Comparative study two companies in the same area with regard to their innovation activity - Term Paper Example

of Learning: Comparative Study Two Companies In The Same Area With Regard To Their Innovation Activity Introduction Dong Fang Turbine Co. ltd located in China and Grudfos A/S located in Denmark are two companies operating in the same area of manufacturing as well share similar environmental concerns in their innovative strategies. They are both large firms in their respective countries with over 5000 employees each. The rapid and complex changes in the modern industrial world have resulted to involuntary perspective and approaches to innovation witnessed in the two companies over the years. This paper look at the companies history in relation to innovation, their respective time of entry, the path-dependencies, factors that influenced their optimal entry timing, transition process, and their motivation and management of the companies resistance. To achieve this, the study is going to employ different concepts such as types of innovation model, BCG Growth-Share Matrix, technology S-curve, SWOT analysis, and Porters 5 Force model. Grunfos A/S is a firm that manufactures pumps with its representative companies distributed across the world having more than 20,000 employees. The three major products produced by the company include submersible pumps, circular pumps and centrifugal pumps producing over 19 million pumps annually. The company’s white paper on its measures on changes in climate indicates that innovation remains the core of Grundfos. Dong Fang Turbine Co.ltd on the other had is an enterprise owned by the state with approximated over 13,000 employees and it has over the years developed to become among the top three leading power equipment companies. To get to this position, innovation has been key to the company’s development leading to the coming up of new wind turbine, thermal power and solar power. Grundfos vs Dong Fang Grundfos Departure Point towards Innovation Self regulation in Grundfos has been appreciated as being remarkably exercised and it is deeply committed to the sustainability of the company. Following the fact that the kind of business run by the company remain relevant to the water resources of the world, its innovations have to take into consideration the Corporate Social responsibility (Keeley and Doz 76). The company has committed itself to cut down on their carbon foot print and reduce their emissions of carbon in the entire cycle of both the services and products they produce, cut down on their water consumption using their value chain, produce pumps that are energy efficient, assist the world in adapting to the changes in climate, low carbon economy and water scarcity and facilitate the awareness linking energy, water and climatic changes. This implies that the main challenge to Grundfos innovation strategies is the state environment thus is has to come up with ways of ensuring that all the environmental regulations have been observed at the same time maximize on its profits. The company has adapted well to this challenge and this can be attributed mostly to its traditional proactive to take part in global environmental concerns such as being part of the establishment of A to G energy labeling that was a voluntary exercise, facilitating the production of educational material as well as funding and running researches and campaigns on environmental issues in the media (Keeley and Doz 120). Companies Endeavors Grundfos innovation strategies have been coupled with organizational adjustments, environmental management systems, and endeavors implemented one after the other. It is the Central Service Department of this company that is responsible for the coordination of environmental issues concerns as well as management of the external collaborations. Chain management of environmental products, environmental management in relation to production and the responsibility of corporate social remain the responsibility of this department. In an effort to improve its operation and coordination within different departments within the organization, the company linked its products that are oriented on work with its production related to environmental management (Keeley and Doz 82). This move strengthened the company’s production and also allowed its employees to work and spend time in various production departments. Teams on environmental concerns come up with forums that gave room for the sharing of ideas related to specific issues hence facilitating the coming up of new environmental innovations. This strategy was supported fully and was made possible following the flexible organizational culture that has been characteristic of the company for more than 20 years (Keeley and Doz 50). The culture considers environmental goals and ways of achieving the goals to be dependent on each department. Employee Participation-Implementation Practices The company has come up with several ways of motivating its employee’s participation. This has been made possible through the efforts on the ongoing as well as the visible commitment that runs down the company from top management to motivate its employees to continuously improve its environmental concerns. The recent years have witnessed the company organizing for workshops, environmental teams and innovation camps to have the employees be the main participants in solving company’s issues. The employees in the company are not just allowed to share ideas on change and are also allowed to share ideas on the daily routines of the company. Dong Fang Departure Point towards Innovation Looking at the innovation growth trend since 1970, its growth has been steadily increasing over the years and this has been propelled by the company’s renovating its operations towards the use of old equipment (Keeley and Doz 100). The approach has led to the use of its business of renewable energy like solar power and wind turbine has rapidly developed. The value chain analysis together with the competitive advantage the company enjoys has facilitated the introduction of gears, blades, fabrication and control system as its main business. In relation to solar industry, the choice of the company to concentrate on the production of silicon that is highly purified in its basic industrial chain utilizing polycrystalline silicon as its main resources has led the company to stand out as the only firm that has come up with its own R& D and the polycrystalline silicon production line. The table bellow shows Dong Fangs production levels since 1970. Figure 1. Dong Fang Production (Keeley and Doz 61) Organizational Endeavor The project management system of Dong Fang has been constructed in such a way that it can eliminate any arising barriers between its services and manufacturing. The system offers its project management a tool that is convenient to gather data from different departments, such as manufacturing systems and the data used to come up with rapid response to the customer needs and possible market. The company’s planning department, on the other hand, remains fully aware of the changes in the customer behavior and possible markets and is flexible to adjust its planning in accordance to the market situation. The use of the project management system has ensured that different departments are able to collaborate better. This has also ensured a linkage between employee loyalty, employee satisfaction, customer satisfaction and productivity, customer loyalty, service value and return rates (Keeley and Doz 23). In the company, employee satisfaction is normally served for customer loyalty and satisfaction. Innovation Comparison Grundfos strongest point has been identified to be its strong regulations directed towards sustainable development constantly reflected in the company’s commitment to improving the environment with its environmental management system that has been well implemented. The other strengths of the company includes organizational culture that is loose fitting ensuring flexible communications in its departments and employee participation high rates, its strategy on collaborations with its external stakeholders like customers and suppliers and its pro-active influence on the environmental policies and regulations. The above strengths have led to the company to stand out as a leading firm in the pump market. Dong Fang among the two companies is less concerned in having its innovations strategies comply with the environmental standards. Its innovation strategies were directed towards self-regulation, good relationship with the government as well as universities and other institutions involved in research. A common innovation employed by these two companies’ is the collaboration with stakeholders from outside on their respective product chain like customers and suppliers. However, the collaboration differs from one company to the other as in Dong Fang, the central government is its main collaborator as it plays a key role in protecting as well as pushing on its practices and concepts on renewable energy. Grundfos on the other hand has developed a proactive interaction with EPAs and NGO’s. Grundfos has put environmental concerns as it main property while Dong Fang has its renewable energy business as it main line of operation (Keeley and Doz 89). The two companies have assumed different innovation paths despite being outstanding companies in their respective countries. Dong Fang company entered into the renewable energy business in 2006 while Grundfos begun its innovation in the 1990’s way before Dong Fang thus it is expected that the practices and concepts employed by Grundfos are way ahead of Dong Fang (Keeley and Doz 123). Grundfos practices and concepts have been induced by the company’s strong self regulation while those of Dong Fang have been induced by the market pressure and central government forces. Grundfos internal innovation structure evaluates the environmental performance of the suppliers as it educates the same suppliers through offering environmental information. The company has also included incentives in its strategies to encourage its suppliers to come up with green initiatives. Considering its R&T department in relation to customers interaction, Close contacts with customers as well as technological scans are the company’s strategies to remain informed about the requirements of the customers (Keeley and Doz 92). Grundfos has maintained constant communication with its markets and customers so as have access to information on radical innovations and incremental development. Dong Fang product chain has a traditional approach of maintaining a proactive interaction with power equipment manufacturing firms globally for business corporation and technological import. The company has also a strong focus on its customers. Its marketing department has maintained a close interaction especially on customer’s demands. Its planning department has been assigned the role of collaborating with its customers on raw material purchase, various accessories planning, production procedure implementation and products delivery. The role of the customer service department is after- sale services. Conclusion Innovation activities entail different practices and concepts within a company. By using different concepts, this paper has managed to compare two companies, Dong Fang and Grundfos is relation to their innovation activities. Grundfos innovation activities have been embodied in its entire operation and are mainly associated with its self regulation strength, environmental coordination, environmental concerns, proactive strategies and collaborations with the public and government towards strict environmental regulations. Dong Fang innovation activities are centered on the company sustainability, organization adjustments, employee’s satisfaction and customer evaluation. Grundfos has remained in the market for a longer time following its close interaction with its stakeholders in relation to its product chain hence being among the first to get new innovation ideas on products, production and services. Dong Fang core R&D implementation has maintained its collaboration with stakeholders such as universities, the government and other research institutions ensuring that the company has maintained its strong supply role in the market. Work Cited Keeley, Wilson & Doz, Yves. Managing Global Innovation: Frameworks for Integrating Capabilities around the World. Boston: Harvard Business Review Press, 2012. Print Read More