Managing Entrepreneurship and Innovation
Managing Entrepreneurship and Innovation
In a crisis, businesses are affected since movements are restricted, and contact with people is also affected. However, with a company that has embraced E-Commerce, its operations will keep running online. For example, a retail business dealing in groceries, food and household products could apply e-commerce to ensure a complete supply chain even with the existence of a crisis. This is through the creation of an online platform where products are displayed, and consumers make their orders, use online payments and the products are delivered to their doorsteps or destination of choice.
In a time of a crisis, people reduce their movements to stores to purchase groceries and foodstuffs. At this time, the retail shops lack consumers visiting the shops, hence have reduced sales relating to low profits or no profits at all. The problem at hand is making products available for consumers due to the restricted movements caused by a crisis. Hence having an existing e-commerce platform becomes an excellent opportunity for the business to strive. Consumers will be getting products through online platforms, and the company will continue irrespective of the effects of the crisis. Also, with increasing competitors in the market, e-commerce is an opportunity at the moment since consumers will be attracted to faster buying procedures and simplified selection of products without any movements. Even though the crisis affects most business operations, it becomes an opportunity for the retail business to increase its consumer base and make more sales compared to the organizations relying on customer contact.
Most grocery products are perishable and need to be sold fast to consumers. The longer they stay in the retail shops, the higher the wastage rate. Groceries include cereals, meat and fish, and farm produce such as fruits, vegetables and tomatoes. Therefore, online entrepreneurship using e-commerce solves the problem of low sales due to a crisis, by making the products available to consumers. The products are acquired from farmers and industries, and the consumers are made aware of the availability of the product in their stores. The customers only have to visit the online sales platforms, identify the products they need from the stores and make an order. After ordering, payment is made online either before or after delivery of the products. This method provides an opportunity to make more sales and serve more consumers more than before the crisis. The opportunity occurs since people will be attracted to the organization making goods available for them hence choose the e-commerce retail shop. Value is the benefit received by the consumer after receiving the product. Value is created by minimizing the acquisition cost of the product, providing one-click delivery and saving time for ordering and purchasing. The unique selling proposition Is convenient and effective buying.
The direct to consumer model connects a large consumer base through one platform. This model makes it easy for consumers to know the available products and make purchases hence allowing the business to meet demands more efficiently. Also, consumption of groceries is high; thus, the purchasing frequency rate also rises. It shows that consumers will keep purchasing the products at any time. The model is beneficial as it is available every day, at any time. The accessibility to search for products online ease the customer search jobs, which increases their purchase frequencies. The e-commerce for the retail products displays the products in one unlimited self, which provides access to potential customers and covering a wide market range. Also, ordering is done with one click, which allows the purchase of a variety of products, including different types of groceries and household products.
The value provided by the retail business through online sales is an advantage to the consumers and over the competitors. E-Commerce allows the company to provide information on the value that will be received from purchasing products through the platform. This model makes it excite for consumers, unlike for the competitors in the same industry, who require customers to buy the products from their stores physically. Direct delivery to consumers saves some costs that the consumers could have incurred when purchasing hence prefer the online purchase rather than the physical acquisition of the products. The supply chain of a product is of interest to the consumers. Since the E-commerce platform provides information on the source of the products, consumers are more confident to purchase, due to the guaranteed safe products.
In times of crisis, established incumbents’ strategies are profoundly affected because the economic status decrease and most of the operations of the company are affected. Startups indeed have an advantage over the incumbents because the business is set up using the current conditions of the market. Startups are organizations grown from a zero base. It means it has created product design and tested it in the market affected by the crisis. Hence as it operates during the time of crisis, its strategies focus on the current condition of the market.
The value proposition of an organization focuses on customer problems and needs, as well as the products and services offered. For incumbents, the value proposition had been developed before the occurrence of the crisis; therefore, the changes that occur in the economy due to the crisis profoundly affect them. Agile development also affects the incumbent and startups. Business agility allows a company to adapt to market changes that occur. For startups, it is easier to follow through the process of agility hence quickly adapt to any crises that occur. For example, Kodak was an exiting company for photography. As technological developments kept improving, digital phones emerged, thus affecting the operationality of the company. Lack of agility caused the company’s downfall.
Covid-19 has affected operations of businesses, primarily through the lockdowns and travel bans. Large corporations require developed supply chain which enhance the movement of products and services from the producers to consumers. Therefore covid-19 has paralyzed the flows of goods which ha led to decreased production and purchases. Corporations also have an extensive human resource to facilitate the production and distribution of products. Due to low income, there have been high turnover rates in corporations. This fact is because of the lack of revenue from the organizations to pay for staff salaries. Also, the demand for products and services has decreased, leading to lower production in corporations.
Businesses have had to rebalance risk and liquidity, to identify more opportunities for growth even at the decreasing economic growth. Strategies such as using online platforms for sales is now being embraced by the corporation. For example, a corporation’s websites are being used to provide information about the products and services of the organization, as well as a method for selling online. This activity is supported by the delivery of the products to preferred places. Also, changes have been made on the strategic techniques of businesses to strategize moves and create new futures for the product. The actions aim at ensuring that companies survive in the market and is not profoundly affected by the financial crisis caused by the pandemic.
The ambidextrous organization is a firm that has combined both the exploration and exploitation motives, to become more agile and adapt to the changing environment. It aims at increasing innovation strategies to make the organization have an advantage over its competitors. It also facilitates the acquisition of new ideas, technological developments, new markets and firm’s policies to ensure sustainability. The organization focuses on both the demand and products of the firm. In the current market, the firm optimizes by improving the existing products in the market. In an existing market, new products are developed, and in new markets, new technological developments are created. It explores the market to find new opportunities, which provide a framework to exploit resources.
In creating an ambidextrous organization, the focus should be on the availability of resources during the crisis time. Since the organization focuses on both exploiting capabilities and finding new opportunities, identification of the critical tasks and culture is appropriate in building a strategic organization. Due to the unrest caused in times of crisis, sequential ambidexterity is most suitable for the organization to engage in periods of exploration first, then followed by exploitation. This sequence is because there may be limited resources as caused by the crisis. Exploration first allows the identification of opportunities, which will then lead to exploitation. Therefore, the company innovates, adapt to structures, take risks and experiment, before panning for productivity and profits.
Blue and red ocean concept were developed by Kim and Mauborgne, to find ideas to break free. Blue ocean strategy is a concept involving the identification of a place to offer new business models and new products and service instead of using the same existing ideas. It allows the creation of non-competing product hence making competition unnecessary in the market. The strategy creates and captures new demand and breaks the value through the application of differentiation and low-cost strategies. The concept ensures that a firm exists in business independently and does not experience any threats from existing or new entrants providing the same product.
On the other hand, the red ocean strategy involves imitating or using the existing business models and plans for the creation of product and service. Therefore, many firms in the same industry are producing the same product using the same techniques. In this strategy, there is high competition, and firms exploit existing demand for the products. Also, the firms develop strategic choice for differentiation, to contrast their products with those of the competitors. There is a low rate of sustainability and existence in the blue ocean since any company which differentiates its products well gains more consumers hence dominate the market.
The value curve is a concept developed for the blue ocean to visualize the effectiveness of a firm’s strategy in the market. It is within the strategy canvas, which determines the principles to be used in a particular market. It is a graphical representation of strategies employees by a company, showing the relative performance of a company within an industry. The strategy eliminates competition as it defines the position of a company within a particular time as well as the competitive factors that make a company unique. The curve optimizes three characteristics of the blue oceans, including high offering rates, the divergent shape of the value curve as compared to those of competitors and a tagline representing new factors created.
For example, using an example of the short-haul airline industry, south-west airline graph differs from the other airlines. It means that the company has unique factors of competition and high offering levels that cannot be imitated by the competitors.
18764252798446Factors of Competition
00Factors of Competition
The Southwest curve varies from the other airlines’ curve hence challenging to compete with them. Other airlines can try raising the offering of some of the factors, but the Southwest airline factors offering are distributed unevenly, making it difficult to imitate.
Mass collaboration is where organizations open up to external parties to find new ideas to develop their human resource and intellectual property. Mass collaboration is made possible through open innovation where organizations establish a more open and collaborative network-based approach to change. It is considered a step to generate innovations because it allows tapping of ideas and knowledge, resources and expertise and collaborates with the external parties to innovate and develop new ways that will help in achieving own objectives.
For example, the Samsung company collaborates with external parties through partnerships, acquisitions, ventures and accelerators. Through the acquisition of Smartthings company, Samsung aims to achieve the objective of creating new experiences n internet of things for home use. This is because Smartthings company has developed its innovations that were unique to Samsung hence collaborating with them promotes the change to create a new product or service.
However, open innovation may decrease healthy competitions in the market. This fact is because new companies will be emerging, but the existing ones collaborate with them ether through acquisition or partnering with them hence decreasing the competitiveness in the market. Using the Samsung example, Smartthings company had a competitive advantage over Samsung, but after collaboration, it loses its strength due to revealing of its intellectual property.
Crowdsourcing is the ability of organizations and individual to access global knowledge and information from various sources to help in boosting their innovation processes. It covers four areas, collaboration, funding, voting and development. In all areas, there in sharing of information and opinions under specific rules of the different organizations. Crowdsourcing encourages creativity as it taps into the crowd’s intelligence hence develop innovation strategies. It also speeds up project timelines due to accessibility of information from different organizations and social networks. For example, Wikipedia has existed in providing knowledge after collaboration with various companies and institutions. Organizations rely on the provided information for their operations.
Corporate venturing is the process where a corporate enters into a joint venture arrangement with another company to increase innovation output within an organization through capital methods and technological assets. It helps in commercializing new technology, products and services, and business models in a fast and effective way compared to when done by an individual organization. It helps to leverage new ideas and increase innovation methods hence leading to a developed market. A company engaging in corporate venturing expects to receive fund management incentives such as corporate salaries and bonus structures. It also adds value to a company through business networks and fund management experience.
Design thinking is the methods and processes required to investigate problems, acquire information and analyze the knowledge o find solutions to the issues. A good problem statement requires to have gone through the process of design thinking, including empathy, defining, ideating, prototyping and testing. Empathy involves the questioning to understand aspects of particular knowledge, after which the needs of people are considered. After defining the problem based on peoples needs, an idea is brainstormed to solve the problem. It is then conveyed through prototyping and later tested to find feedback from the prototyping. Virtual campuses provide content of learning materials and simplify communications between participants.
However, the users experience problems such as less available content in the virtual system. The content provided in the system is limited as compared to the library, where there are a variety of books and materials that enhances researching. Also, technical difficulties occur, such as requiring high-speed internet connection or challenges of sound and vision. These problems affect students’ experiences in navigating through the online platforms hence create barriers to successful accomplishments and understanding of the course. Design thinking helps to find solutions to the problems through the provision of links to online resources and designing a virtual system that is easy to connect to and navigate.
Design thinking involves understanding, creating and delivering ideas to improve the experiences of people affected with the problems. Understanding the issues requires empathy and defining the problem. Through empathy, the students using virtual learning are strictly observed, hence identifying the challenges they go through. The students are then incorporated to describing the challenges to increase the understanding of the problem. In creation, the first component is ideating, which is the involvement of the students in brainstorming to find solutions. Then prototype the technical challenges of failure of sound and visual, in this stage, solutions such as improving internet connections, providing means for more materials. Provision of reliable internet will solve communication problems as well as prevent the technical issues that affect the students.
In the process of design thinking involving the students to brainstorm on the possible solutions provide a range of factors that can be implemented to solve the challenges. The online library is a factor that can help solve the problem of getting materials. Therefore, this is possible through the university having an existing online library, through which it can include in the virtual university learning platform. Also, the university requires to provide the online courses that do not require a lot of internal memory or a high-speed internet connection to increase the speed of navigation.
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