Overview of Woolworths
Organisations need to develop techniques that are necessary to ensure that innovation takes place. Innovation helps in the satisfaction of the customers and ensures that every organisation gets the global recognition due to the proper innovation of products and services. In the word of Etzkowitz and Ranga (2015), innovation in product and services can be important for customers so that the monotonous feeling can be curved and uniqueness in the products and services can be maintained. The focus of the assignment is to develop a framework that can help in maintaining innovation in organisations. The framework used can help organisations conduct a systematic analysis of the innovation process and develop its framework. The assignment focuses on Woolworths, which is one of the biggest retail markets in Australia. The company specialises in selling products that are used for maintaining daily life purposes (Woolworthsgroup.com.au, 2018). A detailed overview of the company is provided along with the concept of innovation. The various types of innovations are analysed and recommendations are provided about the type of innovation that can be used by Woolworths. The gap in the application of the framework is also analysed in the assignment.
Woolworths is one of the biggest companies in Australia that contribute about 50% growth of the economy of Australia. Woolworths is one of the companies that own certain companies as subsidiaries. Woolworths was established in 1924 in the city of New South Wales. The company along with Coles form a duopoly that contributes to the growth of the Australian retail market by about 80%. One of the biggest advantages of the company is the fact that it has over 995 physical stores all over the country and is one of the best local stores in the region of its production. As such, it can be said that the number of employees working in the company is about 202,000. This contributes to having employees working as a team in an effective manner (Woolworthsgroup.com.au, 2018). The aim of Woolworths is to ensure that fresh materials are produced that can satisfy the customers. Hence, the company grows fresh fruits and vegetables. The mission of the company is to expand itself in other countries so that it can remain the best in the retail sector in Australia (Woolworthsgroup.com.au, 2018). Woolworths has also formulated a strategy that can help in maintaining the fresh produce in the company. The strategy undertaken by the company is the setting up of Woolworth’s Australia’s Fresh Food People. This act is considered as a corporate social responsibility for the company and helps in maintaining the satisfaction of the customers.
Understanding the Concept of Innovation
Innovation is considered as a process that can be used to develop new ideas and promote changes in an organisation. In the words of Drucker (2014), innovation can help in developing solutions that can be used to address the changing needs of the customers and ensure that every customer is satisfied with the result that emerges from the innovation process. Innovative solutions are usually better than the solutions that existed and as a result, the new requirements of an organisation can be met by the application of new changes. Most organisations apply innovation to meet the needs of the customers as well as maintain competitiveness in the market in which it works. The key to ensuring that proper innovation is achieved is by following trends that are related to products, process, services and technologies. In this regard, it can be said that the managers consider innovation as an entirely different approach. In fact, Bain and Kleinknecht (2016) are of the opinion that differences exist in the process of innovation and invention.
The biggest difference that can be seen is the fact that invention includes the discovery of the new things. New ideas to ensure that development takes place in an organisation are done with the help of invention so that competitors find it complex to continue with maintaining the trend. On the other hand, innovation deals with maintaining changes in an organisation after the application of a process (Bernstein 2015). The changes are made keeping in mind the monotonous and emergence of new business requirements in the market. Thus, innovation can be considered as the original ideas that can help in the development of the process in an individual. However, various scholars have managed to portray innovation in a number of other ways. For example, Vargo Wieland and Akaka (2015) are of the opinion that management science defines innovation as a process that can be used to create various ideas that are useful for the satisfaction of the customers.
Like other managerial concepts, innovation can also be of various types that help in ensuring that organisations gain the effective results required for success in a business. In the words of Gawer and Cusumano (2014), innovation can be designed into two broad categories that provide different dimensions in the business. These dimensions are important for the well-being of an organisation in the business market so that it can flourish in the competitive market. The two dimensions include market and technology that are inconsistent and can change on a regular basis. The division of the dimension of innovation opens up the opportunity to analyse four types of innovation that can be used by managers.
Analyzing the Types of Innovation
Architectural innovation: Dutta, Lanvina and Wunsch-Vincent (2015) are of the opinion that architectural innovation is the proper application of the various lessons that have been learnt in the training and induction process in an organisation. The application of the methods of work and the manner in which technology can be applied in different markets are analysed and applied so that organisations can develop a clear understanding of the concepts of innovation. One of the biggest advantages that can be obtained from this type of innovation is the fact that it can attract customers in the existing market, Most of the times, the customers that exist in a responsive market is targeted by the companies. However, Van Oort (2017) stated that certain risks are involved in the application of the innovation. The fact that this type of innovation can be applied in areas that are already proven by technology adds to the disadvantage in the market. At the same time, it is necessary that the requirements related to the development of organisations be met. An example of architectural innovation can be the attempts made by NASA to improve the aircraft cushions and make the aircrafts safe.
Disruptive innovation: This is a more common type of innovation method and involves a complete and outright change in strategies of an organisation. Disruptive innovation is often referred to as the stealth form of innovation that is practised in an organisation. According to West and Bogers (2014), a disruptive method usually involve technology and managerial developments in an organisation so that the current requirements of a market can be analysed. However, the development of the new technologies can be superior as well as expensive for most companies. Despite this, existing companies and new companies benefit from this type of innovation as the technologies can be easily replaced in these companies. Thus, threats to markets can be implemented with the application of disruptive innovation (Adams et al., 2016). One such example of a company that has used disruptive innovation is Apple. The introduction of smartphones has made users refrain from using buttons to deal. Instead, the new ventures in case of mobile phones have helped in using phones without the application of buttons.
Incremental innovation: Incremental innovation is often considered as the most popular and simple type of innovation. In the words of Kleinknecht (2016), this type of innovation can be used by organisations in every manner and at any type of time in the organisation. This uses the technologies that exist in an organisation and tries to increase the value of the customers. The application of incremental innovation takes into account the features of an organisation and the designs it undergoes in the products and services. The effective analysis of the changing markets is conducted so that the innovation technique implemented can address the requirements of the market. Bernstein (2015) is of the opinion that organisations engage in incremental innovation at any point of business so that instant changes can be made in an organisation by considering the market.
Radical innovation: Camisón and Villar-López (2014) is the most common type of organisation that can be considered while considering innovation in an organisation. The advantage of this type of innovation is the fact that it helps in the creation of new industries in the market that can help in increasing the economic condition of a country. Radical innovation utilises the technical aspects that exist in a market and applies it to success in an organisation. For example, aeroplanes were first made to be used only in combat with the enemies. However, with changes in the market and development of new routes, an aeroplane was utilised to provide services to people and help them to travel from one place another. Thus, a new industry emerged in the market that helps people with opportunities for employment.
Figure 1: Types of innovation
(Source: Adams et al., 2016)
One of the main reasons for the innovation of organisations is that it helps in maintaining competitiveness in the market and increases opportunities to increase productivity in the market. As such innovation frameworks can be developed that highlights the importance of the innovative technique that is used and consequently ensured that an organisation maintain its identity as an innovative competitor. Chesbrough, Vanhaverbek and West (2014) pointed out that organisations tend to make innovations on products by assessing the level of risk involved and the manner in which the products and services are accepted in the society. Therefore, it is necessary that managers manage to identify a market that can help in the growth and expansion of the organisation through innovation. Hence, the application of frameworks can be done to ensure that such growth takes place. In this regard, the application of the Value-Added Corporate Innovation Management Framework can be used for analysing this expansion. According to Christensen, Raynor and McDonald (2015), the framework provides a comprehensive analysis of the five layers that are used for the effective innovation of business. This includes:
Business base: The business base is used to gain knowledge of the market and covers the overall activity in the market. This can be used to conduct a market research and develop business organisational goals necessary for an organisation. This is the foundation of the domain and based on the analysis conducted in this particular field, organisations can develop an innovation strategy that can help in addressing the requirements of the customers and the relevant goals (Johnston and Marshall, 2016).
Resources: This includes the resources such as the employees and the equipment used by an organisation to conduct business. It is universally considered that without skilful employees, organisations cannot function well in the industry. Therefore, the people along with the facilities need to be developed for the proper conduct of daily activities in the organisations.
Culture and Organisation: This particular domain is necessary for analysing the leadership skills that exist in an organisation. The employees in an organisation develop leadership skills that are necessary for conducting the activities of an organisation in an effective manner. Furthermore, Smith et al. (2017) opined that an organisation need to remain true to its culture so that customers do not have to form the wrong impression on the company.
Solutions: The solutions help in the process for employees to remain imaginative while performing work in the organisations. One of the most important factors for organisations is to ensure that the employees remain imaginative so that proper innovation can take place. The process used in organisations are scrutinised along with the tactics to consider the critical factors that affect an organisation.
Value: The value is the final domain and exists at the top of the hierarchical framework. The value determines the brand and recognition received by an organisation from the customers. Delicate matters effective for proper business in organisations are effectively analysed so that innovation can place and the value of an organisation increases. Thus, the application of this particular framework can be judged by analysing its effectiveness in a company like Woolworths.
Figure 2: Value-Added Corporate Innovation Management Framework
(Source: Kogan et al., 2017)
Lusch and Nambisan (2015) opined that most reputed organisations tend to use an innovative framework that helps in strengthening the position it holds in the market. This is mainly because of the fact that the frameworks used help in analysing the manner in which organisations use its capabilities and forms strategies necessary for conducting effective innovation in business. The application of the Value-Added Corporate Innovation Management Framework can be useful for any organisation as it can help in a systematic conduct of innovative practice that needs to be followed with the help of every domain. Therefore, Woolworths can use it to improve its capabilities and become the number one organisation present in Australia. Hence, three areas of issue are identified in the company, which require the effective application of the framework.
It has been seen that Woolworths suffers from three major issues that may hamper the existence of the company as the best organisation in Australia. These issues include an absence of an appropriate process in the organisation, rapid transformational change and resistance to change. These issues are common in organisations and mitigating of these issues is required so that Woolworths can fulfil its objectives along with its mission and vision. According to Manzini and Coad (2015), Woolworths need to develop a process that can help the company reach out to its customers. In the modern world, an opinion of the customers is an important factor for organisations to develop. Hence, a process such as the development of the IT factors for engaging in conversation with the employees is required for Woolworths to maintain. This can help the company to understand the reactions and thoughts of the employees. Thereby, strategies can be maintained to address the innovations in the organisations.
The second issue that has been identified is the rapid transformational change that is undergone in a company. Shalley, Hitt and Zhou (2015) are of the opinion that changes are required in an organisation so that improvement can be made in the production and supplies. Without proper change, it can be difficult for organisations to implement innovative tactics. However, Woolworths undergo a rapid transformational change that includes transforming the entire organisation to a certain level of work. This causes hindrance in an organisation, as a proper method of settling into a rhythm of work cannot be maintained. Thus, it is necessary to implement changes only in the time of requirement. Innovation, in this case, is necessary by analysing the third domain of the innovation framework that suggests that the culture of an organisation need to be maintained. In the case of Woolworths, the culture of the organisation is formed mainly due to its popularity with the people. Hence, it is necessary for the company to implement innovation so that transformational changes can be prevented (Woolworthsgroup.com.au, 2018). Thus, it can be said that the application of the innovation framework can help in addressing this particular issue of Woolworths.
The third issue that has been identified in Woolworths is the result of the rapid changes in the organisation. This includes the resistance to the changes in the organisation. Anderson, Poto?nik and Zhou (2014) stated that excess exposure to a particular thing might cause it to lose value. This is considered as the case that Woolworths have to suffer as the rapid and continuous changes in the organisation have made the employees resistant to it. Employees do not react to the changes that are implemented in the organisations, as it is a known fact that the changes taking place cannot have much effect on the organisation. Therefore, it is important that innovation is developed to mitigate this threat in the organisation. The innovation framework can be applied to this issue is by understanding the factors that drive the changes in the organisation. The resources need to be maintained so that Woolworths can understand the manner in which the employees react to the changes (Woolworthsgroup.com.au, 2018).
After the analysis of the innovation framework that is the application of the Value-Added Corporate Innovation Management Framework, it can be said that the framework provides certain gaps that are necessary to be researched. The application of this framework in a company like Woolworths has also managed to identify certain gaps that can be the cause of hindrance in the company. These gaps need to be addressed so that Woolworths can maintain its position in the retail markets of Australia. As such, the focus of analysis needs to be on the three issues that have been identified in the context of the business in Woolworths. For example, in the case of developing an appropriate process, Woolworths need to aim at the development of a particular process for a particular department. Barrett et al. (2015) stated that in the modern world, identifying an appropriate process for could mean applying the process in every department. Hence, the process needs to be in line with the objectives and culture of Woolworths. Woolworths can develop the application of customer interaction as a process, after the analysis of the market in which it works (Woolworthsgroup.com.au, 2018). The second issue includes the rapid transformational changes in the organisations. Changes in an organisation often bring about the downfall in the productivity, as employees need time to adjust to the changes. The application of rapid changes in an organisation may bring about its downfall and consequently prove to be more ineffective for the organisations (Moulaert, 2016). To address the change it is necessary that Woolworths understand the need of the employees and follow the cultural trend of the organisation. The fact that culture is considered as the third domain of the innovation framework makes a strong gap between the organisations. Therefore, it is necessary that Woolworths consider this gap for the welfare of the organisation and ensure that the culture of the organisation is maintained (Woolworthsgroup.com.au, 2018).
The third gap of Woolworths that need to be analysed is resistant to changes in the employees. The excess exposure to changes can make the employees immune to the changes thereby providing ineffective application of the intention of changes. As stated by Parker and Van Alstyne (2017) employees need to understand the effectiveness of the changes that take place in the organisation. Therefore, it is necessary that Woolworths identify the requirements of the employees so that it can manage the employees in an effective manner. The second domain of the innovation framework focuses on managing the resources in the organisations. The resources include the employees and the equipment. However, it is not stated as to the manner that can be best applied for managing the resources. Hence, it is necessary for the managers of Woolworths, to identify the necessities of the organisation and the manner in which it can help in making the changes effective.
Hence, it can be said that to maintain the effectiveness of the organisation, it is necessary that Woolworths maintain innovative tactics that are best suited for the organisation. Certain methods can be undertaken to address the gaps and get results in the most effective manner (West et al., 2014). The managers of Woolworths need to adopt a radical innovative method so that the organisation can come with a new brand of product (Woolworthsgroup.com.au, 2018). The rapid changes that Woolworths undertake can be mitigated with the application of this method and Woolworths can identify the technologies that are required for maintaining its business. An appropriate process for the welfare of the organisation can be the adoption of technologies in the organisation. This can help Woolworths increase its worth in the market and remain competitive by interacting with customers in an effective manner.
In the words of Tukker et al. (2017), organisations need to develop certain processes so that the weakness can be identified. In the case of Woolworths, the weakness that has identified of the company is the fact that it does not have a stable process that can be used for the entire organisation. Hence, this one area needs to be addressed by the company without making rapid changes. As such, the managers need to address the changes that are required to be implemented in the organisation by implementing the innovative framework in the organisation.
Conclusion
Therefore, it can be said that innovation is one of the essential factors for an organisation and a competitive advantage can be attained if an organisation can maintain the innovative tactics in a proper manner. Woolworths need to manage the issues that exist in the organisation so that it can become the top organisation in the country.
References
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