
Many new products were launched.
Over the past three years, core volume (units sold in P&Gs existing
businesses) rose on an average by 7% annually.
Since 2002, P&G has improved its new-product hit rate (the percentage of new
entries that deliver a return above the cost of capital) from 70% to 90%.
In the first quarter of 2004, 19 of P&Gs 20 largest brands improved their
market shares.


Toyota in 2004: Managing Innovation in the new millennium

Toyota in 2004: Managing Innovation in the new millennium

Innovation Type: Process Innovation

Background: Despite its pioneering efforts in Just-in-Time, one of the challenges

which Toyota faced was in moving towards a Build-to-Order system, especially
outside Japan. Build-to-Order demanded flexible manufacturing systems that allowed
switching from one model to another with ease.

Goals: To build greater flexibility and facilitate mass customisation.

Actions (Actual Ideas):

Toyota had been revamping its ordering, manufacturing and distribution to
make it easier for dealers and customers to make changes right before
Toyota spent four years developing software that connected dealers to
factories and factories to suppliers.
Toyota also streamlined the logistics process, according to which finished
vehicles were sent to sorting docks where they could be grouped by region.


Results (Benefits):
The new ordering, manufacturing and distribution system not only improved
customer satisfaction but also cut dealer inventory costs and the need for
Toyota to offer rebates for slow-selling vehicles.
The new logistics process cut delivery by two days.


Restructuring Philips

Restructuring Philips

Innovation Type: Strategy and Culture Innovation

Background: Philips was on the verge of bankruptcy in May 1990 when the company
posted losses of $2.6 billion.

Goals: To turn the company around, foster greater cooperation among its various
divisions, get rid of the bureaucratic work culture prevailing in the company and
promote teamwork.

Actions (Actual Ideas):

Philips initiated job cuts, sold unprofitable businesses and closed down many
manufacturing facilities worldwide throughout the 1990s.
In late 1999, Philips embarked on a worldwide marketing campaign for the
first time in its history.
In 2001, the Towards One Philips (TOP) restructuring program was launched.


Results (Benefits):
The restructuring efforts in the 1990s helped improve the financial health of
the company but were not able to address concerns like the bureaucratic work
culture and the companys poor marketing of its products.
The company made a clean break from its past image as a technology-oriented
company to one that was market-oriented through the marketing campaign.
The TOP program has achieved cut cost, develop innovative products and
technologies, and improve relationship with customers.


The McDonalds Turnaround Story

The McDonalds Turnaround Story

Innovation Type: Strategy Innovation

Background: By the late 1990s, after years of declining earnings and poor customer
ratings, McDonalds Corp. (McDonalds), the largest fast food chain in the world,
seemed to have lost its claim to providing the Great American Meal.

Goals: To turnaround the company from declining.

Actions (Actual Ideas):

McDonalds adopted the Plan to Win turnaround program in early 2003.
The company introduced substantial system-wide changes that overhauled the
companys products, operations and marketing.
The company moved quickly to tailor its operations to the changing trends in
the fast food industry

Teams: Jim Cantalupo who was made CEO in early 2003, and Charlie Bell the
president and COO were the leaders.

Results (Benefits):
The new plan eliminated the negative elements in the system, while retaining
and building on the positive aspects.
Critics who had been sceptical about the companys ability to revive were
In the quarter ended July 2004, the company announced a 25 percent increase
in profits over the corresponding quarter of the previous year, and sales
reached a 17-year high.


IBMs Turnaround and its New Business Model

IBMs Turnaround and its New Business Model

Innovation Type: Strategy Innovation

Background: In 1993, International Business Machines (IBM), a global leader in the

IT industry was in deep financial trouble. The company had reported a net loss of $8.1
billion, the largest ever in the history of IT industry.

Goals: To revive the companys business.

Actions (Actual Ideas):

IBM was transformed from a company that primarily manufactured
mainframes to a company that offered complete IT solutions.
The company changed its focus from being product centric to being customer-
IBM launched new services-heavy business model.

Teams: Louis V. Gerstner was the leader.

Results (Benefits):
IBM has made the most remarkable turnaround of any company ever --- in the
fiscal 2003, IBM reported a net income of $7.58 billion on revenues of $89.13
During the period 1994-2003, the share price of IBM shot up by nearly 700%.
IBM not only turned around but, was able to significantly boost its financial


Reengineering & Restructuring at Canon

Reengineering & Restructuring at Canon

Innovation Type: Process Innovation

Background: In the mid-1990s, Japans leading photocopier and camera

manufacturer, Canon Inc (Canon), embarked upon turning itself into a truly global

Goals: To turn itself into a truly global corporation.

Actions (Actual Ideas):

The company embarked upon a massive reengineering program, Excellent
Global Corporation Phase I and II in 1996.
Many changes were introduced in the companys manufacturing and
management processes.

Teams: The management team lead by Fujio Mitarai.

Results (Benefits):
Canon was able to revive itself without adopting painful strategies.
In 2002, Canons total sales were 2,940,128 million, an increase of 381,901
million from 1996. Its net income increased from 94,177 million to 190,737
million during the same period.


PepsiCos Distribution and Logistics Operations

PepsiCos Distribution and Logistics Operations

Innovation Type: Process Innovation

Background: Headquartered in New York, the US-based PepsiCo is one of the

worlds leading beverage and snacks food companies. Analysts felt that one of the
main reasons for the companys success was its efficient distribution and logistics
management operations.

Goals: To set up highly advanced distribution system.

Actions (Actual Ideas):

PepsiCo upgraded its technical capabilities consistently in order to strengthen
its logistics management activities.
PepsiCo developed various standard distribution methods, such as the Direct
Store Delivery (DSD) system, the broker warehouse system, the vending and
food service system and the pre-sell method.
Depending on the product involved, PepsiCo chose between the distribution
PepsiCo also adapted these systems to the local conditions of the various
countries in which it operated.


Results (Benefits):
This efficient distribution and logistics management system has successfully
reduced costs and created value for customers
PepsiCo has gained massive growth and acquired the leadership status in
almost all its business segments.


Coca-Colas Re-Entry and Growth Strategies in China

Coca-Colas Re-Entry and Growth Strategies in China

Innovation Type: Strategy and Process Innovation

Background: The Coca-Cola Company (Coke) re-entered China in 1979. Today it is

recognised as one of Chinas most trusted brands according to Interbrand. Cokes top
managers and industry observers too believe that it is the company's winning
approach of Think Local, Act Local that has enabled it to capture markets outside of
the United States.

Goals: To localise the entire Coca-Cola system to the Chinese market.

Actions (Actual Ideas):

Coke encourages local managers to develop strategies that are best suited for
their areas, and regional offices have the freedom to approve local initiatives.
Coke worked closely with Chinese state-owned enterprise, formed joint
ventures with state-owned enterprises to set up more bottling plants.
Coke developed its own infrastructure for distribution but gradually came to
mainly rely upon state-owned distribution companies and local Chinese
distribution companies.


Results (Benefits):
Since 1990 it has been making profits in China and according to AC Nielsen it
had a market share of over 50 percent share of the Chinese beverages market
in 2002.


The eCitizen Portal - Integrating Government Services Online in Singapore

The eCitizen Portal - Integrating Government Services Online in Singapore

Innovation Type: Service Innovation

Background: In October 2002, Singapores eCitizen portal was declared the winner
of the prestigious Stockholm Challenge Award in the e-government category. The
competing e-government projects were evaluated on the basis of four criteria, namely,
Innovation, User needs, Transferability and Accessibility.

Goals: To improve the governments service delivery and interaction with citizens.

Actions (Actual Ideas):

The concept of Many Agencies One Government was embodied in the
eCitizen portal.
The eCitizen portal integrated public services across government agencies, so
that public services were delivered with one-stop convenience.


Results (Benefits):
The portal eliminated the need to log onto several websites to access the
services of different government departments.
It revolutionised the manner in which government-to-citizen (G2C) and
government-to-business (G2B) interaction took place.


IKEAs Innovative Human Resource Management Practices and Work Culture

IKEAs Innovative Human Resource Management Practices and Work Culture

Innovation Type: Culture Innovation

Background: The retail sector, especially in the United States, was not known for
being employee-friendly. Many large retailers paid low salaries and offered negligible
benefits while expecting employees to work long hours. Consequently, it suffered
from high human resource (HR) costs, as companies had to recruit and train
replacements at frequent intervals. In this context, IKEA stood out for its employee-
friendly policies and generous benefits, which made it the preferred employer in the
retail sector.

Goals: To promote life balance and diversity in the company.

Actions (Actual Ideas):

Several human resource management practices were adopted, including
flexible work design, comprehensive benefits, quality of work life, and
employee training and development.
The company also created unique work culture that supported co-workers (as
employees were called at IKEA) and encouraged creativity and diversity.


Results (Benefits):
IKEAs committed workforce has become one of the sources of the companys
innovative concepts.
IKEA North America (IKEA) was in the annual list of the Fortune 100 Best
Companies to Work For.


AIGs E-Business Risk Insurance Solutions

AIGs E-Business Risk Insurance Solutions

Innovation Type: Product Innovation

Background: Since the late 1990s, the Internet has been widely used as a channel for
communication and e-commerce by individuals and businesses. The use of Internet
involves several cyber risks such as hacking, systems getting infected by viruses and
worms, identity and credit card frauds and breach of network security. However, these
cyber risks were not covered by regular insurance policies. The US-based American
International Group launched AIG eBusiness Risk Solutions (AIG eBRS) in 2000
exclusively to address these cyber risks.

Goals: To address the risks caused in e-Business.

Actions (Actual Ideas):

AIG has broadened the portfolio of its insurance product offerings by
introducing a series of comprehensive liability coverage for companies
conducting business on the Internet.
AIG covered claims arising from the errors or deficiency in service provided
by the insured company due to security problems and fraud
Insurance cover was also provided against unknown viruses, unauthorised use
or access of systems, allegations of infringement of copy rights and
trademarks, libel or slander resulting from media services such as website
design or hosting.


Results (Benefits):
AIG has emerged as the largest provider of e-business risk insurance
worldwide with over 70 per cent market share.


Turnaround of J C Penney

Innovation Type: Strategy Innovation

Background: J C Penney Company, Inc. (JCP), a leading retailer in the US with a

century of history, found itself unable to keep pace with the changes taking place in
the retail environment in the late 1990s. The growth strategy, which had made the
company successful, became a barrier for its effective functioning in the late 1990s.

Goals: To turnaround the company.

Actions (Actual Ideas):

The company centralised its buying process consequently moved from a
decentralised merchandising system to a centralised merchandising system.
It sold off its drugstore Eckerd in order to focus on its core business.
It revamped its human resource practices by aligning the HR practices with the
business goals.
The company repositioned itself as a trendy, yet value offering retailer.


Results (Benefits):
These restructuring initiatives resulted in increased revenues for the company
and improved stock values from $10 in 2000 to almost $50 in 2005.