Wednesday, December 4, 2013

“Tilting” competitive advantage

In the book Tilt: Shifting your strategy from products to customers, author Niraj Dawar, a professor at Ivey Business School, argues that conventional wisdom says that competitive advantage resides in products and their innovation. However, in today’s times the competitive advantage is increasingly “tilting” towards downstream activities that are aimed at reducing customers’ costs and risks. On the other hand, the traditional upstream activities like sourcing, production, logistics are increasingly being commoditized or being outsourced. Author proposes that to compete effective companies need to shift their strategic focus and emphasize on how they define their competitive set, influence customer’s activities, innovate to solve customer problems and build advantage by harnessing networks that address these issues.

The idea is that the center of gravity in business is shifting from the products to the needs of the customer. Therefore, strategic question for driving businesses is not “what else can we make?” but “what else can we do for our customers?” the author emphasizes this point by using the classic thought experiment in branding. It is to ask what would happen to Coca-Cola’s ability to raise financing and restart operations if all of its physical assets around the world were to mysteriously go up in flames. The most common answer is that Coca-Cola would have little difficulty finding the funds to get back on its feet. The company would survive such a crisis because the value of its brand would attract investors looking for future returns.

On the other hand, asking what would happen if instead of the loss of the physical assets, seven billion consumers around the world were to wake up one morning with partial amnesia and could not remember the brand name Coca-Cola or any of its associations. In this latter scenario, despite Coca-Cola’s physical assets remaining intact, most reasonable business people agree that the company would find it difficult to attract significant further investment. The loss of the downstream asset, the brand or indirectly the customer, is a more severe blow to the company’s ability to continue business than the loss of upstream assets.

In order to define the strategy focused on downstream activities managers need to focus on three major tasks. First is shaping customer perception. Firms need to understand that they have the power to change customers’ purchase criteria. When Steve Jobs was asked about market research that was done for iPad, he replied “None. It’s not the job of customer to know what they want.” It might be cliché but building trust and brand loyalty is important. It is getting even more relevant as companies begin to compete for a very small slice of space in consumers’ minds.

Second is innovation. Companies have traditionally invested in innovating products and setting up R&D labs. However, in this tilting situation innovation is more important in terms of how service is provided and how consumer’s costs and risks can be reduced. Hyundai innovated an excellent sales model during the 2008-09 recession. Auto sales tanked, and companies were struggling. Hyundai, instead of lowering their prices, asked the consumers why they are not buying cars. Hyundai found that the risk of buying a car is too high given the uncertainty in jobs. Hyundai innovated a Hyundai Assurance Program where if people who bought cars lose their job or income within one year of buying the car, they can return it with no penalty to their credit rating. At the time when industry sales declined 37%, Hyundai doubled it sales.

Third is to build accumulative advantage. When competitive advantage lies in products, it is lost over time as competitors catch up. However, when competitive advantage lies in downstream activities it grows as the number of consumers served grows. Companies that gain competitive advantage in downstream activities do so by creating barriers for consumers to switch platforms. Facebook has created and harnessed a network of consumers. It has services like time lines, photo sharing, games, and apps. These services make sure that users stay on Facebook and the more users stay on Facebook, the more likely their friends will stay on Facebook.

Author argues that this “downstream tilt” is relevant to three types of companies: those in product-based industries like pharma, those in maturing industries, and those seeking to move up in the value chain. Developing downstream competitive advantage will allow companies to create unique differentiation for themselves, and this is something that can be nurtured and accumulated over time.





References:
  • Tilt: Shifting Your Strategy from Products to Customers, Niraj Dawar, HBR Press 2013
  • When Marketing is Strategy, Niraj Dawar. HBR December 2013

Investment Risk Management - BCG Framework

Investment Risk Management Using BCG Matrix

By Teja Setty (Andrew Id: VTS)

Risk management and intelligent investment decisions determines the success of most companies. One of the most popular frameworks to make investment decisions by large corporations is the BCG matrix. The framework details how a company should position itself to ensure long term longevity and also growth.

Also based on my experience during the simulation, it is a great strategy to ensure that you make sure that you are competitive in the market with your Cash cows which provide you with continuous revenues which are essential for all other types of projects. 

Any products which have the potential to give you a large market share and require high investment should be carefully evaluated and most such opportunities should be pursued to try and create the next cash cow.

The question marks are projects that require high investment and give low market share and should only be taken up if  they have a great potential uses.

Low cash generation and low growth projects should be liquidated. 

The primary lesson to be learned is that not all projects are the same and will generate the same profits, and that carefully choosing and investing in them will decide the future of the company.

Would it be fair to say that with the Cash cows and and dogs we are operating in the red ocean space, and with the stars we are trying to create a blue ocean for the organization?







Big Bang Disruption

Evidently, in the tech industry new improvements in technology change the game, so to speak.  As a result, prices and costs are driven down over time.  New products enter the market that are both superior and cheaper.  Hence, there are new markets, and even products lines being destroyed or created overnight.

Innovators are breaking the rules.  It was axiomatic for organizations to pursue one strategic discipline at a time (low cost, innovator, or customer centric).  With new information technologies innovators are capable of all three at low costs.



The fact remains disruptive innovators, in some cases, have the advantage in cost structure relative to a larger competitors.  Innovators can rapidly secure market share with superior quality, and tech savvy. 

Moreover, disruptive innovators have access to near perfect market information, and for this reason, are well poised to exploit advantages in technology.   These innovators are creating new markets, and thus leaving behind competitors using traditional models like for instance Amazon.com vs. Big Box retailers.

At any rate, this phenomenon is interesting in the context of competition and strategy development for Fortune 1000 corporations against rising challengers in startups companies using disruptive technology. 

Source:

http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-big-bang-disruption-innovators-disaster.aspx

 http://www.accenture.com/us-en/technology/technology-labs/Pages/insight-technology-vision-2013.aspx
Green Mountain Coffee: Roasted by Competition[1]
Green Mountain Coffee Roasters, Inc took advantage of blue ocean strategy by expanding the coffee market with the introduction of the Keurig. However, recently Green Mountain Coffee has experienced plummeting stock prices and a less than idea market position. This is due, at least in part, to a poor corporate strategy and flawed demand forecasts.

Many individuals thought that the Keurig would remain on top for several years. Green Mountain still has the brewer patented and makes high profit margins on each K-cup. Furthermore, there are few competitors in the space. These factors led Green Mountain executives to think that they had cornered the K-cup segment of the coffee market. At the time of Keurig’s invention there were no competitors in the space and a high demand for on-the-spot coffee. However, recent projections of demand have been significantly higher than actual demand which has led to financial woes. One analyst notes that he has recently seen expired K-cups on Amazon, a sign that inventory is unsustainably high. To add insult to injury, Green Mountain will soon lose its patent protection of K-cups.[2] This means that the blue ocean that Green Mountain dominated a few years ago will quickly turn red.  Furthermore, Starbucks has just announced a new product, the Verismo, which will introduce direct competition.













Green Mountain Roasters has yet to fail. However, they are well on their way if they continue down their most recent trajectory. Will they take heed of the advice provided in Why Good Companies Fail to Thrive in Fast-Moving Industries, before it is too late? What can Keurig change with regards to its corporate strategy to ensure that they remain on top of the K-cup industry?

[2] Ibid.

Understanding Your Company's Strategy and Empowering Employees to Make Decisions

The Can You Say What Your Strategy Is and Simple Rules for a Complex World readings allowed me to gain a greater understanding of my recent summer internship where I worked within Corporate Strategy. Prior to my internship experience, I perceived strategy, vision, mission, and value statements on company websites to be nothing more than shared platitudes. After having the opportunity to work in a Fortune 500, I realized that these pithy statements do have great meaning and consequences in the decision-making process. I would like to share my experience. 

Mylan is a generic drug company located about 30 minutes west of Pittsburgh, PA. It is the 2nd largest generic drug supplier in the U.S. Its mission is to provide the 7B people in the world access to life-saving drugs. How does this global breadth from a generic drug company translate to its tangibles? Mylan has a robust infectious disease medication portfolio. Every year it invests heavily in its production/manufacturing in order to drive prices down and to scale to the need of 3rd world countries. One of the key values in Mylan is integrity. Integrity is specifically relevant to Mylan because counterfeit medicine prevalence is very high globally and subsidies from non-profits are a significant revenue to make infectious disease drugs affordable. 

During my internship, Mylan was undergoing a vision change from a generic drug company (an unknown company to many consumers) to a health company. The strategy was to implement an aggressive brand strategy to gain greater recognition. Mylan changed all its pill bottles to a distinct blue tone with a recognizable marker so pharmacists know exactly which meds are the high-quality, affordable Mylan products. Mylan grew its Public Policy division (located in DC) to target education boards in key states so its staple Epi-Pen product (for allergies) can be provided and available in every public school system. All the intern teams were strongly encouraged to think of new initiatives to increase Mylan's reach to the global population in a recognizable way. For example, giving out free HIV diagnostic tests was approved in certain developing nations to drive up the demand for Mylan's HIV drugs. We were told that it doesn't matter if the initiative was not profitable - the benchmark was set at break-even. 

The "simple rules" for the interns were innovation, collaboration, and a greater social good. As long as we can justify the ideas within these 3 areas, it was incorporated into the recommendations. It was through this experience that I saw how a developing strategy move from the abstract to actionable tasks. 

Lessons from IBM and Google

Organizations need to change and adapt in order to survive for a long time. The NYT article “Lessons in Longevity, from IBM” talks about how the technology company has survived over a century and has been able to do so because it adapted from a hardware company to a software and services company. Below are a few examples of other companies that changed their strategy and business model, and a few who didn’t.

Companies that changed:
  • Netflix: Moved from its DVD rental model to an online streaming model, which has turned out to be extremely successful and profitable.
  • Yahoo: Founded in 1994, it adapted its business model from search to content and advertising, and still manages to remain one of the most visited sites in the US.
  • BitTorrent: After a number of copyright and other legal troubles, most of the P2P platforms went out of business, but BitTorrent changed their model and started providing services to companies who required mass distribution of legitimate software like Microsoft Windows updates or patches for games.

Companies that failed:
  • Research in Motion: RIM’s Blackberry was one of the most dominant smartphones but lost huge market share to iPhone and Android when it slowed product innovation.
  • Nokia: Again, Nokia was one of the most popular cell phone companies but they failed to innovate and were then bought out by Microsoft.
  • Barnes & Noble: Barnes & Nobles failed to adapt to changing customer needs and sentiments and lost a huge proportion of sales to Amazon, and other online book retailers.

In the NYT article, the author Steve Lohr compares IBM with companies like Google, Microsoft and Apple. He makes an interesting note about Google: “The assets most prized at the company are brains and data.” To me, that is the key. Along with intelligent people, Google mines such a large amount of data and uses advanced artificial-intelligence techniques to make sense of it all. This places it in a position where it can predict the trends in the near and not-so-near future, and make informed business decisions. These are evident from its early adoption and innovation in mobile technologies like Android and Google Glass. Companies should take a cue and understand the pivotal role “intelligent searching, discovering and sharing of information” has played in making Google successful.

Companies can use data to suggest what new products, services or markets should be launched or entered. It can be used to easily run trials with a small number of products or some other metrics in a limited scope, for little cost and at low risk. It can be used on feedback from customers, vendors, or employees to find trends which may not be obvious. Intelligent use of data can help organizations make major changes with little risk.


The Shinese Factor of Longevity


When reading the IBM article about longetivity, it struck me how a 100 years, is considered a really long time for a company to last. Because when I think of the oldest companies in India, my mind immediately jumps to companies founded during the British rule - book stores like Higginbotham's that has been running in pretty much the same way since the early 1800s. So I wondered how being a 100 years old is a big deal? But a little more research led to to some statistics that showed the proportion of companies that last only for a short period of time:
- One-third of the firms in the Fortune 500 in 1970 no longer existed in 1983. [1]
- Big names such as Microsoft was not born till 1975
- Walmart,one of the biggest companies, was founded in 1962

And this also led me to these statistics about the oldest companies in the world:
- Among the companies that were more than 100 years old, 89.4% of them employed less than 300 people.
- Among the companies that are more than 200 years old, 56.13% are Japanese companies [2]

So does this mean that its easier for companies to have a long life if its size is small?
Also what is it about Japanese companies that make them survive many different situations - be it the world wars or industry revolutions - and continue to survive?

In the "Lessons in Longevity from IBM" they have one central message - to build on your past. And the Japanese companies in the aforementioned list - Kongo Gumi, Hoshi Ryokan etc. are all hotels. So they can benefit from building on their past - literally as well as knowledge wise. And another industry that features often in this list is the brewing industry. One thing that is common in both these industries - hotels and brewing - is that nothing has changed majorly in either of them, and they continue to survive over the years - building on their past.
The Japanese companies credit their longevity to having an adopted son-in-law that can carry on the company over the years. They have a term for this - Shinese.
In the international business and economics Research Journal of 2008 [3], the researchers compared Us and Japanese companies that are older than 100 years to see what are the common characteristics that made them survive for so many years. It can be summarized as:
1. Clarity and continuity of corporate culture and values
2. Learning systems built on relationships
3. The ability to balance tradition and innovation through gradual change
And in the first point Japanese companies prefer to keep the business within the family and claim that that is the reason for their long existence.

These three guidelines, in my opinion, expand upon the IBM thumb rules for longevity.

So, with all these companies that have been in existence for more than 100 years, be it a hotel or a brewery, they can survive for many years by following these guidelines. But what do they do when the industry as a whole is in danger? What do hotels do if something like airbnb becomes mainstream? What can breweries do if they keep building on their knowledge and have a clear company cultural values, if the industry for brewed drinks is becoming obsolete, or if there is no demand in the future with everyone moving to a more health conscious drink?

While the strategies mentioned before and in the IBM article apply to maintain the existing state of companies, it still wouldn't work in situations where the industry that these companies operate in disappear.

References:
http://www.siliconindia.com/news/business/5-of-the-worlds-oldest-companies-nid-125657-cid-3.html
http://en.wikipedia.org/wiki/List_of_oldest_companies
journals.cluteonline.com/index.php/IBER/article/download/3211/3259

Lessons to survive by smaller firms

The theme for this week was why companies cannot stay on top all the time. We saw examples of big organizations like IBM and Microsoft that have survived through a lot of ups and downs; they constantly evolved and moved to different areas to keep their stronghold. Let us see smaller companies that have also followed this principle and as a result survived through the years.

Sentinel Printing: This printing firm has been in the industry for 150 years. It started off as a small news printing firm in the barn and now has evolved to digital printing. It constantly evolved and innovated while staying focused on its core strength. "If we didn't evolve ... we probably would have been out of business," President. Sentinel caters to all kinds of clients, local dentists to big printing firms. Another lesson to be learnt is that it did not restrict itself to a certain type of clients.[1]

Bavarian Inn: Started in 1888, Bavarian inn is a family owned inn that still attracts a lot of customers. The reason it has lasted so long is because it has been innovating constantly. "You just got to keep trying things and seeing what works and maybe not spend too much money on it initially," Owner of Bavarian inn. Also, Bavarian inn was aware of what its customers wanted. It kept up with the market demands, for instance it just installed a water park that attracts a lot of customers.[1]

Pete and Gerry's organics: Started after world war 2 , this egg farm has grown over the years. It went through a lot of transformations. They shifted their customers from small industries to larger chains. They differentiated themselves by not caging any chickens, which was the trend during the time of its inception. They have adopted technology to spread awareness about their company.[1] 


Lessons to be learnt from these firms:
1.     Keep evolving and innovating.
2.     Be aware of the market demands.
3.     Focus on your core strengths.

These three simple principles have allowed these firms to survive for more than a 100 years, and bigger companies have also followed these rules. 

REFERENCES:
http://www.thestreet.com/story/11969325/2/5-businesses-that-have-survived-50-years.html


Trade-Offs



To employ strategy, organizations need not only to have one, but must also be run by individuals who know what that strategy is. Thus, to communicate strategy well requires a succinct strategy statement. Mike Rukstad identified that sound strategy statements are comprised of three elements: objective, scope, and advantage, and according to his partner David Collis, believed that those three elements must be abundantly clear in order to be successful. Rukstad and Collis, like Michael Porter before them, identify that to craft a sound strategy—and moreover, to execute it—requires foregoing certain opportunities to achieve others. In other words, to succeed at something, a business must not aim to succeed at everything; it must embrace trade-offs.

The Back Bay Battery simulation prepared for this week’s class provides a prime example of the need for a clear strategy statement. Should all research areas be attempted in equal measure as the company pursues both NiMH and Ultracapacitor technology (attempting to appease all stakeholders), profits quickly dwindle. Far more successful is to identify a particular objective (Maximize cumulative profits? Increase sales in the power pack market? Grow total revenue?), define where and for whom the objective will be met (All users of rechargeable batteries? NASA? Emergency situations?), and clarify the company’s value proposition—and how Back Bay will is poised to achieve it (Deliver the fastest recharging batteries at the lowest price? Stable, high energy batteries at a higher price point?). When a specific strategy is articulated, a clear, (more) successful path is forged.

Touching base with the nonprofit sector, many arts organizations are well aware of the need for tradeoffs due to highly constrained resources. But if the tradeoffs made are led by strategic goals rather than generated by reaction is a concern, as is the approach of trying some of everything and seeing what sticks. A current example is the recent decision of the Cleveland Orchestra to pursue substantial international programming, entailing a significant increase in the amount of time spent performing abroad, as well as the amount of time spent performing outside of Ohio generally. In its seventh season of “Cleveland Orchestra Miami,” the ensemble now travels four weeks each winter to perform in its second home, where it seeks to be “a positive force in Miami’s culture life.” With a proposed increase in time spent in Europe, including a potential residency (of a yet undetermined length) in Paris, the strategic question at hand is who the orchestra seeks to serve. What is the scope of its strategy? Who is the customer and who is not? Does this signal a change away from a geographically defined customer base? Is the offering (orchestral music) the chief determinant of the strategic scope, making the aim to generate the highest quality product in whatever market demands it, location not withstanding? Or is the decision driven by survival, and not strategy, per se, at all? Sull and Eisenhardt’s “simple rules” seem also to have an important place here, providing a tool to create the crystal clear strategic statement needed for organizations of all kinds to make effective critical decisions.

Sources:

Cleveland Orchestra. “Cleveland Orchestra Miami Expands 2012-2013 Season to Four Weeks.” Press release, March 23, 2012. http://www.clevelandorchestra.com/news-and-media/news-releases/2012/Mar-23-Miami.aspx

Collis, David and Mike Rukstad. “Can You Say What Your Strategy Is?” Harvard Business Review, April 2008.

Lewis, Zachary. “Cleveland Orchestra Poised to Create and Appease a Stronger Base in Europe.” The Plain Dealer, November 27, 2013. http://www.cleveland.com/musicdance/index.ssf/2013/11/cleveland_orchestra_poised_to.html

Porter, Michael. “What is Strategy?” Harvard Business Review, November 1996.

Shih, Willy and Clayton Christensen. “Back Bay Battery, Inc.” Harvard Business Publishing, 2012.

Sull, Donald and Kathleen Eisenhardt. “Simple Rules for a Complex World,” Harvard Business Review, September 2012.

Adaptation for survival

From common knowledge we understand that disruptive technologies initially are of poorer quality and do not have a clear potential market. Yet, the ability for companies to prepare for and maybe adopt certain disruptive technologies is key to their survival. The Article " why good companies fail to thrive in fast moving industries" explains that the same criteria that shows great management and produces profit for many large companies is and can be the reasons for its failure. the articles mentions Xerox and Sears as a case in example. 
The article explains that these companies choose to lay more emphasis on markets and products that were mature and already proving to be profitability, while ignoring the threats and trend of emerging disruptive technologies. Another example is Kodak, who owned most of the patents of digital photography (which was the disruptive technology), they chose to focus on film technology which was the industry leader, and shelf the digital photography idea. this proved to be an enormous oversight and cost Kodak major market shares and their leadership position. In contrast, IBM is another company who while in a position of leadership was faced with challenging disruptive technologies. According to the NY times article " lessons in longevity". IBM like many other industry leaders have continuously been faced with challenging disruptive technology, according to the article the key to their survival is adaptation. IBM chose to evolve beyond past success unlike Kodak and Sears, and adapt their core capabilities to the emerging disruptive technologies. they focused on what they knew best and channeled it into developing services and products.  "So, then, what broader insights are to be drawn from the I.B.M. experience?
One central message, according to industry experts, is this: Don’t walk away from your past. Build on it. The crucial building blocks, they say, are skills, technology and marketing assets that can be transferred or modified to pursue new opportunities. Those are a company’s core assets, they say, far more so than any particular product or service. In I.B.M.’s case, the prime assets included strong, long-term customer relationships, deep scientific and research capabilities and an unmatched breadth of technical skills in hardware, software and services."
this ability to focus of core competences and channel them into emerging markets and technologies is key in sustaining a good company in fast moving industries. the article "lessons in longevity, from IBM" associates this with IBM success and ability to continue to grow. this posses its own question, can all companies in different industries use this approach? And since disruptive technologies typically initially are of lower quality and smaller markets are there situations where ignoring potential disruptive technology have proved to be beneficial to companies?


Reference
Clayton Christensen, excerpt from "When new Technologies cause Great firms to fail", HBS 

Apple's iPhone Strategy

If you reach into your pocket for your cell phone, chances are that it’s an iPhone.  Apple currently controls around 48% of the smart phone market.  They basically invented the modern mobile phone, as their design has become the standard look for all Internet enabled phones.  A few of us will remember cell phones before the iPhone.  Producers were experimenting with all sorts of designs, most notably Blackberry and Nokia.


Apple used a simple strategy for introducing and marketing their products.  According to Ewan Spence at Forbes.com there are nine lessons that companies can take from Apple’s recent strategy implementation.  These include:

1. Take Charge Of Your Destiny- Apply has worked to create a market for its products
2. Choose Your Strategy And Go All In- While other companies are trying to improve market share, Apple is focused on the variable costs of their headsets.  They control their supply chain and can get good profits on each of their products
3. If It Looks New, It Is New- Apples new products are hardly new.  Many of the same features and hardware is included in the latest version of the iPhone
4. Don’t Be A Makeweight, Make A Difference- When a new product is introduced, it should be a game changer
5. Tease The Latest Technology- if you have something new, market it before you release it.  This allows you to build hype and test the product
6. Delegate, Delegate, Delegate- Build a strong corporate culture and let the team do its job
7. Listen To All The Voices, Not Just The Loudest- Don’t do what the market expects all the time, and find the silent stakeholders
8. Promote Real World Issues, Not Numbers- Apple’s products focus on simplifying their users’ problems, not on being the most powerful
9. There is Nobody More Important Than The Customer- keep your consumer as your main focus.

These rules have been employed throughout the iPhone’s history.  For example, the idea that “There Is Nobody More Important Than The Customer” meant that Apple did not comprise its headset to fit the needs of the major cellphone carriers.  Instead they focused on the needs of the consumer, and as a result, their phones are more unique than any other manufacturer. 

The future of apple is still uncertain.  These rules have helped carve of a significant market share.  The “5c” was Apple’s highest grossing iPhone yet.  Its stock price is doing well, but is down from its 52 week high.  Samsung and Android are quickly rising in market share.  For now, it seems that Apple’s innovation has stalled.  Their next big product may be a “smart watch” but Samsung has beaten them to the market. 

Sources:
http://appleinsider.com/articles/13/09/09/smartphones-now-account-for-56-of-us-market-apples-iphone-at-25-share
http://www.forbes.com/sites/ewanspence/2013/09/14/nine-business-and-strategy-lessons-from-apple-and-the-iphone-5c-and-5s/2/














3 Steps To Success

Steve Jobs explained the decline of great companies as  - “The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.” [1]

In the article, “Introduction: Why good companies fail to thrive in fast-moving industries”, Clayton Christensen pointed out that large organizations fail because:
1.     They rely heavily on profitable customers and align their business operations to meet the needs of these customers.
2.     They don’t see emerging/new markets as potential growth areas.
3.     Execution is based on sound market research and good planning, which are not possible in new/emerging markets.
4.      Management follows organizational processes and makes decisions based on company values.
5.     Companies over-satisfy the needs of existing customers and in doing so, create a vacuum for the price sensitive customers.

I would like to elaborate on the measures that organization can undertake to stay atop. There are 3 measures companies can adopt to be successful in today’s fast paced business environment. [4] This blog describes these procedures and how Google implements them.

1.    Innovate Constantly: Today's business environment is very dynamic and companies need to keep innovating. This means that companies not only need to invest in research and development to come up with improved versions of the product but to identify and create needs that customers don’t know they have. [4]

Google is a prime example of a company that innovates constantly. It pioneers and releases new technologies such as Google glass, self-driving cars, real time resource sharing, Google Replay, Google TV, Priority Inbox, Street View and many more. [2] Facebook had aced social search to which Google is responding. It launched social search - a feature that allows users to search for content created by their friends, families or those in the users’ Google+ “social circles”

2.    Focus on Long Term Innovation Environment: Companies must invest in long-term projects. They must have a long-term company vision for the company and an opinion of business environments in the future. Organizations shouldn’t react to change; rather they must be prepared for it. [4]

Google’s driverless car and Google Glass are long-term projects. The driverless car project is much longer in duration as compared to projects of other automobile manufacturers. [5] The Google Moonshot Projects are also examples of longstanding projects. Andy Rubin, the leader for a moonshot robotics project, believes that his robotics project is an important project in Google's long-term, "moonshot" programs. [7] Under this project, robots will be used to perform hard, manual work.


3.    Change the Processes: The change shouldn’t be a from-to transformation; instead companies should move from being production-oriented enterprises to elastic enterprises. Elastic enterprises have repeatable and replicable processes and techniques. The core competency of such enterprises is to orchestrate business through a combination of business entities (resources such as developers, suppliers are customers) and a business platform. [3]

Google built a strong Internet search business platform and was the pioneer in providing infrastructure as a service. By reusing the its platform, Google expanded its business into other product lines. Google’s portfolio consists of products that will satisfy customer needs, help expand its brand and introduce new businesses. [6]

By implementing these steps, Google enjoys significant financial success and a dominant position in its markets. How do you think Google will innovate enterprise wealth creation in the next five years?


References:
[1] Gosal, Parneet. "The End of Disruptive Innovation at Google?" Business Insider. N.p., 10 Apr. 2012. Web. 04 Dec. 2013. <http://www.businessinsider.com/the-end-of-disruptive-innovation-at-google-2012-4>.
[2] Burnham, Kristin. "Google's Top 10 Best (and Worst) Innovations of the Year - CIO.com." CIO. N.p., n.d. Web. 04 Dec. 2013. <http://www.cio.com/article/630718/Google_s_Top_10_Best_and_Worst_Innovations_of_the_Year?page=7>.
[3] Shaughnessy, Haydn. "The Top Ten Elastic Enterprises in 2013." Elasticity Labs. N.p., 15 Oct. 2011. Web. 04 Dec. 2013. <http://www.elasticitylabs.com/the-top-ten-elastic-enterprises-in-2013/>.
[4] Shaughnessy, Haydn. "The 3 Ways Innovation Is Changing (And How To Adapt Fast)."Forbes. Forbes Magazine, 07 Feb. 2013. Web. 04 Dec. 2013. <http://www.forbes.com/sites/haydnshaughnessy/2013/02/07/the-3-ways-innovation-is-changing-and-how-to-adapt-fast/>.
[5] Shaughnessy, Haydn. "Google as a New Innovation Model (Or Not the 20% Time)."Forbes. Forbes Magazine, 07 Feb. 2013. Web. 04 Dec. 2013. <http://www.forbes.com/sites/haydnshaughnessy/2013/02/07/googles-role-as-an-innovation-model/>.
[6] Vitalari, Nicholas. "The Top Ten Elastic Enterprises in 2013." Elasticity Labs. N.p., 14 Nov. 2013. Web. 04 Dec. 2013. <http://www.elasticitylabs.com/the-top-ten-elastic-enterprises-in-2013/>.
[7] Shankland, Stephen. "Andy Rubin's next Google Moonshot Project: Robots." CNET News. CBS Interactive, 04 Dec. 2013. Web. 04 Dec. 2013. <http://news.cnet.com/8301-1023_3-57614454-93/andy-rubins-next-google-moonshot-project-robots/>.