Timing of Entry and Collaboration Strategies - Case Study Example

Innovation Contents Case Study Timing of Entry 3 Case Study 2: Collaboration Strategies 6 References 9 Case Study 1: Timing of Entry The timing of entry and the functionalities of the different social media sites play a major role in deciding the success or failure of the sites. The timing of entry has been established as a major factor for the success of a company. The choice of proper timing of entry can result in increasing returns. The companies can be segregated into three broad categories based on their timing of entry into the market. The first category consists of the first movers who are the first entrants into a market with new products and services. They are also called the pioneers with respect to their market entry timings. The second category consists of the early followers who are not the first entrants but are the early entrants into the market and operate in an environment of very low competition. The last category consists of the late entrants who enter into a market which has already been penetrated. Basically, the late entrants enter into a red ocean market. There are many benefits and disadvantages of entering the market early as well as of entering the market as a follower. The advantages of entering early into the market have several advantages like getting the advantages of increasing returns, technological leadership, brand loyalty, effective use of the assets and exploiting the switching costs of the buyers. The disadvantages of the early entrants into the market include the factors that the expenses incurred in research and development is very high, it is difficult to identify the requirements of the customers as there are no set benchmarks. Also, the supply chain and distribution channels are not effectively developed and the technologies are not adequately enabled and developed. Sixdegrees.com was an early social media site started in 1997. The timing of entry for SixDegrees was considered suitable as at that time the social networking sites belonged to an uncontested market. But the features of SixDegrees were not adequate for the users. The disadvantages of being an early entrant into the market played a major role in the failure of SixDegrees. SixDegrees was not able to understand and evaluate the needs of the consumers efficiently and the following entrants like Facebook and MySpace learnt from the shortcomings of SixDegrees and built their sites with proper rectifications of the mistakes done by SixDegrees as an early entrant. FriendSter was another social networking site that was launched in 2003 and was a huge success in its initial stage. The site faced both the advantages and disadvantages of entering into the market early (Schilling and Phelps, 2002, p.13-26) The site was successful in identifying and assessing the evolving requirements of the users which acted as an advantage for the site, resulting in more than seven million users registering in the site soon after its launch. But the site faced the disadvantage of not having the proper technological supports in place because of which the servers of the site were unable to handle the huge onsite traffic. This led to delays in the functioning of the site and creating dissatisfaction among the users which ultimately caused the site to end its operations and move out of the social communication sites market. MySpace, on the other hand, entered the market at a time when it was able to capitalize on the established base of the online social networking group users as well as learn from the mistakes that sites like SixDegrees and Friendster committed. MySpace also entered the market at a time when it was possible for the site to fill a gap within the social networking sites market. This was because the consumers had become familiar with the concept of social networking sites by that time and also there were no sites launched which could cater to the evolving needs of the users. The heavy advertising processes followed by MySpace in due to its collaboration with Google inc. created much dissatisfaction among its users. MySpace was more successful than other sites like Sixdegrees.com and Friendster because MySpace used a number of innovative functionalities and focused on features like customization of user profiles, display of photos, music playing features and spaces for blog writing. MySpace was considered the most popular among the social networking sites from the year 2005 to 2007. Facebook.com came with many additional features and entered the market at a time when these features were very much required by the users. Facebook.com offered more security than other social networking sites like MySpace and had an open source platform which ensured increased interest of the users as compared to MySpace which was used to develop all applications within the business. Facebook.com streamlined its operational features with the trends of the social sites market and integrated different features like social gaming, self-creation of groups, products reviews and partnerships with leading companies for advertising and logging in with Facebook accounts. The restriction of the users to see the profiles of other users was a main feature used in Facebook.com which increased its popularity because of the increasing concern to personal security over the internet. Facebook.com was initially started as a networking site only accessible by the students of Harvard Business School. In 2006, Facebook.com was launched to be used by the general public. The timing of entry of Facebook.com was one of the most significant factors in driving the huge success of Facebook.com. The company managed to learn from the social networking sites launched in the past and developed a site that rectified the shortcoming of other social networking sites as well as leveraged on the various technical innovations. The site has become the most successful social networking site with the number of users growing by 40% every year. The site is most famous for its innovative functionalities that make it difficult for other players in the market like Google Plus, Hi5 etc. to compete with Facebook. Google has introduced a direct competitor site for Facebook.com called the Google Plus which was able to have a huge membership but according to social site researchers Google Plus is not likely to overtake the popularity of Facebook.com as the most used social networking site. Case Study 2: Collaboration Strategies Collaboration strategies are mainly aimed at facilitating innovation, increasing resource capabilities, creating synergy levels and promoting organizational effectiveness. Collaborations with external partners create a wider scope to test innovative techniques and approaches. Collaborations generally tend to increase innovation because of the fact that the partners have different competitive skills and can increase the level of dynamism for the business. The collaborative efforts of an organization through effective partnerships with external individuals or organizations are fruitful in supporting innovation within the business. As seen in the collaboration of Dyesol with Pikilton and Tata Steel, collaboration activities can create sufficient commercial value (Regari and Gratzel, 2012, pp.737-740). But it is important to create the perfect synergy between the collaborative partners to ensure better creation of value through the partnership. There are different advantages and disadvantages associated with collaborations with external organizations. Collaboration may enable the companies to create more innovation and increase the value of the businesses at a comparatively lower risk level and lower costs. Collaborations are likely to support evaluation as well as innovation in the partnering firms. The collaboration allows individual partner companies to experiment with different approaches and retract from the experiments if the approaches do not seem fruitful. This is because a strong backup related to finance as well as resources is attained through collaborations. The risks and costs incurred are shared whereas the resources of the partners are combined. This facilitates a higher level of innovation practices in the business which would have been difficult for a single business to conduct alone. The pooling of different resources helps to increase the capabilities of the businesses to invest more in their research and development thereby providing a supporting framework for innovation practices within the business. As it is observed in the case of Dyesol collaborating with Tata Steel, the joint venture was likely to offer much manufacturing expertise as well as capital for investment in the research and development process of the business. The collaboration was also critical for driving the awareness related to the DSR technology invented by Dyesol. It was unlikely that Dyesol alone could have promoted the technology in the international markets. But the collaboration with a giant multinational like Tata Steel increased the chances of the technology of Dyesol being promoted and sold in different international markets. The dye sensitized solar cell technique of Dyesol was likely to be more saleable and earn more revenue when the company partnered with other organizations. In keeping with this fact, Dyesol also partnered with Pilkington for a joint venture to facilitate the marketing of the technology through its use in the products of Pilkington Company. The partnership with Pilkington facilitated the innovation of a new product which used the dye sensitized solar cell technique on the architectural glasses of Pilkington (Barker, 1977, p.14). This collaboration was also created with the aim to increase innovation products and processes in the joint venture business. The resources capabilities and competencies of the partner companies are combined in the collaboration activities to enhance the innovation practices in the businesses. The collaboration practices also ensure that the knowledge and experiences of the partners are exchanged which increases the dynamics of innovation within the businesses. Collaboration with the external organizations also ensure that several benefits like decrease in market uncertainty, technological uncertainty, cost and risk sharing, reducing the probability of copying of the research works and an increase in the ability to use different types of expertise within the business. These benefits are extremely useful in improving the efficiency of innovation practices from the economic perspectives. Collaboration activities influence radical and dynamic innovations. The collaboration process is likely to create economic benefits which would ensure that more valuable innovations are created in the business. The collaboration process ensures that knowledge and information can be sourced from the external partners. In the case of the partnership of Dyesol with Tata Steel, it was evident that Dyesol wanted to leverage on the capital and the resources that it could access on its collaboration with Tata Steel. The collaboration also helped to support the innovation of DSR technology from the economic and marketing perspectives. There may be several disadvantages of collaboration activities with external partners. These may include the differences between the interest of the partners in the collaboration, the difficulties faced in mutualism and co operation between the management and the employees of both the companies, the non synchronization of the behaviour of the workers in both the companies and the conflict related to the control and power factors of the managers. In the collaboration between Dyesol and Tata Steel, Dyesol faced the risk and fear of its patents being circumvented by Tata Steel. In case Tata Steel would have learnt to understand the technique of manufacturing the DSR technology, there would be high risks for Dyesol to lose its patents as Tata Steel would have proved to be a much stronger opponent in the litigation processes. The management of the patent rights would be a much critical perspective to be considered by the companies when entering into a collaborative venture with an external partner. The disruption in the collaborative activities due to the lack of synergy among the objectives, goals and processes of the partners may pose as a serious disadvantage of the collaboration. It is critical to develop a high level of synergy to make the collaboration with external organizations successful. Streamlining the objectives and the interests of both the partners in case of collaboration is critical for deciding the success of a collaboration activity. References Barker, T. C. 1977. The glass makers: Pikilton. London: Weidenfield & Nicholson. Regari, B. & Gratzel, M. 2012. A low cost, high efficiency solar cell based on dye sensitized colloidal TO2 firms. Nature. Vol. 353. pp. 737-740. Schilling, M. A. & Phelps, C. 2002. Inter firm collaboration networks: The impact of large scale network structure on firm innovation. Management Science. Vol. 53(1), pp. 13-26. Read More