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Global Innovation through Collaboration - Coke Story

In a globalized market, product/service innovation has become a strategic weapon to remain competitive. There could be many reasons behind this mammoth investment in innovations; however the drivers can be summarized as followings-

  • Survive and thrive in a fragmented market
  • Growing customer demand for individualized experience
  • Demand from emerging economies for better offerings
  • Growing competition across borders and market expectations
  • And the last and most important one is the revitalizations and recreation of a Global brand- this is where Coke’s technology driven global innovation program is a classic case worth citing.

Coke story unfolds in recent edition of Information Week (click here for the article). If we look at the success behind such massive exercise, its technology based innovation infrastructure which stands out in bringing the Coke entities across markets in sharing their product/service innovations nitty-gritty. In global competitive landscape, collaboration is the key behind any successful innovation program. With Coke’s massive technology investment in this area, it could bring following changes to the way innovation is addressed-

  • Collaboration and social networking between different markets – US market shared its product/service details with Japan, so also European countries with others. It is quite possible that a product may not work in UK, but might be accepted in Germany. This platform brought such coherence and decisioning to maximum effectiveness.
  • Joint Innovation Program- Multiple markets can take a joint innovation effort which helped reaching to conclusion faster and at a lower cost- imagine the cost had those countries brainstormed separately. And also time to market for any innovative product / service is perceptively low.
  • Co-Creating with Partners and Consumers – Technology platform not only caters to internal entities, but also brought the bottlers, distributors and the consumers to a single pedestal. This has helped Coke getting the partner & consumer perspectives to this innovation exercise. Partners also saw great value in receiving a platform where they can directly dialogue with end users at a little cost (bottlers, distributors decided to share a pie of technology cost also). At the same time, supply chain business processes got standardized to single infrastructure during this innovation drive.
  • Reenergizing the Brand- Certain products in US may have failed, but works fine in Japan and so also certain service to partners may not be good for India, but makes sense to Australia. With a single platform sharing details about each new and existing product / service, it became easy for different markets to grab initiative at no time and took them to market. What resulted then? Coke financial results have been repositioned from US dependent mind-set to global market performance. All these have definitely rejuvenated the brand Coke at adverse market sentiments in most geography.

As we speak about Coke, nothing can deter the change product innovation has brought to brand TATA in global arena, ranked 6th among the reputation leaders of the world (refer the report from Reputation Institute Global Pulse 2008). Very few will deny the role “Tata Nano” (Rs 1 Lac / USD 2500 approx), the innovative venture from Tata Motors, played in catapulting the brand recognition to this level.
 

Talking about Innovation, can’t forget to mention the new book of Prof C.K. Prahalad and Prof M.S. Krishnan called “The New Age of Innovationwhere they have reinforced on two fundamental principles for continuous business innovation – N=1: “value is based on unique, personalized experiences of consumers” & R=G: “In order to achieve N=1, organizations have to reach Global eco-system to get Resources, not necessarily own them”. Next age innovative companies will have to have above two so that a flexible, resilient business process can be built where enterprise information architecture will work in tandem with managerial competency and behavior. In order to understand more, please listen to Prof Prahalad in conversation with Business Week (Part1, Part2).
 

Being the 14th most reputed organization in the world (refer the report from Reputation Institute Global Pulse 2008), Infosys innovation program reflects most of these above points. To know more about it, read the recent presentation by Balaji Yellavalli in “The National Academies” last Sept.

 

Comments

Interesting. Coca Cola has understood innovation goes far beyond product R&D. Being a business journalist in Europe, I can tell you that the most of European companies still think of innovation only as a scientists' matter. Not as market or business process permanent improvement adjusting to their global ecosystem... There is a huge education work to be done in that field with lot of corporations and managers in Europe (not to mention SMEs).

Thanks Jean for the insight to European market.

Product and service innovation has to be customer centric to be successful, not merely research lab ingenuity which organizations have started embracing in this competitive business environment. However, there are still those who believe that transformational scientific innovation can only be possible in research lab / university environment. Few days back, I had a long discussion with my fellow blogger, Radical Economist, who believes in research lab innovation where he has reinforced on more socialistic environment (no competition) than capitalistic (competitive atmosphere) to have fruitful result. I respect his thought and motive under the aegis of transformational innovation, however he definitely misses the pedestals called – “customer needs” & “resources of global eco-system” which are rightly pointed by Prof Prahalad.

Besides collaboration, I strongly believe diversity plays an important role in promulgating innovation culture in organizations. This point has been well highlighted by Susanna Justesen very recently.

We relate the manifestation of customer needs to product/service innovations a lot; however the road to success does not end there. The success of such manifestation can only be visualized if we related the process metrics of product/service innovation program with that of customer satisfaction index- this point I had emphasized before in my previous blog Governance, Risk & Compliance + also.

Please let me know your thoughts on above points.

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