BANG & OLUFSEN DESIGN DRIVEN INNOVATION Case Study Solution
Business Introduction
Bang& Olufsen is a high-end audio video manufacturing company, which is based in Denmark. The company has maintained its tradition of creating the first and the best styles of the products, over its past 80 years of history in this business. The target customers of the company have been the fashion connoisseurs and it has been selling its wide range of products, through its 1500 stores in Denmark and UK, which are the largest markets of the company. Bang & Olufsen has also won a global acclaim of the product development and innovation(Austin, 2007).
The company functions in very niche markets and it has collaborated with some other giants like Samsung Electronics. The future of the company however, might not see the same growth, which it has experienced in the past, since 2004 as the uncertainty faced by the company has increased. It isbecause of the management problems, economic crisis, competition and higher costs(Austin, 2007). This paper attempts to perform the inside out analysis related to the structure of Bang & Olufsen, regarding its innovation strategy and addressing all other issues regarding the uncertainty of the company’s future.
We will be performing a critical review of the existing design structures of Bang & Olufsen, by making use of the relevant theories and models pertaining to innovation management. Furthermore, we also identify some of the options, through which Bang & Olufsen can create a balance between incremental and radical innovation. In the end of the paper, we also discuss the option of market research and importance of consumers in innovation, which can be a possible area for future exploration for Bang & Olufsen.
Objectives
Innovation is a structured management task and it must be integrated within the organizational structure for achieving sustainable growth. The objectives of the innovation strategy of Bang & Olufsen, from the management consultancy’s point of view are based on the seven rules of innovation(Davila, 2006). These can be considered as the scope of the innovation strategy of Bang & Olufsen also. These seven rules of innovation are listed below:
- Integration of innovation into the basic business mentality of Bang & Olufsen.
- Exerting strong leadership on portfolio decisions and innovation strategy of the firm.
- Aligning the type and amount of the innovation, within the business of Bang & Olufsen.
- Neutralizing the organizational antibodies.
- Managing the natural tension between value creation and creativity.
- Creating the right rewards and the right set of metrics for innovation management.
- Recognizing the fact that the basic and fundamental unit of innovation strategy.Is to form a network of people & knowledge from outside and inside the organization.
If we analyze the case, then it can be said that, the management of Bang & Olufsen has failed to achieve the above seven objectives.It does not satisfy the seven rules as we will discuss in the next sections.
Analysis of Client Business
Stakeholders & Culture
There are two important types of stakeholders that have a very strong connection, with the need and scope of the organization’s innovation strategy. The management of Bang & Olufsen is highly influenced by the designers, and the perceptions of the designs regarding innovation. These designers have been enjoying a veto within the product development model ,also the management is forced to do what the designers want them to do.
This is one of the key issues of the management of Bang & Olufsen, because they have to continue working in this manner as the designers want. This is also the reason, due to which the scope of the company is limited, and it has not been able to achieve its objectives of seven rules of innovation(Austin, 2007). The management of Bang & Olufsen needs to be in a much more strong position, to exert influence and control over all the innovation related matters of the company. The most important issues at this point of time are the slow product development, extended lead times and product portfolio management.
The second important group of the stakeholders, is the consumers of the company. It is highly important for the organization to understand the needs of radical innovation for its users especially, within the high technology industry in which Bang & Olufsen has been operating, since its inception(Austin, 2007). The company’s users and the end customers are one of the most influential stakeholders for the company.That can only help in the achievement of the radical innovation at Bang & Olufsen. This would fulfill the scope of the innovation strategy of the company,and help it in achieving the seven rules of innovation as specified above.
BANG & OLUFSEN DESIGN DRIVEN INNOVATION Harvard Case Solution & Analysis
Achievement of Goals and Innovation Model
The goal of the company and its mission is to be an innovative company, which works based on radical innovation for developing new products. However, the company has failed to meet this need, as there is a clear misalignment between the existing business model of the company and the type of the innovation that is followed by Bang & Olufsen. All the leaders and the upper management of the company believe that, the organization is on the right track to achieve its objectives for radical innovation, by adopting a design driven innovation policy. However, if we look at the innovation matrix in figure 1, then it is clear that Bang & Olufsen has achieved semi radical form of innovation & not complete radical innovation, as stated by the designers and the company..............
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