CM is a technology firm that provides short message service to business organisations. It uses phones platform to deliver the intended message. The service is direct because the information reaches the target segment. The company particularly concentrates on sending messages to customers as opposed to receiving. This process is done by the use of communication protocol that sends messages to mobile phones (Burg, Reymen and Dolmans 2011).
The technology firm sends messages to large audiences. There are several platforms used to obtain customers. The firm approached night clubs and got contracted to be sending messages to its customers. The preliminary process was obtaining the contacts from the customers (Hill and Jones 1998)
There are several innovation problems experienced during the early start up stage. Innovation management is necessary to control the starting process. To understand the causes of innovation challenges, there is a need to concentrate on innovation mix. First is product development. There is a need to develop a cutting edge technology product which is more appealing to customers. This can be achieved through product differentiation.
Real innovation is witnessed when the product obtains a commanding market share. In the light of this, it is imperative to develop proper ways of differentiating the service so as to fend off competition. This involves faster service delivery and meeting the clients’ and customers’ demand. Another step is providing service round the clock and building an innovation culture. All the members of the organisation should be involved in the technological innovation through avenues like brainstorming sessions. The organisation also requires clear job design to ensure smooth running of the service (Hill and Jones 1998).
The case company made big steps in product development. It was able to clearly identify the mobile phones opportunity in the country. However, there were several innovation problems experienced. The use of mobile phones at that period of business startup was still low and they would have been better off building a more welcomed platform (Burg, Reymen and Dolmans 2011).
The other innovation factor is process. Getting the process right is inevitable for efficient service delivery. Short message texting business requires concise steps. One is approaching clients and their customers. It is also ideal to have a message sending protocol ready for the service. After acquiring client’s contacts, the other task is collecting their customers’ contacts. The problem experienced in the case study was obtaining contacts from the customers. Not all night club customers were willing to give out their contacts. The company went ahead and hired beautiful ladies to entice them to give out their contacts. This means extra cost was incurred (Burg, Reymen and Dolmans 2011).
The other aspect is positioning the product. This has an effect on innovation. Since it is psychological, it impacts on the customers’ perception about the service. The best perception that technology firm of this kind should build is make their clients believe and perceive their service positively. Customers, employees and business partners should be able to have positive perception of the firm. This includes factors like faster serve delivery, prompt payment of executed contracts and employees’ positive perception. This built a good customer base improving the company’s profitability. Positioning therefore has an impact on innovation.
The company in the case study earlier experienced difficulties in positioning its services. The nightclub owners were initially unwilling to offer business opportunities to the two owners because their business was not yet well established. Another impediment is the regulations from the government. This required the individual companies to limit the scope of customers especially age wise (Burg, Reymen and Dolmans 2011).
The last factor on innovation is paradigm. This refers to the way of execution of activities and functions in an organisation. It requires the adoption of radical measures that help to bring improvement in meeting market and customer demands. This technology service needs constant paradigm shift to enhance performance. This calls for improved system software for efficient message delivery. The company in the case study faced several problems while diversifying and venturing into wide markets. The company stacked to bulk message business because venturing into premium messaging required large initial capital. Established companies were however making good money from the service (Hill and Jones 1998).
For a technology based business firm to advance and improve its profitability, its management must make well informed decisions that improve the performance of the business (Barney and Hesterly 2005). There are many ways a company can focus on to achieve this. First is to concentrate on framework which includes value, rarity, imitation and organisation. The value of the firm should be big enough to take advantage of market opportunities.
It should also provide immunity against threats like competition. The resource base of the organisation should be the main reference and decision making point. The firm should resort to keeping an open eye on availability of substitutes, population, technological changes, the prevailing economic conditions and culture of the users. The value of the firm in the case study was limited by finances and therefore it could not initially expand to international status. Furthermore, venturing into expanded local markets was hard during its infancy period. The resources of a firm should therefore be able to match its value chain (Burg, Reymen and Dolmans 2011).
Another factor which is inevitable is the company’s rarity. The firm should arrange its resources so that it is unique when compared to its competitors. This was seen in the case study where the company was better positioned through offering bulk text messages at a low price. This helped to fend off competition even from veteran firms while at the same time providing a good profit margin. Another framework is company’s ease of being imitated. The technology and resource use of the business should be unique and peculiar such that it is hard to be replicated by competitors. This ensures that the firm is competitive in the market. Lastly are the company’s capabilities and resources.
Upon identifying the capabilities and resources, there should be proper organisation of the same (Burg, Reymen and Dolmans 2011). This means that resources and service delivery process should be properly arranged. The delivery of messages to customers should be timely. It should also be drafted in a manner that easily relays information to target customers without difficulty in interpretation. When this is perfectly done, the company is able to reduce competition. This decision is handy and should therefore be approached carefully (Barney and Hesterly 2010).
Individual firms therefore have a wide range of options to exploit. This includes venturing into less ventured markets, differentiating their services, merging, selling of shares and acquiring financial help to boost their service delivery. Technology firms interested in profitability should not think twice about leveraging this (Barney 1991).
Barney, B & Hesterly, S 2010, VRIO: framework in strategic management and competitive advantage, Pearson, New Jersey.
Barney, B & Hesterly, S 2005, Strategic Management and Competitive Advantage: concepts, Pearson, New Jersey.
Barney, B 1991, “Firm resources and sustained competitive advantage”, Journal of Management, vol.19, pp. 99-120.
Burg, E, Reymen, I & Dolman, S 2011, Becoming a Technology Firm, Eindhoven University, Eindhoven.
Hill, L & Jones, R 1998, Strategic Management Theory, An Integrated Approach 4th edn., Houghton Mifflin, Boston.