Canon: Approach to Innovation

This is in contrast to Samsung in my previous posting, from the Financial Times regarding Canon:

"Technology has become too complex for Canon to develop everything in-house and it is expected to make more acquisitions... the company’s chief financial officer said in an interview with the Financial Times.

“We can no longer cover everything with our own technology so we need alliances and tie-ups,” said Toshizo Tanaka.

His comments highlight how the traditional model for Japanese electronics companies of relying solely on internal research and development has broken down.

Canon is likely to make acquisitions rather than license technology, however, in order to differentiate its products.

“If [technology] is not closed then others can make similar devices,” Mr Tanaka said."

This is still a traditional model.  Opportunities remain in the areas of customer/consumer driven innovation, driving supplier/partners to invest in R&D and/or introduce new invention into existing products, academic research tie-ups, etc.

Samsung: Investment on R&D

From the Financial Times:

"Samsung Electronics yesterday unveiled a Won26,000bn ($23bn) investment plan, its biggest to date, as the world’s largest technology company by sales looks to cement its leadership in semiconductors and flat panel displays.

The total investment for this year, which includes Won8,000bn (~$7bn) for research and development, ...

Samsung’s spending this year will be bigger than the combined investments of Intel, IBM and Sony, according to Bloomberg data."

Development Sector

Having been engaged in the development sector for the past two years, I have discovered the difficulty the sector and people working in it face... i.e. their inability to move at speed, though they are tremendously dedicated and do not lack initiative.  In the Financial Times report on the sector:

"...as multilateral institutions and government development agencies work more closely with business, the non-profit sector faces the challenge of moving at the same fast pace as its private-sector partners."

"“Businesses take decisions faster than UN agencies,” says Ms Roman [director of communications, private partnerships and public policy at the UN World Food Programme]. “Right now, we’re partnering with Kraft and Unilever in Bangladesh. They’re eager to move tomorrow, and I’m eager too, but the system on our side doesn’t move that quickly.”"

Yet, public and private partnerships are enabling solutions to reach places where the needs are extreme, from medicine to shelter, clean water to education, self sufficiency to economic development.

Desertec: Solar and Wind Energy

A project to generate energy for Europe from North Africa is being initiated by Desertec, see here.  Financial Times writes:

"... the most ambitious solar project is in north Africa. The Desertec Industrial Initiative is a plan to build a vast network of solar power plants and wind farms, covering the desert and stretching for hundreds of miles, and connected to an advanced electricity grid that will carry power generated round or under the Mediterranean sea to feed Europe’s appetite for energy.

Desertec – backed by a coalition of more than 10 big name companies, including Munich Re, the German insurer, Deutsche Bank, utilities RWE and Eon and Siemens – is likely to cost about $400bn (€302bn, £262bn). If successful, the project could supply as much as 15 per cent of Europe’s electricity needs by 2050."

What I found interesting is Desertec's request for donations for the project via the web, see here.  Desertec is empowering the individual to act through a validated message of need, yet the value needs to be made clear for the "call to action" to be advocated.

Naomi Klein on NPR

In the "On Point" program on NPR Tom Ashbrook talks to Naomi Klein, listen here.  Watch Naomi on Comedy Central here.

Shoppers Reality at the Shelf

Having been the Architecture Leader at Procter & Gamble on the shopper and consumer virtualization platforms, I am thrilled to see that the statistics still hold true when you and I stand in front of the shelf to make the buy or not to buy decision.  My work was covered in AG Lafley's book "Game Changer" blogged here by friend and colleague Franz Dill.  Franz was instrumental in setting up the P&G Innovation Centers, now enabling P&G to be the leader in shopper and consumer insights to impact product development at the concept stage:

"In the Bases research, the biggest driver of new-product awareness in store was simply seeing the product on the shelf -- accounting for product awareness in 71% of cases where people cited the store. All the other tools marketers and retailers use to drive in-store awareness -- including off-shelf displays, retailer circulars, product demos, in-store media and samples, accounted for awareness in only 2% to 18% of those cases. In-store media and product demos both scored in the low single digits. That helps drive home the importance of packaging and signage, Mr. Twitty said."

States the article "This Upfront, P&G May Want to Boost Spend on Piggly Wiggly" here. 

Though AdAge's graph here from Nielsen showcases the impact of shopper based design, shopper driven marketing communication, shopper based package design, etc. see below a video from the Economist on the impact of TV on the shopper and the consumer.

Introspection on "Pain of Paying" by Dr. Dan Ariely

Dr. Dan Ariely provides introspection on daily consumer products like razors (specifically Gillette).  And of course, if this interests you then Dan's book "Predictably Irrational" provides deep insights on consumer behavior and associated economics.

Frugal and Bandit Innovation

I have believed that one of the key ways disruptions in products and services get developed is when the environment creates pressures and the creative thinkers deliver game changing and apropos to the need innovation.  I have been argued against that places like Silicon Valley are not being pushed yet continue to lead... and always an interesting debate ensues!

Here is an excellent video on how the developing and frontier markets are innovating on top of what is considered breakthrough for the developed countries.  I like having the Economist on my side in this debate.

World Perspective / Photo - 7 [Bull vs. Bear]

Excerpt from a letter in Financial Times:

"[Mehmet Aksoy's] monolithic stone sculpture is before the Istanbul stock exchange represents more closely the reality of the market.  The brawny bull is arrested on the cantilevered upward slope by the snarling maw of an angry bear.

The bull's stance is one of cautious respect, the bear's on the other hand forms a volatile cloud with a clawed paw carved as a concave negative shape at the apex of the bull's upward path."

World Perspective / Photo - 6 [Saudi Arabia]

From various news sources:

"Saudi newspapers ran front page pictures on Friday of King Abdullah and Crown Prince Sultan bin Abdul Aziz in a crowd of women with their faces bared, adding fuel to the growing fight over mixing in the kingdom."

The picture is several weeks old though.

King Abdullah continues to lead with changes across all aspects of Saudi life, an example is:

"[King Abdullah] opened a new science university named after himself that permits the international body of students and faculty to freely mix together."

World Retailing: Retail via eCommerce

In the Financial Times World Retailing this month, "Seamless service from clicks and bricks" talks about the growth of eCommerce driven retail, moving of luxury goods sales to the internet and their success, and a combination of clicks and bricks.

"Deloitte and Forrester, the technology and market research group, found that 40 per cent of retail sales in the US last year were influenced by the internet, with consumers either shopping online or using the internet to gather information on potential purchases."

Now the fun begins!  The five senses to be influenced available to a retailer in the retail store disappear on the web.  How does one create the right experience for the diversified, from the affluent to the lower middle class, to engage and convert them?  This is where pure analysis fails... for example, if a web shopper is recognized as liking red because they bought a red pen, does that imply they would also buy a red car, and a red shirt, and so on.  Insights into behaviors through aggregation can result in misfires and loosing the online shopper all together.  eCommerce retailers will need to move towards personalization - the market does not have but one true personalization player, one that can comprehend astronomically large coincidence points of the shopper and instantly connect the semantics to it, while providing this information at instantaneous speeds.

Current solutions can collect all the dots yet, as the article states, "But joining the dots takes time."  Most of the time the shopper has moved on or has been influenced by a different solution to their need.

eCommerce is also going to enable new entrants in the global market place as the "virtual shopper" can do shopping on the eCommerce "virtual shelf" from anywhere.  Like I said, now the fun begins!  Will the shopper and consumers be the winners in the end?

"As retailers rush to provide even better online shopping experiences for their core customers, they are also using the internet to procure new ones.

The next step for many is to use the internet to give them exposure overseas.

Next, the UK-based clothing chain, said last month that it was pulling back from expanding overseas through its own stores in favour of growth via the internet.

It has expanded its online operation to 36 countries and has been selling into the US via the internet since the middle of last year.

“Internationalising sales is a smart strategy,” says Mr Fitz- gerald. “With the internet, you can go into 20 new countries within a year. It is remarkable and you really can achieve that kind of scale if you prioritise and focus.”"

If you would like to read this and other articles in the World Retailing, download the complete file here.

World Retailing: It's all in the Data!

In the Financial Times World Retailing this month, "Good analysis and use of data can make all the difference" highlights the role of information technology from product manufacturing to in-market to consumption.

"“But what has changed since is that there is now a renewed focus on looking at where retailers make money, and that is in the store,” [Andy Park, industry leader for retail and consumer products for northern Europe at IBM] says."

What is interesting to note is "Retailers are still investing to improve the way they handle the last 50 metres of the logistics chain, from the stock room to the shelf."

The article does not fully touch on one of the most important piece, shopper data... data that has been collected for close on a decade, loyalty cards, credit cards, POS, etc.  Coarse grain segmentation with 10% to 90% hit or miss margins and marketing budget wastage may finally begin to be managed through not only statistical analysis, but making "sense" of the shopper decisions, i.e. the semantics of the shoppers actions or not.

"“There is a shift in focus to insight and not just measurement analytics, but to insights into the shoppers themselves,” says Renee Sang, who runs Accenture’s Customer Innovation Network.

“Price transparency is now a given, so retailers want to identify which customers are most likely to convert [to buyers]. Not all customers convert in the same way. For some it’s price, for others assortment, others service.”"

If you would like to read this and other articles in the World Retailing, download the complete file here.