Using Social Media to Facilitate Innovation and New Product Development - Research Paper Example

USING SOCIAL MEDIA TO FACILITATE INNOVATION AND NEW PRODUCT DEVELOPMENT By Name Course Instructor Institution City/State Date Table of Contents USING SOCIAL MEDIA TO FACILITATE INNOVATION AND NEW PRODUCT DEVELOPMENT 1 Table of Contents 2 Executive Summary 3 1.0 Introduction 4 2.0 Research question 5 3.0 Problem Context and Literature 5 4.0 Research Methodology, Approach and Research limitations 9 5.0 Discussion and Data Analysis 9 6.0 Implications 12 7.0 Recommendations and Conclusions 13 8.0 References 14 Using Social Media to Facilitate Innovation and New Product Development Executive Summary Nowadays, the common knowledge about process of innovation focuses on the observation that business organisations hardly innovate on their own and that innovation is achieved through interactive relationships between different institutions such as producers and users. Social media is a crucial tool for innovation because it allows firms to draw insights, which may be utilised for organisational innovation and product development. Therefore, the use of social media is turning out to be more embedded people’s day-to-day lives, both personally as well as professionally. The report provides evidence that Innovation initiatives that are more successful are those aligned with the innovation strategies and overall product development of the company. This report suggests an Auto-Robotic technology that would facilitate digital production of the Body-in-White at Iveco Australia. This innovation has not been applied yet by automakers, and could enable Iveco to achieve improved productivity and efficiencies and eventually increase returns. Without a doubt, robots are swiftly becoming cheaper, faster, and smarter. Importantly, they will dramatically transform the processes of manufacturing in the coming years. The suggested robotic innovation improves automation and can level the international playing field for car manufacturing. The purpose of this report is to analyse how social media within and outside Iveco Australia may be utilised to facilitate innovation, new product development and commercialisation. 1.0 Introduction Innovation according to Greenhalgh and Rogers (2010, p.4) is the process of applying new ideas to the processes or products in an organisation that result in a better value. Iveco Australia needs a robotic innovation that would facilitate flexible production and result in a sustainable competitive advantage. The suggested innovation utilises wireless internet connection in coordinating the company’s needs with the equipment used for production. The innovation will enable engineers at Iveco to produce car bodies efficiently and cost-effectively. As observed by PWC (2015, p.6), robots have been equipped with improved abilities thanks to advancements in technology. Basically, manufacturing Body-in-White digitally would facilitate standardisation and repeatability at Iveco, and would enable the company to achieve some level of consistency and quality as other automakers. Imperatively, the robotics-supported manufacturing would result in improved production efficiency; thus, making the company more competitive. Social Media can be defined as an internet based platforms as well as tools that improve and increase the sharing of content (Kim & Ko, 2012; Carr et al., 2015). As mentioned by Lam (2016, p.22), social media is associated with the consumer-generated content or the user-generated content platforms that allow value to be created. Most of the world’s successful companies have well-defined strategies for Social Product Innovation, which are tied to their overall product development and innovation processes. Using social media to facilitate and commercialise innovation can result in new product ideas, faster product adoption as well as reduced costs of product development. Consequently, this could result in the success of new products and enable the company to realise higher product margins. This report focuses on Iveco, an Australian-based manufacturer and distributor of commercial vehicles whose success has relied heavily on innovation. The company was established in 1902 and currently, has more than 600 employees. 2.0 Research question How can social media be utilised to facilitate innovation, new product development and commercialisation at Iveco Australia? 3.0 Problem Context and Literature These days, scores of companies are facing challenges in identification of defining strategies as well as leading practices. In spite of such challenges, Kenly and Poston (2011) posits that early adopters have achieved considerable business benefits from their innovation abilities. Using social media for innovation of products is one of the measures utilised to determine the achievement of early adopters. Social media is increasingly become more important to business organisations because it allows for involvement of the users in the co-creation. Social media is important because it allows for creation and distribution of knowledge both inside and outside the organisation through peers’ open communities utilising different forms of collaborative web tools. In the innovation process, social media offers a valuable means of collaborating as well as interacting. However, shifting to a culture that focuses on innovation as opined by Yoo and Kim (2015, p.74) is not easy because it is associated with handling real tensions. Social media implementation is inclined more towards alignment through organisational adaptations since technology adaptation scope is narrowed for social media technologies, which are outside the firm. Although technology is currently more integrated to processes of commercialisation and operational R&D, adaptation in organisational structure and culture has not been achieved in many companies; therefore, it has become more challenging to combat afflictions in the culture, socialise managers as well as ensure honesty to users. Marian and Martinez (2015, p.139) suggests that small adaptations in using in-built technological modalities at stages of commercialisation and R&D may facilitate transfer of knowledge through interaction amongst users as well as ensuring that knowledge from outside is digestible. According to Montgomery and Perry (2000) all organisations have to innovate so as to become effective; for instance, non-profits organisation need to innovate in order to handle the growing needs of the clients while managing the funding cutbacks. Therefore, it is imperative to have an innovative culture, which as mentioned by Rao and Weintraub (2013, p.29) depends on six building blocks; success, values, processes, resources, climate and behaviour. Imperatively, innovative culture is important because it shapes the pathways by through which ideas are developed and it involves filtering various new ideas systematically and using processes to turn the best ideas into innovations (Morris, 2006). Before social media, many companies as mentioned by Bendapudi and Leone (2003) used risk-averse strategy to encourage customer participation in the manufacturing process with the objective of satisfying the customer expectations. Furthermore, organisations have been using Design Thinking for promoting strategic sustainable development (Shapira et al., 2015). However, all this can now be achieved through social media. Recently, business organisations have started embracing social media because it offers a platform for collaborating and engaging with consumers. Furthermore, social media enables businesses to gain insights that can foster product development and promote loyalty (Hudson et al., 2015; Peltola & Mäkinen, 2014; Shaw, 2015). Despite the benefits associated with the use of social media, only a few studies such as Kim and Ko (2012) as well as Nguyen et al. (2015) have examined the relationship between the use of social media and brand innovation. In He and Wang (2015) study, the established that even though scores of organisations are using social media tools to improve their business activities like management of customer relationship and marketing, there is limited evidence of organisations using social media to facilitate product innovation. The majority of business organisations have been unable to combine the organisational innovation with social media because the latter is episodic, informal and complex. Presently, there are a lot of social media applications and tools that can be used by business organisations; Facebook, YouTube, LinkedIn, Twitter, blogs, wikis, and many others. Most organisations are using social media tools for customer service, innovation, branding, marketing, as well as product development (Culnan et al., 2010; Leonardi et al., 2013). Although social media can be utilised for various purposes and activities, Sundararajan et al. (2013) posit that its values are largely generate from how businesses utilise it. Social media platforms’ functionality and features have an effect on the behaviour of the users and directly influence how individuals coordinate, interact, work together, share information and socialise. Companies can use social media to solicit feedback or input from the users concerning the new or upcoming products. The existing literature on the social media focuses mainly on customer service, marketing and branding, but only a few have examined the use of social media for organisational innovation. Only a few organisations have realised that social media may be used to reinforce their innovation capabilities through network building, connection and exploration (Kastelle & Ohr, 2013, p.429; Zhu & Chen, 2015). Besides that, social media as indicted by Holtzblatt and Tierne (2011) may be utilised as platform for managing innovation, whereby individuals with different knowledge are engaged to create an opportunity as well as come up with an idea that could be beneficial to the organisation. Presently, customers and companies are progressively co-creating value through creation and evaluation and well as in the development of virtual prototypes (Kohler et al., 2011). Co-creation normally happens during the process of product development and innovation. Therefore, a value can be co-created successfully if both the organisation and customer gain benefits when interacting (Liu et al., 2014). Some of the big companies such as General Electric and IBM as cited by Kolko (2015, p.70) have realised that design thinking is a crucial instrument for humanising and simplifying; therefore, it must be a core competence. Design thinking can be facilitated by using social media. This is because social media can enable a company reach many customers at once and improves the process of interactive co-creation. Social media benefits can be evidenced by Amazon Mechanical Turk, whereby subjects were recruited and experiments were run successfully (Paolacci et al., 2010). In view of this, Iveco Australia can utilise social media to share information about the Auto-robotic technology that is still under development so as to get feedback from the customers and be able to design the product together. Developing auto-robotic technology will result in a major impact on Iveco. The need for maximum productivity and quality in the automotive industry according to Bogue (2013, p.418) has been increasing; therefore, developing a robotic technology will enable Iveco to manufacture quality products according to the needs of the customers. 4.0 Research Methodology, Approach and Research limitations Data collection was achieved through the review of existing literature. The existing knowledge on areas like research findings, critiques, theories, methodologies, and evaluations on the use of social media for product innovation was reviewed. The data was collected from articles, journals and reports before a critical evaluation was carried out to identify differences and similarities between the current work and the existing literatures. Works that have been done in the context of social media and innovation was reviewed. Using the existing knowledge, innovative concept as well as idea was developed for the purpose of further research. The literature review was carried out to deepen and sharpen the theoretical research framework and familiarise with the recent developments in the research area. Different investigations were compared with the objective of discovering the contradictions, connections and other relations between research results from various studies. In terms of research limitations, although the literature review offers strong insights concerning the value of using social media for innovation, the existing discussion or research in the literature with regard to the topic is very limited. Furthermore, the prospects of using social media to generate innovative ideas in the automobile and manufacturing industry have not been studied extensively thus far, although many companies have started putting social media tools into practice. 5.0 Discussion and Data Analysis Evidently, the automotive industry has an enormous experience to robotics and automation, but the industry is yet to develop automation technologies and collaborative robots that could enable them reduce the cost of production and improve quality. These days, many companies are focussing on competition, which as mentioned by Morris (2011b, p.7) could result in vulnerability and tension between short-term and long-term issues. Although many companies have invested heavily in innovation (in terms of money and time), the process is still frustrating. Most innovation initiatives fail because of the management inability to execute the innovation strategy. In this regard, an innovation strategy is the organisation’s commitment to some behaviours or policies designed for realising certain competitive goals. In view of the reviewed studies, most agree that innovative strategies should clarify priorities and objectives of the organisation (Pisano, 2015). In their study, Roberts and Piller (2016) point out that for a company must create an innovation strategy and ensure they have the right people and processes before embarking on social media initiatives for innovation. A company can successfully innovate using social media tools if their organisational goals are aligned with the innovation strategy and also depends on the ability of the company to get customer insights, understand the marketplace and to co-create with customers in developing new concepts and ideas. The world is rapidly changing; therefore, a secure future cannot be achieved by organisations that believe what was successful in the past will remain successful in the future. Successful business leaders as mentioned by Palmer and Kaplan (1998) are those with flexible mind since they can routinely challenge the old ideas and embrace new ones. In their study, Duncan et al. (2011) established that individuals who utilise LinkedIn (a social media tool) led to the improvement of inter-firm relationships, problem-solving as well as collaborative innovation. In view of their study, it is evident that social media does not only result in improved communication ability across inter- firm boundaries, but also leads to increased innovation ability as well as organisational problem solving. Robotic technology is swiftly gaining momentum; therefore, developing an Auto-Robotic technology would improve the quality of end-product. Many companies as evidenced in the reviewed literature do not have crowdsourcing strategy. According to Simula et al. (2013), this is attributed to organisation culture and resource constraints like know-how, money and time. These issues can be addressed if value co-creation through social media and crowdsourcing is prioritised by the top management. Some studies such as Singh et al. (2013) and Vulavala and Ulmer (2014) pointed out that robotic technologies provide accuracy and speed, which cannot be achieved by human labour. Robotics technologies are crucial for automakers because they reduce scrap and operating costs and most importantly, they improve the flexibility of the company for future changes. The capabilities of robotics are progressively increasing; therefore, developing the Auto-Robotic technology will not only improve accuracy at Iveco but also acceleration and speed of production. The automaker needs to utilise the robots for consistency and quality as well as the cost of production. The suggested robotic technology will facilitate flexible manufacturing, wherein different vehicles will be manufactured in the same line with no long delays attributed to tool change. This innovation will enable the company to adjust their products according to the requirements of the customers without incurring extra costs. The innovation will facilitate flexibility in materials and variants given that customers are expecting more individualisation. Currently, the company and many other automakers are using positioning devices and welding guns that rely heavily on a single geometry, which makes it hard to design the frames’ spaces (Peters et al., 2014). The innovation will not only reduce energy consumption but also the processing times as well as tooling requirements. The innovation will optimise the process of Body-in-White (BIW), and would enable Iveco to resolve the current issues associated with the BIW process and improve its production capabilities. Through social media, the company can gather insights useful for designing the BIW. The innovation would enable the company check reachability, detect collisions as well as optimise the time of the cycle. The social media would enable the company to understand applications and markets and be able to design products that meet the customer requirements using the innovation. Technology such as social media according to Groenveld (2007) is a crucial tool for R&D projects since they help in building up the needed technological capabilities. 6.0 Implications This report contributes to the existing literature on innovation and social media by proposing a robotic technology that can enable automakers such as Iveco to improve their production capability and reduce waste. The insights from the literature review can help Iveco managers understand how social media tools can be used for innovation process. By developing the suggested innovation, Iveco would not only achieve higher quality in production processes, but also would manage to reduce the costs of productions. The company would be able to manufacture more parts without defects, but with greater accuracy in a short period of time. Still, the number of studies that have examined the effectiveness of innovating through social media in automotive manufacturing industry is very little. Therefore, this study increases understanding for automakers seeking to use social media for innovation purposes. Evidently, mot companies in this industry have been hesitant to use social media tools because security risks and lack of sufficient time resources. The reviewed studies have proved that social media is an important tool for both innovation and improving productivity. 7.0 Recommendations and Conclusions In view of the reviewed studies, Iveco should pilot the utilisation of social media in product management, innovation as well as product development. More importantly, the company should internally configure its R&D to be able to exploit social media. The managers at the company should coordinate organisational and technological adaptations to harness the interactions of the users on social media for innovation reasons. Social media would enable the Iveco to reach many users and could fuel viral effects amongst persuasive and influential peers; thus, driving commercialisation. The results from literature review suggest that co-creative activities can significantly improve the brand favourability amongst the social media users. Still, Iveco managers must learn to socialise with social media users so as to facilitate knowledge absorption. The company should also examine its innovation readiness by evaluating gains in waste reduction, efficiency and productivity, which could be realised by deploying the innovation as well as the anticipated return on investment. More importantly, the company should examine its ability to leverage the innovation, in terms of implementation, programming as well as maintenance. In conclusion, the report has focussed on how social media within and outside Iveco Australia may be utilised to facilitate innovation, new product development and commercialisation. As mentioned in the report, the technological landscape is changing and organisations have been forced to shift their focus to social media in order to improve their design processes and realise their innovation strategy. Adopting social media would positively influence the company’s innovativeness and enable users to contribute and interact devoid of restrictions. Social media enable users to improve the current ideas incrementally and propose new ideas without the limitations of internal procedures. As evidenced in the literature review, using social media for product and organisational innovation process can result in a sustainable competitive advantage and improved returns on investment. 8.0 References Bendapudi, N. & Leone, R.P., 2003. Psychological Implications of Customer Participation in Co-Production. Journal of Marketing, vol. 67, no. 1, pp.14-28. Bogue, R., 2013. Robotic vision boosts automotive industry quality and productivity. 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