Opportunities of innovation

Discuss About The Organisational Creativity And Innovation.

Innovation is one of the most and consistent idea that exists in the modern world. Creativity and innovation exists side by side in a market so that organisations can develop it and ensure that a competitive advantage is attained. According to Amabile and Pratt (2016), it is necessary to analyse, the opportunities that markets may gain with the application of innovation. At the same time, it is also necessary to analyse the gap that exists as the analysis of the gap can help marketers to develop a mitigation strategy based on the innovation factor. Therefore, the gaps and opportunities for providing an innovative product or service in Woolworths can be identified.

Improve in the productivity: The productivity of an organisation can improve drastically with the implementation of creativity and innovative tactics. In a company like Woolworths, the innovation can help the company to maintain its reputation in the Australia market. This can provide the company with an opportunity to continue its production and services in the business market and ensure that the people of Australia do not get to predict the products manufactured by Woolworths (Sarooghi, Libaers & Burkemper, 2015). Therefore, it is necessary for the company to continue with the innovative tactics so that it can provide continuous service to the people in Australia.

Reduced cost: One of the characteristic of the market of Australia is that it provides an opportunity for maintaining reduced costs of products. Appreciation is provided to the organisations that promote products at a reduced cost. Therefore, it is necessary that a company like Woolworths maintain the cost of the products. According to Helfat and Martin (2015), the reduced cost of products can help Woolworths gain more customers thereby an automatic increase of the revenue can be made possible. Hence, innovation can help Woolworths not only in manufacturing the products but also while adopting different strategies.

Increased competitiveness: Competition is stable in every business market and every organisation need to compete with one another to gain a competitive advantage. The competitive advantage that can be gained from innovation is that Woolworths can make the products and services unique. Therefore, it can propel the chances of Woolworths to maintain its dominance in the retail market sector of Australia. According to Anderson, Poto?nik and Zhou (2014), often it has been seen that the increased competition in the market results in the improvement of the products and services of an organisation. In the case of Woolworths, the competitiveness can help it to be more innovative in terms of products manufactured and supplied to the customers.

Productivity improvement of Woolworths

Improve recognition of the brand: The improved recognition of the brand can be done with the help of innovation and organisations can promote its products and services in a proper manner. In the case of Woolworths, the recognition of the company as a brand provides it with an advantage to remain competitive in the market. Therefore, with the introduction of a product or service, the company can try to grow beyond the borders of Australia and New Zealand (Serrat, 2017). Woolworths can promote its products in the American market and ensure that the company gain good exposure in the global market.

Competition: Innovative products may become hard to be protected from the competitors. Dawson and Andriopoulos (2014) are of the opinion that the competitors can easily replicate the innovative products. Although there are legal rules and regulations that prevent companies from doing so, the fact that it can be replicated may provide a cause of concern for the organisations. Therefore, it is necessary that Woolworths, maintain the competitive advantage that exists in the market and reduce the competition.

Uncertain returns: Innovation may not guarantee success always as the customers may prefer following the traditional products and services. Therefore, an innovative product cannot be relied upon entirely for increasing the revenue of an organisation. This may create a major problem for an organisation like Woolworths, as the people are the main stakeholders of the company. The uncertain rate of approval from the customers is also a concern for major risk factors for the organisation. Therefore, it is necessary that Woolworths maintain a greater timescale so that the innovative products can reach the target customers.

Loss of key staffs: The loss of key staffs can be a huge gap in the application of innovation. This is mainly because of the fact that the employees may not receive the innovation of the organisations in a positive manner. As stated by Auernhammer and Hall (2014) innovation results in changes in terms of organisational policies and work policies. In a company like Woolworths, the challenging factors for the manager are to maintain the satisfaction of the employees and ensure that the organisation manages to continue motivating the people. The loss of employees can mean loss of productivity for the organisation.

Availability of finance: Finance is usually regarded as the main source of problem for most organisations. The reason behind most organisations shrug away from innovating products is due to the lack of finances. In the case of Woolworths finance is not be a worry as the company has a huge market share in Australian retail market. Despite this, the gap in innovation exists mainly due to the doubtful nature of the responses of the customers. Therefore, it is necessary that Woolworths promote its business market in a manner so that it can address the loss of finance.

Reduced cost

Loss of business: As stated by Cho, Bonn and Brymer (2017) a huge gap in innovation is the fact that organisations may fear of losing its position in the market. This may be mainly because of the fact that the innovative process may not work well with the customers and the employees. Therefore, it is necessary that the managers of the organisations remain updated about the responses of the customers. In the case of Woolworths, this may not be considered as a threat as the organisation is well reputed and have a healthy market share in Australia. Therefore, it is necessary that Woolworths develop a value proposition that can help in the invention of its products or services.

The innovation that Woolworths need to develop is the delivery of its products. The service provided by Woolworths needed to be innovated so that it can compete with other competitors that provide equal home delivery services. It has been stated by Woolworths aim to innovate the websites through which the company can reach the customers (Erez et al., 2015). Therefore, it is necessary that the value proposition of the company addresses the concern of the customers and ensure that a proper message is delivered to the customers so that they can respond to the changes made by Woolworths.

The value proposition includes identifying the target market and creating a proper after sales service so that customers can remain loyal to the company. Woolworths need to ensure that a proper message is provided to the customers about the type of services and products that are sold by the company in the market. The value proposition needs to ensure that it provides an idea about solving the problem of the customers and the manner in which it can provide benefit for the customers (Liu et al., 2017). In the case of the services provided by Woolworths it is necessary that the company provide a clear definition of the type of innovative service it aims to render to the customers.

The innovation that Woolworths aim to create is in the services of the company. It has been seen that in the modern day, people lay emphasis on the delivery of goods and services in the place of residence. Visiting the physical store for the purchase of products has slowly faded due to the advent of technology (Hon & Lui, 2016). Woolworths provides customers with an opportunity to visit their website and order any products that is required. Therefore, the innovation for the services is required so that proper delivery of the services is done.

Increased competitiveness

In this regard, it can be said that a clear statement that Woolworths can make for the service innovation of the company includes:

The statement provides a clear indication about the services that the company intends to provide. In the earlier days, Woolworths did not provide such home delivery service and due to this reason, it is necessary that it make a statement that highlights the new service it aims at undertaking in the organisation. Therefore, it is necessary that the company can reach the customers by providing the new innovative strategy. However, Mascia, Magnusson and Björk (2015) stated that it is necessary to provide an ideas about the manner in which it can be provided so that the competitors does not replicate it and gain a competitive advantage.

Therefore, a modification of the value proposition statement can be made that provides the customers with an idea about the manner in which the innovation can be provided. For example, Woolworths can provide a statement that states that customers residing within an area of 10 kilometres will be provided the service free of cost. At the same time, the company can state the fact that the service provided could be recalled if not up to the mark. This can be developed in a manner so that the customers can have a proper understanding about the proposition of the market.

Hence, the value proposition of the service provided by Woolworths can be stated as:

“The top grocery service store in Australia provides effective and free service delivery within 10 kilometres from the store”

The statement can be effective for Woolworths to gain a proper promotion in the market. Customers residing in the areas within 10 kilometres can be excited about the proposition and ensure that they take full advantage of the situation that is presented to them. Woolworths can address the people and ensure that these people become the main stakeholders of the company. However, as stated by Sigala and Kyriakidou (2015) the drawback of this particular statement is the fact that people residing beyond the area of 10 kilometres remain deprived from the free services. Hence, the innovation tactic of Woolworths in this case needs to ensure that the services provided can reach every people in the country. Hence, the value proposition of Woolworths needs to include the characteristics of the innovative services that the company may provide.

Market segmentation

Geographic	Demographic	Behavioural	Psychographic
The geographic factor consists of the customers and the regions in which they reside. In the case of Woolworths, the company need to aim at the people across Australia so that it can reach new levels in the market. According to Caniëls and Rietzschel (2015), the Australian people like to consume fresh products that can help them to remain fit. Hence, it is necessary for the company to ensure that the target market is based on a particular location. As stated earlier, Woolworths aim to provide free services to the people residing in an area within 10 kilometres of the company. Therefore, it is necessary that the company find suitable target market based on the area. At the same time, this is important as the transportation cost of shipping the products are analysed. One of the major highlights the company is that it has several stores all across the region of Australia. Therefore, the service innovation can reach the people residing in the rural as well as the urban population of the country. Therefore, the behaviour of the customers is important to be analysed so that Woolworths can ensure that the service provided by them are appreciated in a positive manner.	Fay et al. (2015) is of the opinion that the demographic factors usually becomes important in the cases that deal with gender and occupation of the people. In the case of Woolworths, it is necessary that the company analyses the age and occupation of the people that are being provided with the services. The application of technology is usually a thing of attraction for the younger generation. Therefore, young and modern families can be the target for Woolworths while trying to experiment with their innovative services. The products of the company are directed for every gender and it is necessary that Woolworths maintain the socio-economic group of the people. The innovation can be related to the young people belonging to a social status that purchases food often from the stores. The use of technology for purchasing the food items can help Woolworths apply the innovative process in the company. Therefore, it can be said that the demographic factor is considered as unimportant for the company as the rate of predictability about the factors is extremely high. Hence, Woolworths can benefit from such a market segment and ensure that the position of the organisation improves.	This signifies the rate of usage of the products and the responses made by the customers about a particular product or service. It has been seen that innovation does not always provide a guarantee of success. Therefore, the innovative strategy adopted by Woolworths may not provide the company with the success it desires. The uncertainty factor of the products and the services of the innovative strategy may provide the company with problems related to innovation (Jia, Wang & Xiong, 2017). For example, the rate of usage of the home delivery service needs to be calculated so that it can be improved in the future. The rate of usage can be related to the loyalty of the customers and readiness to purchase the products. Therefore, the analysis can be related to the manner in which the customers use the innovative service. Woolworths can make the people aware of the benefits that can be obtained after accepting the innovative services provided by the company. Therefore, it is necessary for Woolworths to identify the behaviour of the customers based on the other three segments so that further improvement of the innovative service may be provided.	The psychographic analysis is based on the abstract characteristics of the people. Companies need to analyse the life style and the manner in which the people respond to the changes made by a company. The personality and the lifestyle of the people usually provide a proper analysis of the type of products and services that may be preferred by the people (Alt & Iversen, T2017). In the case of Woolworths and the innovation designed by the company, the services that the company aim to provide be related to the personality of the customers. It has already been seen from the geographic and demographic analysis that the target market is the people residing in a radius of 10 kilometres and has a proper knowledge of the use of technology. This can provide Woolworths with an opportunity to judge the people based on their lifestyle. The class of the people also defines the manner in which they want to purchase the products. In the modern world, the use of technology defines the social class of the people and the innovative services provided by Woolworths may help the company to gain huge success. Therefore, it can application of the marketing segmentation can help Woolworths to identify the success that the company may have after innovation.

Improved recognition of the brand

Table 1: Market segmentation

(Source: Created by author)

Khalili (2016) stated that the channel strategy is considered as a plan made by the suppliers to analyse the manner in which the products or services reach the customers. A number of channel options are used that help in channelling the final products to the customers so that they can appreciate the work done by the companies. In the case of Woolworths, the channel strategy of the company is the application of a direct strategy in which the manufacturers of the product and services are directly sold to the customers. Woolworths maintains self-dealing with the customers so that they can sale the products and ensure that the products and services are sold using an e-commerce website.

The innovative strategy of Woolworths is the fact that the website of the company can be related to the type of channelling that is required. The fact that the innovation depends upon home delivery of the products can be related to the e-commerce channel strategy. The use of a mobile application can help customers to gain access to the website of Woolworths and order products that are required. This can help the customers to remain loyal to the company and ensure that Woolworths provides proper services and products to the customers. Therefore, it is necessary that the company Woolworths form a proper channel by which customers can gain easy access to the type of products and services that are required.

Woolworths can use social media channels, blogs and official websites to attract the desired audiences. The type of message sent through these channels need to be innovative as well as creative. According to Bouncken, Brem and Kraus (2016), a creative and innovative channel plan can help Woolworths to attract the attention of the people and at the same time ensure that customers can use the channels simply. An example of such a channel plan that can be used by the customers of Woolworths can be provided. It is to be kept in mind that the channel strategy can be applied after a comprehensive analysis of the marketing strategies of the company.

Channel	Structure	Tone	Desired action
Website	News section	Creative	Click to avail the services
Social media	Conversational	Friendly	Interact via social media
Blogs	Cross linking	Professional	Link to posts in blogs

Table 1: Channel strategy

(Source: Created by author)

The competitive strategy analysis can be done by using Porter’s generic approach. According to Stierand, Dörfler and MacBryde (2014), the competitive strategy can be based on four main factors that may help a company like Woolworths to determine its position in the grocery industry of Australia. Sustainable competitive advantage can be developed by the company to understand the scope of activities that Woolworths aims to achieve. Therefore, Woolworths need to analyse its business market by analysing the four trends of the generic strategic forces of Porter.

Challenges of innovation

Cost leadership: The cost leadership factor provides an organisation with the ability to provide low cost products in the company. Woolworths need to analyse the sources of the cost leadership factors and accordingly vary the structure of the company. Woolworths need to pursue the economies of scale along with other factors such as availability of raw materials, technology and bargaining power of the customers. As stated by Hogan and Coote (2014) Woolworths exposes every source of cost advantage and ensure that an overall cost leadership is attained. In the case of the innovative services provided by the company the cost leadership need to be subtle and low prices need to be provided so that effectiveness of the services can be attained. The average prices of the cost of innovative charges need to be applied so that Woolworths can identify the customers. In this case, it can be said that the marketing segmentation plays an important role for ensuring cost leadership. This is because the target market is based on the manner in which cost can be maintained in the company.

Differentiation: The differentiation refers to the uniqueness of the products. In the case of Woolworths, the differentiation is analysed based on the uniqueness of the services provided by the company. It has been stated that one of the gaps in innovation is the fact that the competitors can easily imitate it. Hence, Woolworths need to ensure that its competitors such as Wesfarmers do not replicate the innovative services provided by the company. This can be considered as an important strategy for Woolworths as the uniqueness needs to be based on certain dimensions that are valuable to the buyers. For example, the uniqueness of the innovative service provided by the company can be the fact that Woolworths provide free services to people residing within 10 kilometres from the shop. At the same time, people residing beyond that region are provided with an opportunity to purchase the products at a discount. Therefore, the company takes into consideration the interest of the Australian people and thereby can be well differentiated in the markets of Australia. Hence, it can be said that Woolworths can apply this particular strategy for the promotion and effective execution of the promotional strategy.

Focus: Shalley and Gilson (2017) are of the opinion that the focus strategy maintains a competitive scope within the industry. Woolworths need to ensure that a group of target people are selected and based on it the strategies of the company are directed. It has been seen that after the market analysis of the segmentation factors, Woolworths can afford to exclude certain people that may not take interest in the new development of the company. The target market focuses on the young generation keen on using the technologies. The focus strategy has two variants and based on the variant factors Woolworths can manipulate the marketing strategies of the company. The two variant factors include the cost focus and differentiation focus. As observed by Zhou (2015) the two variant factors can be an expanded version of the earlier strategies that are suggested by Porter. The target segment of an organisation can be based on the cost focus. Similarly, Woolworths can continue to seek a competitive advantage in the target segment of the company.

Uncertain returns

The cost focus provides Woolworths with an opportunity to analyse the target market and ensure that the cost of the products does not reach much. In this case, Woolworths need to ensure that the innovation services provided by the company have a cost advantage that can be used by the managers of the company. Hence, Woolworths need to focus its cost in a manner that can help the customers avail the services provided by the company. Drucker (2014) stated that innovation requires cost and without proper financing, it can be difficult for organisations to maintain the cost incurred after innovating a product. Therefore, the cost of the products or services needs to be made within the budget of the customers. Woolworths can follow a similar approach and ensure that the cost incurred by the company for providing the services is less. Therefore, the strategy of 10 kilometres free service plays an important part in the success of the company. Analysing this particular strategy it can be said that the market segmentation can be linked directly with the target market. At the same time, Woolworths also need to focus of the differentiation strategy that provides an analysis of the specific uniqueness that the services need to provide to the customers.

The differentiation strategy focuses on the ability of an organisation to continue its production in the market. In the case of Woolworths, the company need to ensure that the uniqueness of the services provided cannot be easily replicated. One of the advantages that Woolworths have is the fact that it has various stores all across the country. According to Forgeard and Kaufman (2016), both the strategies are depended on the differences of the target segments and other segments that constitute the industry. Therefore, it can be said that Woolworths can apply the differentiation strategy so that the target segment can be served. The differences in the behaviours of the customers can be analysed based on the application of the strategies. Therefore, it can be said that Woolworths need to ensure that customer focus is maintained along with the differentiation of the strategies. The positioning of the company and the innovation service in this case can be attributed to as being differentiated as none of the other competitors can provide a bold move in the case of providing discounts and free delivery to the customers (De Bono, 2015).

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