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Global Innovation Challenges - Art

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ART is one of the world's emerging technology giants. The company had grown through the merger and acquisition of numerous technology-based industrial companies. The company's success had been built on its innovative ideas and entrepreneurial culture coupled with decentralized management philosophy. Continuous innovation excellence exhibits product leadership to delight customer and grows by merger and acquisition. ART is an example of narrow focus in business that includes innovation.

Transition to knowledge economy requires speed and ART has the strategy of buying over building. This is the 21st Century strategy to grow company by merger and acquisition. Art has acquired the filtration business unit from Oil & Gas Services Company. This case study is going to analyze the challenges of new innovation from broader perspectives.

Company's Goals, Aims, Objectives and Culture:

Goals: Infusing discipline into its decentralized organization, ART's top management set highly hostile performance objectives and tied executive compensation tightly to them. i.e 10/15/20 target for each business unit. 10% for sales growth, 15% pretax margins and 20% return on invested capital.

Aims: ART was dedicated to supporting innovation not only with funding but also in its practices, several of which were deeply rooted in the company's culture.

Objectives: Knowledge sharing and dissemination are the ARTS business philosophy. Technology and human capital widely shared among divisions to help unit with promising product ideas.

Culture: ART moves quickly to bring products to market. If an idea showed promise, funding was usually available for small batch of productions.

Global presence of ART is pushed by Hall in 1990's. It is effective to increase the market access as well as broad the access to talent. According to him, Innovation & Entrepreneurship have no nation boundaries.

Troubled Filtration Business Unit:

In 2001 Peter Vyas become Business manager of Filtration unit. Peter has Strong Leadership character. Peter Immediately focused on fixing low morale and growing turnover and carefully selecting entrepreneurial minded individual to fill up the gap created prior to his taking this role. He also started reviewing Business opportunity and recruited Janice Wagner as marketing manager.

Peter appointed a dedicated technology evaluation team early in his tenure, as an initiative for growth, charging them with the responsibility to focus on technologies with the potential to turn the unit around.

After reviewing the technology, Peter became convinced that this had been a mistake not to pursue filtration project and encouraged his evaluation team to pursue the project as part of his technology review process.

Peter decided to pursue the previous filtration project and convinced the VP of Corporate R&D to allow ITC technology team located in INDIA to become member of his technology team. He also asked Wagner to do market research, at the same time, to identify potential opportunity for the new product as a new initiative drive.

2006, Jackson was appointed vice president of the Water Management Division. She decided that the filtration unit should put forward three phase process linking market analysis, technological development and business planning for the proposed second-generation filtration unit as a new discipline to stem out negativity surrounding previous failed attempt.

What are the issues:

* Design defect

* Low morale and growing number of turnover

* Mistrust among global RND

* Lack of cost benefit analysis

* Incorrect business modelling

* Loss of credibility within the organisation

* Did not seek potential benefit at home market

* Loosing $6 mil per annum

New Initiative for product launch: (Mini-Oxidation)

After reviewing the previous failed attempt, VP Jackson demanded that Filtration business unit start from scratch by linking market analysis, technology development and finally business plan. Third launch of mini-oxidation system can be divided into three phases. Peter made a six person team to peruse with the project.

Phase 1: To come up with Product Concept and Market Analysis

Wagner had to develop a general product concept which is supported by market research. She decided to focus additional research on U.S. data that seemed to indicate strong potential for a residential water purification system. She also decided to see if opportunities might exist in domestic agricultural applications. Wagner's research on the U.S. water industry indicated that the domestic water treatment equipment market generated sales of over $9 billion. This gives a hope that new innovation technology can be used in home territory i.e. US. After careful consideration Team has decided to start the project in small



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