Source:Organizational Innovation: A Meta-Analysis of Effects of Determinants and Mod...
Damanpour, Fariborz
Academy of Management Journal; Sep 1991; 34, 3; ABI/INFORM Global
The meta-analysis provides an opportunity to compare and evaluate the effectiveness of each moderator in distinguishing the relationship between the organizational variables and innovation.
Moderators effect on organizational innovation.
Types of organization have following effects on organizational innovation:
Manufacturing is positively correlated with specialization, formalization and negatively related to centralization and vertical differentiation. For service organization moderators have positive effect for specialization, managerial attitude toward change and vertical differentiation and negative effect on formalization, centralization. For non-profit org moderators have positive effects for specialization, managerial attitude toward change and non-significant for functional differentiation. For profit org moderators have positive effect for specialization, functional differentiation and formalization and have negative effect for centralization and non-significant for managerial attitude toward change.
In case of types of innovation administrative innovation is positively related to specialization, functional differentiation, professionalization, external communication and vertical differentiation and negatively related to centralization and non-significant for formalization. Technical innovation is positively related to specialization, functional differentiation, professionalization, external communication and negatively related to centralization and non-significant for formalization and vertical differentiation. Product innovation is positively related to specialization, formalization, technical knowledge resources and negatively related to centralization and non-significant for professionalization. process innovation is positively related to specialization, professionalization, formalization, technical knowledge and non-significant for centralization. Radical innovation is positively related to specialization, professionalization, technical knowledge resources, external communication and non-significant for formalization, centralization and managerial attitude toward change.
Incremental innovation have positive effect on specialization, professionalization, managerial attitude toward change, technical knowledge resources, external communication and non-significant for centralization. In case of stages of adoption initial stage have positive effect on professionalization and external communication and negative for functional differentiation, formalization and centralization. Implementation stage have positive effect on specialization, functional differentiation, professionalization and external communication and negative effect on centralization and non-significant for formalization. In case of scope of innovation low scope have positive effect on specialization, centralization and managerial attitude toward change and non-significant for professionalization and formalization. High scope have positive effect on specialization, professionalization and managerial attitude toward change and negative effect on formalization and centralization.
By identifying the statistically significant and non-significant determinants of innovation.
This study illustrated the role of a moderator the innovation research has seldom considered explicitly. When the study is divided into two subgroups of low and high innovation scope, the high subgroup showed considerably stronger relationship with specialization, professionalization, formalization and centralization, all the directions suggested by theory.
Studies of large number of innovations of different types and radicalness over time will require new ways of designing and conducting innovations or sets of innovations of same type of groups of related innovations could help link innovativeness to organizational effectiveness. establishing such a link is necessary for expanding the scope of organizational innovation research to include evaluation of the consequences of innovation such studies however should be longitudinal and multidimensional and will require substantial resources and collaboration efforts among researchers conducting complementary research projects.
Saturday, September 27, 2008
Saturday, September 20, 2008
Improving Innovation Productivity in the Consumer Packaged Goods Industry
Improving Innovation Productivity in the Consumer Packaged Goods Industry
Authors
Joel Barbier
Mary de Wysocki
Steve Du Mont
Sharon Finke
Shaun Kirby
James Macaulay
Mike McLaughlin
Waseem Sheikh
Jon Stine
Ronald van Zanten
Cisco Internet Business Solutions Group (IBSG)
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
White Paper
Overview
Successful innovation is critically important to the consumer packaged goods (CPG) industry and will largely define winners and losers. The rapidly growing phenomenon of Internet-based, interactive, collaborative communication has created an opportunity for the CPG industry to shift from a traditional, linear process to one that creates a virtualized innovation process that originates from, and centers on, the consumer.
At present, the innovation process for the CPG industry is driven mainly by existing business models: internal research and development, contemporary industry HR practices, and internal IT capabilities. The inability to challenge and change existing, traditional processes and cultural values leads to seriously inert organizations. These organizations currently are obtaining unacceptable results from innovation.
Today’s consumer-centric world requires businesses to reassess innovation initiatives, balancing investment across technology, process, and cultural change. Going forward, significantly higher rates of success will be found through the implementation of an Innovation Execution Framework, which consists of three elements:
• Consumer Insight Network: Internet-based social network that encourages and enables consumer-originated, interactive content devoted to issues relevant to CPG brand categories.
• Open Innovation Network: An open-source, Internet-based, social network that encourages and enables interaction aimed at developing ideas, solving problems, or formulating disruption opportunities.
• Operational Agility Network: Internet-based, collaborative network that overlaps and loops through the other networks to add knowledge and improve responsiveness.
Innovation Through Collaboration
Innovation can be accelerated only if an organization is able to implement multidimensional mass collaboration. This means simultaneous downstream collaboration with retailers and customers, upstream collaboration with vendors, horizontal collaboration internally, and collaboration with other ecosystem partners and outside communities of common interest, including freelance experts and academicians.
In order to change the outcome, the industry needs to transform its approach by including Web 2.0 technologies and processes that achieve higher results. Figure 1 demonstrates a traditional linear process (from sensing through commercializing), surrounded by Web 2.0 capabilities and the requisite architecture, which provide exceptional consumer insight and a pathway for collaborative change.
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Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Figure 1. Main Elements of the Innovation Execution Framework
Source: Cisco IBSG, 2007
Innovation Failures Currently Outnumber Successes
The CPG industry is responsible for approximately US$3.4 trillion in business worldwide. According to Deloitte, industry executives expect revenue from new product introductions to account for 34 percent of 2007 revenue, up from 2 percent in 1998. This means $1.15 trillion in 2007 revenue will be driven by new products.
In 2005, CPG companies introduced 156,125 new products to the market. Only 4 percent of these products, however, achieved annual sales of more than $50 million. Roughly 80 percent of the products achieved annual sales of $10 million or less. Estimates of new product innovation failures range from 53 to 86 percent.
Looking globally, emerging markets represent an enormous opportunity for established CPG companies, but cultural preferences, the small percentage of consumers reached by modern retail, and daunting distribution and logistical challenges will have a negative effect on immediate sales growth projections in both emerging and developed markets.
IT Capabilities Are Insufficient
The IT capabilities needed to rapidly form and expand new networks are lacking, creating frustration and an inability to execute. CPG companies typically spend 1 to 3 percent of revenue on IT, and much of that supports traditional linear and internal processes. Collaboration, the ability to harness features of Web 2.0, and extension to key stakeholders (consumers, academia, and partners) are key differentiators in capturing the value of the overall Innovation Execution Framework.
Increased R&D Spending Does Not Necessarily Help
A 2005 Booz Allen Hamilton study showed that unlike other industries, such as healthcare, technology, and process manufacturing, increased research and development spending for CPG products did not correlate to increased results. It is estimated that only 4 percent of new consumer products generated by corporate R&D yield significant results. Foundational NetworkUnified CommunicationsCollaboration ApplicationsSenseGenerateSelectDevelopCommercializeOperational AgilityNetworkConsumer InsightNetworkOpen InnovationNetwork** Unified Communications employs voice, video, data, and mobility products that enable businesses to share information more quickly and effectively, improving productivity and reducing costs.Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
White Paper
3
The Solution
Moving to a Networked Process
CPG companies need to create and effectively manage "networked chaos," which is a fluid environment that encourages and enables consumer-originated ideas, as well as ideas from professional stakeholders. Networks can be small and short in duration, built around a disruptive technology, or they can be large and ongoing, creating a strong and sustainable link with consumers and key stakeholders on a global basis. Ongoing conversation and insight will spawn mini-networks that can germinate ideas, support collaboration on key topics, and promote virtual, global, rapid product development. The consumer, passively or actively, is at the heart of these networks and is integral to their success. The key is to be able to construct these networks rapidly, expand them at will, and fuel them with relevant technologies so that significant value is derived.
Simply attempting to bolt on the required collaboration, communication, and Web 2.0 capabilities and technologies to existing infrastructure often does not work. There is too large a gap in capability and agility within the internal environment. To achieve success, it is fundamental to build a solid, robust, and flexible network infrastructure that then can function as the platform for future business models.
The creation of these networks will improve innovation productivity dramatically. In some cases, this consumer-centric and networked approach will replace a traditional, internal, linear model. In other cases, it might be used to complement traditional models.
It is entirely possible to achieve a 25 percent improvement in CPG innovation productivity by reducing the total number of product launches within a given year (with subsequent reductions in operating and capital expenses, including research and development) and by increasing the total number of new products that achieve $50 million or more in annual revenues. Through the adoption of the Innovation Execution Framework and requisite processes, the Cisco Internet Business Solutions Group (IBSG) estimates this 25 percent improvement in innovation productivity would add $1.14 billion in annual gross profit to a $10 billion CPG firm (average) and $460 billion in additional value to the global CPG industry.
By incorporating a comprehensive, networked process, CPG companies can achieve significant improvements in product innovation success while dramatically reducing costs associated with this practice.
The Consumer Insight Network
The Consumer Insight Network is the source of inspiration and perceptiveness. The key drivers of innovation are deep observations of consumer behaviors and needs, not existing assets, products, or positioning. Consumer involvement is spontaneous, not structured. The configuration is networked chaos with constant input and feedback, not linear. The corporate attitude is one of "inviting the consumer in."
Key Elements
Interactive content: Internet-based social networks encourage and enable consumer-originated, interactive content devoted to issues relevant to CPG brand categories. The content can emerge from blogs, chat rooms, podcasts, personal videos, advisory and focus groups, special events for network members, and 1:1 real-time specialist and advisory communication. Such interactive content, not limited to targeted consumers but open to those of common interest in the category, can produce real-time insight into:
• Behavioral usage models (how I wash my hair in the morning)
• Trends and fashions (which hair colors and styles are fashionable or not)
• Media consumption and time expenditure (what I watch or listen to, free time, and so forth)
Studying consumer-originated, interactive content provides CPG companies with deeper and more accurate market segmentation. This, in turn, provides the opportunity to discover previously unknown niche markets, the creation of new niche markets, and extension of existing product lifecycles (see Figure 2). The acquisition of new behavioral insights helps drive early identification of new, fast-growing "tornado" markets and new category opportunities.
Consumer-originated feedback: The second important element of the Consumer Insight Network is that Internet-based social networks can encourage consumers and shoppers to offer feedback to CPG industries. This feedback provides ideas and product proposals; marketing promotion concepts in support of product innovation; and critical information for the corporate category community, such as women’s health, men’s personal care, or children’s snack foods.
Procter & Gamble has applied Innovation Execution Framework concepts and doubled its innovation success rate. P&G increased its innovation productivity by 60 percent due to a reduction in internal R&D from 4.8 percent in 2000 to 3.4 percent today. P&G is targeting 50 percent external innovation by 2010.
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Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Figure 2. Key Elements of the Consumer Insight Network
Source: Cisco IBSG, 2007
Consumer Insight Network at Work: Starwood Hotels and Resorts Worldwide, Inc.
Writing as the "Starwood Lurker," Starwood Customer Services Coordinator William R. Sanders participates in message boards and actively engages consumers. The result: Sanders is able to increase company knowledge and, ultimately, create stronger customer loyalty by tracking consumer comments and buzz on relevant message boards, forums, and rating sites. Since November 2000, Sanders has made more than 12,000 posts to FlyerTalk, the "world’s most popular frequent flyer community." Notable is the transparency with which Sanders does this, adding to his credibility on the board as a customer advocate.
The Open Innovation Network
A solution-oriented Open Innovation Network incorporates key learnings from the Consumer Insight Network for idea selection and development. It brings ideas into a virtual or physical Innovation Lab, providing rapid assimilation and high-tech enablement. Specific consumers or consumer groups may be invited in to ensure their needs are a focus throughout the process. Or the consumer insight group may be tasked with validation, testing, and collaboration, not as key stakeholders in the Open Innovation Network, but as auxiliary members. The primary purpose of the Open Innovation Network is to harness the scope and reach of the Internet for open-source ideas, and to assemble networks to act on those ideas quickly.
White PaperDeeper Market Segmentation• Find Niche Markets• Create Niche Markets• Extend Product LifecyclesNew Behavioral Insights• Reduce Product Introduction Failures• Minimize Failed-Product Impact• Identify "Tornado" Markets First• Create New Categories FirstSocial NetworksBuddy ListsBlogs-Chat-VoteAdvisory GroupsMember EventsAny Device AnywhereConsumerInsightNetworkYour Color • DesignYour Name • ProductPersonalizationLoyalty Rewards1:1 ConsultationGamingVirtual ShoppingVirtual Product TestingVirtual Living
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Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Key Elements
Consumer open-source product idea development: Internet-based networks encourage and enable consumer-originated open-source product idea development. Open source is not just a software development idea. In the context of the CPG industry, it can foster continuous innovation and improvement, create niche opportunities, and bind developers to the brand and the opportunity.
Professional open-source product idea development: Similar to consumer-generated open-source development, Internet-based networks can encourage and enable professional brand stakeholders and independent researchers to be involved in product idea development. Suppliers have a major stake in CPG innovation productivity success. Technology companies, such as HP, Intel, and Google, use worldwide networks of university research labs that are advancing the state of the art in areas of strategic importance.
New IP protection practices: New intellectual property (IP) protection practices are emerging rapidly. These practices should be used in the CPG industry. Companies may not always need to own all the IP, or employ all of the people that contribute to their innovation web. For this to work, companies must add value to any IP acquired on the open market, and will need to make the final decisions, ask the right questions, draw up strategies, source and analyze external inputs, and commercialize and distribute the right products.
Innovation Labs: At the heart of the Open Innovation Network is the Innovation Lab, a virtual or physical "always on" room (see Figure 3). This allows rapid assimilation and collision of inputs from the Consumer Insight Network, functional groups, professional stakeholders, partners, suppliers, and so forth. The success of the Innovation Lab is built upon a high degree of technological support. Technologies required to support the Innovation Lab include high-tech definition and video enablement (desktop; videoconferencing; Webconferencing; virtual white boarding; knowledge bases with secure, real-time communications such as e-mail, chart, intermodal, instant messaging, blogs, and so on) and strong authentication and authorization for protection of IP.
Figure 3. Key Elements of the Open Innovation Network
Source: Cisco IBSG, 2007Speed to Innovation• Tap External Stakeholders• Lower Internal R&D Costs• Capture Early MarginsSpeed to Innovation Productivity• Fail Quick, Fail Cheap• Fix Problems Rapidly• New Sources of RevenueCo-CreationConsumer-Created ProductsConsumer-Directed ProductsOpen SourceIdea MarketplacesR&D for HirePatent SellingProblem SolvingDisruptive ForcesVirtual POCProduct/Packaging TestingExperience TestingConsumer FeedbackInnovation Lab
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Open Innovation Network at Work: InnoCentive
InnoCentive provides a network of 80,000 "solvers" in 173 countries. This community tackles research problems for P&G, Boeing, DuPont, and 30 other companies. Some world-class companies also are offering financial awards for solutions to their scientific challenges. At P&G, for example, outside scientific networks contribute 35 percent of new products, up from 20 percent three years ago. Sales are up 40 percent per R&D staff member.
The Operational Agility Network
While the focus of this paper is on the first two components of the Innovation Execution Framework, it is not because the Operational Agility Network is less important. In fact, it is paramount to successful execution because getting new ideas into the marketplace quickly (product innovation) leads to positive business results regarding consumer-requested products.
Creating successful Operational Agility Networks requires physical changes to the manufacturing environment and is dependent on tight integration with other networks. Operational Agility Networks focus on driving short-cycle production and quick turnaround for line changes that allow CPG organizations to tie in point-of-sale (POS) data directly with production schedules. It also provides enterprise-wide visibility of inventory, enables daily adjustments to sourcing material, and automates promotional feeds to adjust production schedules.
The Operational Agility Network is a wide-ranging topic that is discussed, in greater detail, in additional white papers. For more in-depth analysis of the Operational Agility Network, please see the following Cisco papers: "Connected Manufacturing" (2006) and "Consumer-Driven Replenishment: Extending Consumer Sensing to Drive the Retail Demand Chain" (2005).
Operational Agility Network at Work: Boeing
With Boeing operating as final assembler—coordinating 132 structural and systems partners spread around the globe—two processes were critical: Boeing needed to secure the critical component for composites, titanium, and then make it available to its supply partners. In addition, demand and supply needed to be synchronized across multiple tiers so key components would arrive at Boeing’s Washington facility on time, as needed. Boeing implemented Exostar—which provides a single point of connection for electronic security, commerce, and collaboration—to handle supply management duties, manage the complete order and returns lifecycle process across multiple tiers, and track consumption and replenishment for Boeing’s Partner Managed Inventory program. The system monitors events and process exceptions against the master schedule using synchronized, time-sequenced demand signals for all partners.
White Paper
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Innovation Execution Framework Architecture
Achieving innovation productivity requires an architecture that accommodates the capabilities described above, thus creating a "borderless" enterprise. Aligning the evolution of the architecture with the company’s framework priorities can drive an investment commensurate with a calculated ROI. For instance, implementing a Consumer Insight Network would align with specific IT investments as opposed to an Open Innovation Network. The full architecture is highlighted in Figure 4.
Figure 4. Innovation Execution Framework Architecture
Source: Cisco IBSG, 2007
Conclusion
In business, there is nothing more difficult to plan, or more challenging to manage, than the implementation of new and innovative systems. Yet, the success rate of current innovations tells us that fundamental changes must be made. It is not sustainable to continue on a course where product innovation failure rates can reach 86 percent. Some level of failure rate is desired to encourage risk taking, but successful innovation requires a more balanced portfolio.
Rapidly emerging Web 2.0 capabilities, coupled with an Innovative Execution Framework, are enabling a new wave of consumers and employees who are using cutting-edge media services to communicate and collaborate effectively. Successful organizations will be those that learn how to harness and develop members of this new generation into leaders of change and sources of exceptional consumer insights. These organizations will create unparalleled opportunities to succeed in a new, more complicated global environment. Strong execution capability is essential for success and requires a balanced investment focus on information technology, business process, and controlled cultural change. It requires rethinking traditional, hierarchical, structured methods in a new, dynamic, and consumer-centric world.ContentManagementWebcastingWebconferencingVideoconferencingAudioconferencingChatWikiPush to TalkBlogData CaptureContentCo-browsingExpert LocatorServiceCisco UnifiedPresenceStorage AreaNetworkCall CenterTechnologyDigital VideoRecorderApplication and ContentNetworking SystemSecure, Robust, Flexible,Virtual InfrastructureCollaborationVirtual WorldWebExSecond Life InfrastructureRich Internet Application(RIA) Web 2.0 ServerAnalytics andReportingPatternMiningBusiness IntelligenceDigitalMediaManagerCisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
White Paper
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Appendix
Following is an overview of how estimates within this paper were developed.
The opportunity arises from 1) cost takeout and 2) revenue-growth potential.
1) Cost
Cisco research into the income statements of leading revenue-growth firms shows that a typical large manufacturer spends approximately the equivalent of 2 percent of revenues on R&D annually. Research from Mintel revealed that approximately 96 percent of new CPG product introductions fail to achieve "significant" success, implying a 4 percent "hit" rate. A recent study from Deloitte found that new product introductions account for 34 percent of manufacturers’ revenue growth. Cisco estimates that CPG manufacturers spend the equivalent of 16 percent of annual revenue on product promotions and advertising. A recent report from Forrester Research estimates that 56 percent of CPG products end in failure (for the purposes of this analysis, Cisco has used a more conservative estimate of 50 percent failure).
The equation for the cost opportunity (wasted R&D investments), therefore, is:
R&D Productivity Gap + Promotions Productivity Gap
(Revenue x .02 x .96) (Revenue x .34 x .16 x .5)
2) Revenue
Assuming a 1 percent improvement in "hit" rates for new CPG products (reaching 5 percent, up from the current estimate of 4 percent) gives rise to the following equation for revenue opportunity:
(Revenue x .34 x .25)
Combining both the cost and revenue elements, and applying these assumptions to the $3.4 billion CPG industry globally, and to a $10 billion CPG firm, yields total opportunities of $456 billion (at the industry level) and $1.14 billion (at the firm level).
More Information
The Cisco Internet Business Solutions Group (IBSG), the global strategic consulting arm of Cisco, helps Global Fortune 500 companies and public organizations transform the way they do business—first by designing innovative business processes, and then by integrating advanced technologies into visionary roadmaps that improve customer experience and revenue growth.
For further information about IBSG, visit http://www.cisco.com/go/ibsg
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©2007 Cisco Systems, Inc. All rights reserved. Cisco, the Cisco logo, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document or Website are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. (0705R)
C11-408821-01 0707
Authors
Joel Barbier
Mary de Wysocki
Steve Du Mont
Sharon Finke
Shaun Kirby
James Macaulay
Mike McLaughlin
Waseem Sheikh
Jon Stine
Ronald van Zanten
Cisco Internet Business Solutions Group (IBSG)
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
White Paper
Overview
Successful innovation is critically important to the consumer packaged goods (CPG) industry and will largely define winners and losers. The rapidly growing phenomenon of Internet-based, interactive, collaborative communication has created an opportunity for the CPG industry to shift from a traditional, linear process to one that creates a virtualized innovation process that originates from, and centers on, the consumer.
At present, the innovation process for the CPG industry is driven mainly by existing business models: internal research and development, contemporary industry HR practices, and internal IT capabilities. The inability to challenge and change existing, traditional processes and cultural values leads to seriously inert organizations. These organizations currently are obtaining unacceptable results from innovation.
Today’s consumer-centric world requires businesses to reassess innovation initiatives, balancing investment across technology, process, and cultural change. Going forward, significantly higher rates of success will be found through the implementation of an Innovation Execution Framework, which consists of three elements:
• Consumer Insight Network: Internet-based social network that encourages and enables consumer-originated, interactive content devoted to issues relevant to CPG brand categories.
• Open Innovation Network: An open-source, Internet-based, social network that encourages and enables interaction aimed at developing ideas, solving problems, or formulating disruption opportunities.
• Operational Agility Network: Internet-based, collaborative network that overlaps and loops through the other networks to add knowledge and improve responsiveness.
Innovation Through Collaboration
Innovation can be accelerated only if an organization is able to implement multidimensional mass collaboration. This means simultaneous downstream collaboration with retailers and customers, upstream collaboration with vendors, horizontal collaboration internally, and collaboration with other ecosystem partners and outside communities of common interest, including freelance experts and academicians.
In order to change the outcome, the industry needs to transform its approach by including Web 2.0 technologies and processes that achieve higher results. Figure 1 demonstrates a traditional linear process (from sensing through commercializing), surrounded by Web 2.0 capabilities and the requisite architecture, which provide exceptional consumer insight and a pathway for collaborative change.
1
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
2
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Figure 1. Main Elements of the Innovation Execution Framework
Source: Cisco IBSG, 2007
Innovation Failures Currently Outnumber Successes
The CPG industry is responsible for approximately US$3.4 trillion in business worldwide. According to Deloitte, industry executives expect revenue from new product introductions to account for 34 percent of 2007 revenue, up from 2 percent in 1998. This means $1.15 trillion in 2007 revenue will be driven by new products.
In 2005, CPG companies introduced 156,125 new products to the market. Only 4 percent of these products, however, achieved annual sales of more than $50 million. Roughly 80 percent of the products achieved annual sales of $10 million or less. Estimates of new product innovation failures range from 53 to 86 percent.
Looking globally, emerging markets represent an enormous opportunity for established CPG companies, but cultural preferences, the small percentage of consumers reached by modern retail, and daunting distribution and logistical challenges will have a negative effect on immediate sales growth projections in both emerging and developed markets.
IT Capabilities Are Insufficient
The IT capabilities needed to rapidly form and expand new networks are lacking, creating frustration and an inability to execute. CPG companies typically spend 1 to 3 percent of revenue on IT, and much of that supports traditional linear and internal processes. Collaboration, the ability to harness features of Web 2.0, and extension to key stakeholders (consumers, academia, and partners) are key differentiators in capturing the value of the overall Innovation Execution Framework.
Increased R&D Spending Does Not Necessarily Help
A 2005 Booz Allen Hamilton study showed that unlike other industries, such as healthcare, technology, and process manufacturing, increased research and development spending for CPG products did not correlate to increased results. It is estimated that only 4 percent of new consumer products generated by corporate R&D yield significant results. Foundational NetworkUnified CommunicationsCollaboration ApplicationsSenseGenerateSelectDevelopCommercializeOperational AgilityNetworkConsumer InsightNetworkOpen InnovationNetwork** Unified Communications employs voice, video, data, and mobility products that enable businesses to share information more quickly and effectively, improving productivity and reducing costs.Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
White Paper
3
The Solution
Moving to a Networked Process
CPG companies need to create and effectively manage "networked chaos," which is a fluid environment that encourages and enables consumer-originated ideas, as well as ideas from professional stakeholders. Networks can be small and short in duration, built around a disruptive technology, or they can be large and ongoing, creating a strong and sustainable link with consumers and key stakeholders on a global basis. Ongoing conversation and insight will spawn mini-networks that can germinate ideas, support collaboration on key topics, and promote virtual, global, rapid product development. The consumer, passively or actively, is at the heart of these networks and is integral to their success. The key is to be able to construct these networks rapidly, expand them at will, and fuel them with relevant technologies so that significant value is derived.
Simply attempting to bolt on the required collaboration, communication, and Web 2.0 capabilities and technologies to existing infrastructure often does not work. There is too large a gap in capability and agility within the internal environment. To achieve success, it is fundamental to build a solid, robust, and flexible network infrastructure that then can function as the platform for future business models.
The creation of these networks will improve innovation productivity dramatically. In some cases, this consumer-centric and networked approach will replace a traditional, internal, linear model. In other cases, it might be used to complement traditional models.
It is entirely possible to achieve a 25 percent improvement in CPG innovation productivity by reducing the total number of product launches within a given year (with subsequent reductions in operating and capital expenses, including research and development) and by increasing the total number of new products that achieve $50 million or more in annual revenues. Through the adoption of the Innovation Execution Framework and requisite processes, the Cisco Internet Business Solutions Group (IBSG) estimates this 25 percent improvement in innovation productivity would add $1.14 billion in annual gross profit to a $10 billion CPG firm (average) and $460 billion in additional value to the global CPG industry.
By incorporating a comprehensive, networked process, CPG companies can achieve significant improvements in product innovation success while dramatically reducing costs associated with this practice.
The Consumer Insight Network
The Consumer Insight Network is the source of inspiration and perceptiveness. The key drivers of innovation are deep observations of consumer behaviors and needs, not existing assets, products, or positioning. Consumer involvement is spontaneous, not structured. The configuration is networked chaos with constant input and feedback, not linear. The corporate attitude is one of "inviting the consumer in."
Key Elements
Interactive content: Internet-based social networks encourage and enable consumer-originated, interactive content devoted to issues relevant to CPG brand categories. The content can emerge from blogs, chat rooms, podcasts, personal videos, advisory and focus groups, special events for network members, and 1:1 real-time specialist and advisory communication. Such interactive content, not limited to targeted consumers but open to those of common interest in the category, can produce real-time insight into:
• Behavioral usage models (how I wash my hair in the morning)
• Trends and fashions (which hair colors and styles are fashionable or not)
• Media consumption and time expenditure (what I watch or listen to, free time, and so forth)
Studying consumer-originated, interactive content provides CPG companies with deeper and more accurate market segmentation. This, in turn, provides the opportunity to discover previously unknown niche markets, the creation of new niche markets, and extension of existing product lifecycles (see Figure 2). The acquisition of new behavioral insights helps drive early identification of new, fast-growing "tornado" markets and new category opportunities.
Consumer-originated feedback: The second important element of the Consumer Insight Network is that Internet-based social networks can encourage consumers and shoppers to offer feedback to CPG industries. This feedback provides ideas and product proposals; marketing promotion concepts in support of product innovation; and critical information for the corporate category community, such as women’s health, men’s personal care, or children’s snack foods.
Procter & Gamble has applied Innovation Execution Framework concepts and doubled its innovation success rate. P&G increased its innovation productivity by 60 percent due to a reduction in internal R&D from 4.8 percent in 2000 to 3.4 percent today. P&G is targeting 50 percent external innovation by 2010.
4
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Figure 2. Key Elements of the Consumer Insight Network
Source: Cisco IBSG, 2007
Consumer Insight Network at Work: Starwood Hotels and Resorts Worldwide, Inc.
Writing as the "Starwood Lurker," Starwood Customer Services Coordinator William R. Sanders participates in message boards and actively engages consumers. The result: Sanders is able to increase company knowledge and, ultimately, create stronger customer loyalty by tracking consumer comments and buzz on relevant message boards, forums, and rating sites. Since November 2000, Sanders has made more than 12,000 posts to FlyerTalk, the "world’s most popular frequent flyer community." Notable is the transparency with which Sanders does this, adding to his credibility on the board as a customer advocate.
The Open Innovation Network
A solution-oriented Open Innovation Network incorporates key learnings from the Consumer Insight Network for idea selection and development. It brings ideas into a virtual or physical Innovation Lab, providing rapid assimilation and high-tech enablement. Specific consumers or consumer groups may be invited in to ensure their needs are a focus throughout the process. Or the consumer insight group may be tasked with validation, testing, and collaboration, not as key stakeholders in the Open Innovation Network, but as auxiliary members. The primary purpose of the Open Innovation Network is to harness the scope and reach of the Internet for open-source ideas, and to assemble networks to act on those ideas quickly.
White PaperDeeper Market Segmentation• Find Niche Markets• Create Niche Markets• Extend Product LifecyclesNew Behavioral Insights• Reduce Product Introduction Failures• Minimize Failed-Product Impact• Identify "Tornado" Markets First• Create New Categories FirstSocial NetworksBuddy ListsBlogs-Chat-VoteAdvisory GroupsMember EventsAny Device AnywhereConsumerInsightNetworkYour Color • DesignYour Name • ProductPersonalizationLoyalty Rewards1:1 ConsultationGamingVirtual ShoppingVirtual Product TestingVirtual Living
5
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Key Elements
Consumer open-source product idea development: Internet-based networks encourage and enable consumer-originated open-source product idea development. Open source is not just a software development idea. In the context of the CPG industry, it can foster continuous innovation and improvement, create niche opportunities, and bind developers to the brand and the opportunity.
Professional open-source product idea development: Similar to consumer-generated open-source development, Internet-based networks can encourage and enable professional brand stakeholders and independent researchers to be involved in product idea development. Suppliers have a major stake in CPG innovation productivity success. Technology companies, such as HP, Intel, and Google, use worldwide networks of university research labs that are advancing the state of the art in areas of strategic importance.
New IP protection practices: New intellectual property (IP) protection practices are emerging rapidly. These practices should be used in the CPG industry. Companies may not always need to own all the IP, or employ all of the people that contribute to their innovation web. For this to work, companies must add value to any IP acquired on the open market, and will need to make the final decisions, ask the right questions, draw up strategies, source and analyze external inputs, and commercialize and distribute the right products.
Innovation Labs: At the heart of the Open Innovation Network is the Innovation Lab, a virtual or physical "always on" room (see Figure 3). This allows rapid assimilation and collision of inputs from the Consumer Insight Network, functional groups, professional stakeholders, partners, suppliers, and so forth. The success of the Innovation Lab is built upon a high degree of technological support. Technologies required to support the Innovation Lab include high-tech definition and video enablement (desktop; videoconferencing; Webconferencing; virtual white boarding; knowledge bases with secure, real-time communications such as e-mail, chart, intermodal, instant messaging, blogs, and so on) and strong authentication and authorization for protection of IP.
Figure 3. Key Elements of the Open Innovation Network
Source: Cisco IBSG, 2007Speed to Innovation• Tap External Stakeholders• Lower Internal R&D Costs• Capture Early MarginsSpeed to Innovation Productivity• Fail Quick, Fail Cheap• Fix Problems Rapidly• New Sources of RevenueCo-CreationConsumer-Created ProductsConsumer-Directed ProductsOpen SourceIdea MarketplacesR&D for HirePatent SellingProblem SolvingDisruptive ForcesVirtual POCProduct/Packaging TestingExperience TestingConsumer FeedbackInnovation Lab
6
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
Open Innovation Network at Work: InnoCentive
InnoCentive provides a network of 80,000 "solvers" in 173 countries. This community tackles research problems for P&G, Boeing, DuPont, and 30 other companies. Some world-class companies also are offering financial awards for solutions to their scientific challenges. At P&G, for example, outside scientific networks contribute 35 percent of new products, up from 20 percent three years ago. Sales are up 40 percent per R&D staff member.
The Operational Agility Network
While the focus of this paper is on the first two components of the Innovation Execution Framework, it is not because the Operational Agility Network is less important. In fact, it is paramount to successful execution because getting new ideas into the marketplace quickly (product innovation) leads to positive business results regarding consumer-requested products.
Creating successful Operational Agility Networks requires physical changes to the manufacturing environment and is dependent on tight integration with other networks. Operational Agility Networks focus on driving short-cycle production and quick turnaround for line changes that allow CPG organizations to tie in point-of-sale (POS) data directly with production schedules. It also provides enterprise-wide visibility of inventory, enables daily adjustments to sourcing material, and automates promotional feeds to adjust production schedules.
The Operational Agility Network is a wide-ranging topic that is discussed, in greater detail, in additional white papers. For more in-depth analysis of the Operational Agility Network, please see the following Cisco papers: "Connected Manufacturing" (2006) and "Consumer-Driven Replenishment: Extending Consumer Sensing to Drive the Retail Demand Chain" (2005).
Operational Agility Network at Work: Boeing
With Boeing operating as final assembler—coordinating 132 structural and systems partners spread around the globe—two processes were critical: Boeing needed to secure the critical component for composites, titanium, and then make it available to its supply partners. In addition, demand and supply needed to be synchronized across multiple tiers so key components would arrive at Boeing’s Washington facility on time, as needed. Boeing implemented Exostar—which provides a single point of connection for electronic security, commerce, and collaboration—to handle supply management duties, manage the complete order and returns lifecycle process across multiple tiers, and track consumption and replenishment for Boeing’s Partner Managed Inventory program. The system monitors events and process exceptions against the master schedule using synchronized, time-sequenced demand signals for all partners.
White Paper
7
Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved. 8
Innovation Execution Framework Architecture
Achieving innovation productivity requires an architecture that accommodates the capabilities described above, thus creating a "borderless" enterprise. Aligning the evolution of the architecture with the company’s framework priorities can drive an investment commensurate with a calculated ROI. For instance, implementing a Consumer Insight Network would align with specific IT investments as opposed to an Open Innovation Network. The full architecture is highlighted in Figure 4.
Figure 4. Innovation Execution Framework Architecture
Source: Cisco IBSG, 2007
Conclusion
In business, there is nothing more difficult to plan, or more challenging to manage, than the implementation of new and innovative systems. Yet, the success rate of current innovations tells us that fundamental changes must be made. It is not sustainable to continue on a course where product innovation failure rates can reach 86 percent. Some level of failure rate is desired to encourage risk taking, but successful innovation requires a more balanced portfolio.
Rapidly emerging Web 2.0 capabilities, coupled with an Innovative Execution Framework, are enabling a new wave of consumers and employees who are using cutting-edge media services to communicate and collaborate effectively. Successful organizations will be those that learn how to harness and develop members of this new generation into leaders of change and sources of exceptional consumer insights. These organizations will create unparalleled opportunities to succeed in a new, more complicated global environment. Strong execution capability is essential for success and requires a balanced investment focus on information technology, business process, and controlled cultural change. It requires rethinking traditional, hierarchical, structured methods in a new, dynamic, and consumer-centric world.ContentManagementWebcastingWebconferencingVideoconferencingAudioconferencingChatWikiPush to TalkBlogData CaptureContentCo-browsingExpert LocatorServiceCisco UnifiedPresenceStorage AreaNetworkCall CenterTechnologyDigital VideoRecorderApplication and ContentNetworking SystemSecure, Robust, Flexible,Virtual InfrastructureCollaborationVirtual WorldWebExSecond Life InfrastructureRich Internet Application(RIA) Web 2.0 ServerAnalytics andReportingPatternMiningBusiness IntelligenceDigitalMediaManagerCisco IBSG Copyright © 2007 Cisco Systems, Inc. All rights reserved.
White Paper
9
Appendix
Following is an overview of how estimates within this paper were developed.
The opportunity arises from 1) cost takeout and 2) revenue-growth potential.
1) Cost
Cisco research into the income statements of leading revenue-growth firms shows that a typical large manufacturer spends approximately the equivalent of 2 percent of revenues on R&D annually. Research from Mintel revealed that approximately 96 percent of new CPG product introductions fail to achieve "significant" success, implying a 4 percent "hit" rate. A recent study from Deloitte found that new product introductions account for 34 percent of manufacturers’ revenue growth. Cisco estimates that CPG manufacturers spend the equivalent of 16 percent of annual revenue on product promotions and advertising. A recent report from Forrester Research estimates that 56 percent of CPG products end in failure (for the purposes of this analysis, Cisco has used a more conservative estimate of 50 percent failure).
The equation for the cost opportunity (wasted R&D investments), therefore, is:
R&D Productivity Gap + Promotions Productivity Gap
(Revenue x .02 x .96) (Revenue x .34 x .16 x .5)
2) Revenue
Assuming a 1 percent improvement in "hit" rates for new CPG products (reaching 5 percent, up from the current estimate of 4 percent) gives rise to the following equation for revenue opportunity:
(Revenue x .34 x .25)
Combining both the cost and revenue elements, and applying these assumptions to the $3.4 billion CPG industry globally, and to a $10 billion CPG firm, yields total opportunities of $456 billion (at the industry level) and $1.14 billion (at the firm level).
More Information
The Cisco Internet Business Solutions Group (IBSG), the global strategic consulting arm of Cisco, helps Global Fortune 500 companies and public organizations transform the way they do business—first by designing innovative business processes, and then by integrating advanced technologies into visionary roadmaps that improve customer experience and revenue growth.
For further information about IBSG, visit http://www.cisco.com/go/ibsg
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©2007 Cisco Systems, Inc. All rights reserved. Cisco, the Cisco logo, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document or Website are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. (0705R)
C11-408821-01 0707
Wednesday, September 17, 2008
Remarks about the class of ENTREPRENEURIAL GROWTH
yesterday I attended the class of entrepreneurial growth. The teaching method of mam varonica is so good. The best thing in the class is teaching session which is very helpful for us to increase our presentation skills. Mam illustrate the teaching session with the local examples which makes the things so easy to understand.
Monday, September 15, 2008
MBA Admission Criteria and an Entrepreneurial Mind-Set: Evidence From “Western” StyleMBAs in India and Thailand
“The successful future strategists will exploit
an entrepreneurial mind-set . . . the
ability to rapidly sense, act, and mobilize,
even under uncertain conditions.”
—McGrath & MacMillan, 2000: xv
In developing and nurturing an entrepreneurial
culture within an organization, Ireland, Hitt, and
Sirmon (2003) suggested that successful leaders
will need to employ an entrepreneurial mind-set
and described the cognitive tasks involved, such
as making sense of opportunities in the context of
changing goals, constantly questioning one’s
“dominant logic” in the context of a changing environment,
and revisiting “deceptively simple
questions” about what we think to be true about
markets and the firm. While these characteristics
are considered desirable qualities in future business
leaders, there is an ongoing debate about whether
business school graduates are well positioned to be
successful managers in today’s competitive environment
(e.g., Feldman, 2005; Mintzberg, 2004; Pfeffer &
Fong, 2002).
Findings:
I agreed with this statement. There are following reasons to agree upon it:
an entrepreneurial mind-set . . . the
ability to rapidly sense, act, and mobilize,
even under uncertain conditions.”
—McGrath & MacMillan, 2000: xv
In developing and nurturing an entrepreneurial
culture within an organization, Ireland, Hitt, and
Sirmon (2003) suggested that successful leaders
will need to employ an entrepreneurial mind-set
and described the cognitive tasks involved, such
as making sense of opportunities in the context of
changing goals, constantly questioning one’s
“dominant logic” in the context of a changing environment,
and revisiting “deceptively simple
questions” about what we think to be true about
markets and the firm. While these characteristics
are considered desirable qualities in future business
leaders, there is an ongoing debate about whether
business school graduates are well positioned to be
successful managers in today’s competitive environment
(e.g., Feldman, 2005; Mintzberg, 2004; Pfeffer &
Fong, 2002).
Findings:
I agreed with this statement. There are following reasons to agree upon it:
- Graduate Management Admissions Test
(GMAT) score and prior work experience is much important for a business graduate. Because if a business gruduate have some work experience he can manage all the things in a proper way. - experience people have mades to hadle critical problems in much better way tahn the fresh graduates.
- If a business gradaute already have work experience he can know and pick the thing quite easily than the fresh graduates.
- As experience made in India and thailand business school which select candidates through GMAT produce much better business leader graduates. They polish their personality and atittudes towards in much better way.
- Experience business graduates have much entrepreneul abilities. From getting proper knowledge and studies they can use them properly and effectively because they have information about the business things so they can impliment the things within no time.
- GMAT and experience is much related to each other. This admission criteria can work most effectively to create successful and entrepreneul mind leaders.
In top business schools and universities GMAT is necessary for getting admission in MBA. In Harward business school GMAT is ompulsary. Admission requirements of London business are as follows.
Admission requirements
Successful candidates will demonstrate the following abilities through their application and essays, the two references and the compulsory face-to-face interview. Please note that only short listed candidates will be interviewed, and selection for interview is at the discretion of the Admissions Team.
Intellectual Capacity
We require a good undergraduate degree or equivalent qualification. However, we may consider candidates who do not have a degree if they have worked in a position with a high level of responsibility. The GMAT is just one of several admission criteria that will be considered in your application. A high score does not guarantee admission, and a below average score does not eliminate a candidate.
Management Potential
We want people who can assume global leadership roles, not people who simply know about business disciplines. We therefore ask for work experience and consider your past performance when assessing your suitability as a future leader. Students in our current class have an average of five years postgraduate work experience. However, please note that admission may be granted to candidates with less than three years work experience if they can present superior academic credentials and evidence of truly outstanding leadership, through their professional and personal experiences.
Personal Motivation & Maturity
The MBA is a demanding experience which can change your life. We look for evidence that participants will be reflective, energetic, mature and realistic as well as ambitious and highly motivated.
Team Skills
We place particular emphasis on working in multicultural groups. We need to be certain that candidates will share in the development of their fellow team members and contribute to the learning environment of the School.
International Exposure
Our MBA is a truly global programme with students from over 70 countries. The students who benefit most are those with an international outlook, or those who can build on existing international exposure.
Language Ability
Our MBA Programme is taught in English. If English is not your native language you will need to take the TOEFL iBT, IELTS or CPE. Please note: this requirement is not compulsory for applicants who have lived in an English speaking country for a minimum of two years, or who have completed a degree conducted exclusively in English for a minimum of two years. Our TOEFL institution code is 0898.
Admission requirement of Hravard Business school are:
To be considered for admission, an applicant must have successfully completed the following:
A degree program at an accredited U.S. four-year undergraduate college/university or its equivalent;
Graduate Management Admission Test (GMAT) exam from a test taken January 1, 2004 or later. The GMAT is a prerequisite for admission;
Test of English as a Foreign Language (TOEFL) or International English Language Testing System (IELTS) from a test taken January 1, 2007 or later, is required for international applicants who attended a non-English-speaking undergraduate university; and
Submission of a complete online application for evaluation by one of the decision round deadlines.
The HBS MBA application itself consists of a number of components you may review on the Written Application page.Top of Page
The Points of disagree:
There are some points on which I disagreed. These are
- Age limit for business graduates
- there must be some relaxation for admission.
Overall Views:
GMAT and experience base admission criteria is much better for an entrepreneul set of mind. This method can help people to show their hidden abilities.
In this reading we investigated the assessments of career attractiveness
by 283 MBA students from India and Thailand,
to reveal the extent to which they had mindsets
that are associated with those believed
necessary to be a successful manager in today’s
economy. We found that an existing selection criterion
for MBA admission—the GMAT—was negatively
associated with the mind-set believed to be
necessary for managerial success. That is, the fastmoving
global economy requires managers to
have an entrepreneurial mind-set, yet we find that
MBA students with higher GMAT scores have
mind-sets that are more averse to work effort and
to risk, and therefore, may discriminate against
applicants with a greater propensity to behave
entrepreneurially. Our findings suggest the need
to consider (potential) students’ mind-sets toward
management to complement existing selection criteria.
We believe that there is more work to be done
in developing such measures but, once validated,
these measures will assist business schools in selecting
a pool of students that can go on to be
successful manage
MBA students with higher GMAT scores have
mind-sets that are more averse to work effort and
to risk, and therefore, may discriminate against
applicants with a greater propensity to behave
entrepreneurially. Our findings suggest the need
to consider (potential) students’ mind-sets toward
management to complement existing selection criteria.
We believe that there is more work to be done
in developing such measures but, once validated,
these measures will assist business schools in selecting
a pool of students that can go on to be
successful managers.
Refernces:
http://www.hbs.edu/mba/admissions/admissionrequirements.html
http://www.london.edu/mba/admission/admissionrequirements.html
How to Start Your Own Business
How to Start Your Own Business
Running your own business is a rewarding but demanding career and life choice. There are many different opinions about how to start a business from writing and researching a detailed business plan to jumping into a passion and trying to make money out of it.
[edit] Steps
Start with an idea. This doesn't have to be a brand new invention or new product. In fact, many successful small businesses have found a way to deliver an existing service more efficiently or economically or have customized an existing product or service.
Put together a business plan. This doesn't require hundreds of pages with thousands of charts. Use the plan to research things like how much you can charge for your product/service, how much it will cost to produce or deliver (include variable & fixed costs), and the size of your potential market (i.e. # of customers). The plan should evaluate your competitors - how many competitors, how strong are they, where are they, how will you compete. The plan should state what is required to enter this market, barriers to entry such as high fixed costs (factories, restaurants) and government regulations that must be met.
Determine if you need financing. Your business plan will include a section on financing. How will you pay the costs to start and run your business? Do you need a bank loan? Use credit cards? Self finance? Also, you'll need to consider how much salary you need to support yourself while starting your business.
Put together your initial marketing plan. Marketing need not cost a fortune. Some businesses require very little. For example, many service businesses such as accounting firms build their practices through word-of-mouth referrals. You can also join free or low-cost associations to build awareness of your small business. Again, your business plan (product, customer, competitor) will help you determine the marketing efforts you need to undertake.
Build your infrastructure early. This doesn't mean build a big factory or a fancy office. It simply means keep accurate customer records, a clean set of updated books and a technology foundation, if necessary. One of the downfalls of many small businesses is that they don't know if they're making or losing money (i.e. the need for a clean set of books). Another downfall is when small business owners try to sell their company years later but lack accurate customer history and customer information. Many times, the customers of a small business are its best asset, and, without the records, the small business can be sold only for salvage.
[edit] Tips
Use free resources. Your local library contains numerous useful references regarding incorporation, writing business plans, marketing, as well as information specific to your industry. The Small Business Association, Chambers of Commerce, AMEX Small Business website, associations for your industry, associations by ethnicity...all of these offer training, materials, networking and sometimes financing. Another good option is SCORE, a group of retired executives who provide business start-up advice.
Recognize that getting your business off the ground will take time. Most businesses don't become profitable right away, so plan for that in your personal life too. You will be making sacrifices to be your own boss.
Running your own business is a rewarding but demanding career and life choice. There are many different opinions about how to start a business from writing and researching a detailed business plan to jumping into a passion and trying to make money out of it.
[edit] Steps
Start with an idea. This doesn't have to be a brand new invention or new product. In fact, many successful small businesses have found a way to deliver an existing service more efficiently or economically or have customized an existing product or service.
Put together a business plan. This doesn't require hundreds of pages with thousands of charts. Use the plan to research things like how much you can charge for your product/service, how much it will cost to produce or deliver (include variable & fixed costs), and the size of your potential market (i.e. # of customers). The plan should evaluate your competitors - how many competitors, how strong are they, where are they, how will you compete. The plan should state what is required to enter this market, barriers to entry such as high fixed costs (factories, restaurants) and government regulations that must be met.
Determine if you need financing. Your business plan will include a section on financing. How will you pay the costs to start and run your business? Do you need a bank loan? Use credit cards? Self finance? Also, you'll need to consider how much salary you need to support yourself while starting your business.
Put together your initial marketing plan. Marketing need not cost a fortune. Some businesses require very little. For example, many service businesses such as accounting firms build their practices through word-of-mouth referrals. You can also join free or low-cost associations to build awareness of your small business. Again, your business plan (product, customer, competitor) will help you determine the marketing efforts you need to undertake.
Build your infrastructure early. This doesn't mean build a big factory or a fancy office. It simply means keep accurate customer records, a clean set of updated books and a technology foundation, if necessary. One of the downfalls of many small businesses is that they don't know if they're making or losing money (i.e. the need for a clean set of books). Another downfall is when small business owners try to sell their company years later but lack accurate customer history and customer information. Many times, the customers of a small business are its best asset, and, without the records, the small business can be sold only for salvage.
[edit] Tips
Use free resources. Your local library contains numerous useful references regarding incorporation, writing business plans, marketing, as well as information specific to your industry. The Small Business Association, Chambers of Commerce, AMEX Small Business website, associations for your industry, associations by ethnicity...all of these offer training, materials, networking and sometimes financing. Another good option is SCORE, a group of retired executives who provide business start-up advice.
Recognize that getting your business off the ground will take time. Most businesses don't become profitable right away, so plan for that in your personal life too. You will be making sacrifices to be your own boss.
The Weird Rules of Creativity
The article which I like more, it is The article which I like more, it is the Weird Rules of Creativity. By breaking all the stereotypes of management decision making the article gave a new insight of the picture.
Points to agree with:
I agree with in the article. I would definitely say that in order to success companies should to some extent break away from old perceptions and see problems in new ways, and therefore break away from the past.By doing this we can change the structure of the organization and set goals which drives us toward leadership of the market. After all this is how the sustainable competitive advantage is reached, i.e., being different from others, pursuing strategies in an innovative and novel way. It was interesting to read that companies although realizing this need for innovativeness do not necessarily put time and effort into it, and prefer to take a more or less smooth path.
I would like to share a practical example which is from the company in which I was working. It’s a pharmaceutical company. The owner of the company wants to increase the production of the company. He hired an army retired person as an admin manager. He has nothing to do except making barriers in every matter of the company. Plant manager wants to improve the equipment of production which gives more production in less time but the admin manager is against this idea he always said there is no need to bring any new equipment our older one is good. There is no need to spend money on new equipment. He was a man having no information about the production but he was so close to the owner of the company. It was an owner based firm. Owner gives much importance to the admin manager’s ideas. The other competitor companies bought that equipment and capture most of the market with fast supply of its products. Now that competitor company is the market leader. If the owner didn’t hire that army retired man then the company can sustain its competitive advantage. Or if he hired a person who is not against the new ideas then the company can also have the same position which it had before. The problem with the army officers in our country is they never like smart persons they always welcome to the stupid persons. Who always say yes against any order. They don't like to be flexible to any matter. They always give orders. They didn't like to listen any word against their order.
Point to disagree with:
I do not quite agree with, to start from the author’s perspective of hiring people, it was mentioned that while hiring rational thinking should be put aside, is it really a good idea just to hire intuitively? Not look at person’s previous experience, or educational backgrounds? I would say it is connected to high risk and needs time. For example, if you need to hire an employee for a particular position, of course you would search for somebody who has appropriate education in the relevant field, this would bring results immediately and the person will know what he/she is supposed to do. On the other hand, to take a risk and hire somebody without previous experience, in the hope that he/she shall be innovative and creative, it is very time consuming and needs finances.
I like to put an example here which is related to above situation. The same company hired a person in Finance Dept as auditor. He was 63 years old man he has much experience in finance field. Finance dept wanted to change the accounting system. They wanted to install latest accounting software. But the auditor said its not good. You should work the same software. There was some problem in the previous software and finance manger have to do some manual work for avoiding errors in the financial statement due to which some very important transactions remain pending and company can't recover the payments in time. The newly hired auditor say do the whole work by manual also. For which company needs to hire more employees because there are 7 employees who cover the whole finance system. If company hire more people then its not good because it increased the cost of the company and require more extra time for recovery which is not beneficial for the company. If the company update the system then its much effective for it to make recovery in time and utilize that finance for the increase in production which is much effective for the company.
In a way if the organization is large enough to afford hiring some extra people, with different backgrounds, giving them some spare time for brainstorming, testing and implementing their ideas, this might work out just fine.
Findings:
This article made me think about rejecting all common sense, “normal” ways of doing things and rational reasoning. Maybe it really is worth trying to put aside well-proven ways and go for a new path, no matter how hard it might be. I have never thought about rewarding failures before, although this article made me think about a saying “one who works is the one committing a mistake”, that is if you do not work, thus, you do not commit mistakes. Only punishing inaction is a very interesting assumption presented in the article, this would really motivate employees to try their best, and not be afraid to fail.
References
Sutton, R. (2001). The Weird Rules of Creativity. Harvard Business Review, September 2001
. By breaking all the stereotypes of management decision making the article gave a new insight of the picture.
Points to agree with:
I agree with in the article. I would definitely say that in order to success companies should to some extent break away from old perceptions and see problems in new ways, and therefore break away from the past. After all this is how the sustainable competitive advantage is reached, i.e., being different from others, pursuing strategies in an innovative and novel way. It was interesting to read that companies although realizing this need for innovativeness do not necessarily put time and effort into it, and prefer to take a more or less smooth path.
I would like to share a practical example which is from the company in which I was working. It’s a pharmaceutical company. The owner of the company wants to increase the production of the company. He hired an army retired person as an admin manager. He has nothing to do except making barriers in every matter of the company. Plant manager wants to improve the equipment of production which gives more production in less time but the admin manager is against this idea he always said there is no need to bring any new equipment our older one is good. There is no need to spend money on new equipment. He was a man having no information about the production but he was so close to the owner of the company. It was an owner based firm. Owner gives much importance to the admin manager’s ideas. The other competitor companies bought that equipment and capture most of the market with fast supply of its products. Now that competitor company is the market leader. If the owner didn’t hire that army retired man then the company can sustain its competitive advantage. Or if he hired a person who is not against the new ideas then the company can also have the same position which it had before.
Point to disagree with:
I do not quite agree with, to start from the author’s perspective of hiring people, it was mentioned that while hiring rational thinking should be put aside, is it really a good idea just to hire intuitively? Not look at person’s previous experience, or educational backgrounds? I would say it is connected to high risk and needs time. For example, if you need to hire an employee for a particular position, of course you would search for somebody who has appropriate education in the relevant field, this would bring results immediately and the person will know what he/she is supposed to do. On the other hand, to take a risk and hire somebody without previous experience, in the hope that he/she shall be innovative and creative, it is very time consuming and needs finances.
In a way if the organization is large enough to afford hiring some extra people, with different backgrounds, giving them some spare time for brainstorming, testing and implementing their ideas, this might work out just fine.
Findings:
This article made me think about rejecting all common sense, “normal” ways of doing things and rational reasoning. Maybe it really is worth trying to put aside well-proven ways and go for a new path, no matter how hard it might be. I have never thought about rewarding failures before, although this article made me think about a saying “one who works is the one committing a mistake”, that is if you do not work, thus, you do not commit mistakes. Only punishing inaction is a very interesting assumption presented in the article, this would really motivate employees to try their best, and not be afraid to fail.
References
Sutton, R. (2001). The Weird Rules of Creativity. Harvard Business Review, September 2001
How to Become an Entrepreneur
An entrepreneur is someone who creates his or her own business. Here's how to become your own boss.
Steps
Think of great ideas. If a great idea comes to you, evaluate if it is realistic. Think of cost, manufacturing time, and popularity. Ask and record if people would actually buy the product. If you don't have an idea yet, it is a good start to think of your target market first. Then brainstorm a list of things like places they shop, things they like, and things you like. Narrow the list down to about three items, keeping cost, manufacturing time, and popularity in mind. Find the easiest, most realistic product.Or, think of a terrible idea. Really, you can't tell if a business idea is great or terrible until you try it in a real marketplace. Years later, the successful ideas are "obviously" good, but when they first began, most people rejected them. Google is one of the most famous examples—"Search is done. Does the world need yet another search engine?"—but many less-spectacular successes have strong arguments against them. There is always a good reason against a good idea. It doesn't really matter how good your initial idea is, because you're going to change it, anyway. "Investors invest in people, not business plans. Early-stage investors know that great people can make a mediocre idea work, but mediocre people can't make a great idea work."—Don Dodge.
Write a business plan. Include details and descriptions, and plan everything out realistically. Take your time and evaluate your product at each section. The sections of a good business plan include:
Product description: develop your product. What will it look like? What materials will you need? Make your product eye-catching.
Market Analysis: Who is your market? Where do they shop? Where are they located?
Competition: Who is your competition? What are their strengths? How will you beat them?
Marketing: How will you market your product? What kind of image do you want to display? Where will you advertise? What is your tagline? What is your packaging like?
Sales: Where will you sell? How will you get your customers to buy? When will you sell? What is your estimated sales forecast?
Manufacturing: How do you make your product? Explain this in detailed steps. What materials do you need to make your product? When and where will you manufacture? What is your COGS (cost of goods sold)?
Finance: how much money do you need to start your business? What is your gross profit?Or, don't write a business plan. A business plan is a work of fiction, anyway. If you don't have much experience in business, or the market is new and unknown, a business plan might be a waste of time, or, worse, a path to self-delusion. "In all my years in startups and all my work with VCs I don't ever recall seeing a written business plan. The fact is that investors do not read them."—Don Dodge. Plan just enough to make your first sale. The main thing is to make at least one customer happy, and complete the entire cycle of "make product, sell product" as quickly as possible. Then you will have a business, and then you might be in a position to understand some problems of the sort that extensive planning can help solve.
Pitch your idea to Venture Capitalists to get money to start your company. If you have a good idea, they will love to invest their money in your company. Make a PowerPoint presentation explaining why your product is the best, including each part of your business plan in the presentation. Tell them how much your estimated gross profit is and how much percentage of that they will earn in interest.Or, don't look for or accept funding. Striking a deal with venture capitalists is a long, tiresome, difficult, and dangerous process. In the early days of a business, it can be a catastrophic distraction. "Distraction is fatal to start-ups."—Paul Graham. Many VCs are not set up to make you successful. A wonderful success for you might be to earn $80,000 a year doing work you love. Starting small and pleasing a small number of customers at first is a high-probability way to get there. A VC will not allow such a success to happen, because a VC's strategy is to become a billionaire by rolling the dice on many low-probability but potentially gigantic-returning businesses. The price you pay for taking on a VC is control: control of your dream. If you can get the business started without spending a lot of money, that might be your best route.
Sell. Sell and distribute your product. If you're getting revenue, then you're in business. You're testing your theories about the market, you're finding out what really works and what doesn't, and you're getting fuel for more ideas and improvements. If you're not getting revenue, then it's all in your head.
Hang out with entrepreneurs. By meeting entrepreneurs socially, you gain contacts and hear about opportunities. More importantly, you learn how entrepreneurs think. You pick up their attitudes, their nose for opportunity, their willingness to explore every idea and its opposite (they know that often both work), their contrarian nature, the great diversity in their styles.
Tips
Make sure your business plan is perfect before moving on; this will make your business run a lot more smoothly. Here are some advantages of a perfect business plan:
Success is completely assured. Entrepreneurship is no longer a gamble when the spreadsheet tells you in advance precisely how much money you will make.
You can hire someone very cheaply, perhaps even a virtual assistant in India, to run the business for you, since the plan spells out exactly what to do.
Points to agree with:
I agree with in the article. I would definitely say that in order to success companies should to some extent break away from old perceptions and see problems in new ways, and therefore break away from the past.By doing this we can change the structure of the organization and set goals which drives us toward leadership of the market. After all this is how the sustainable competitive advantage is reached, i.e., being different from others, pursuing strategies in an innovative and novel way. It was interesting to read that companies although realizing this need for innovativeness do not necessarily put time and effort into it, and prefer to take a more or less smooth path.
I would like to share a practical example which is from the company in which I was working. It’s a pharmaceutical company. The owner of the company wants to increase the production of the company. He hired an army retired person as an admin manager. He has nothing to do except making barriers in every matter of the company. Plant manager wants to improve the equipment of production which gives more production in less time but the admin manager is against this idea he always said there is no need to bring any new equipment our older one is good. There is no need to spend money on new equipment. He was a man having no information about the production but he was so close to the owner of the company. It was an owner based firm. Owner gives much importance to the admin manager’s ideas. The other competitor companies bought that equipment and capture most of the market with fast supply of its products. Now that competitor company is the market leader. If the owner didn’t hire that army retired man then the company can sustain its competitive advantage. Or if he hired a person who is not against the new ideas then the company can also have the same position which it had before. The problem with the army officers in our country is they never like smart persons they always welcome to the stupid persons. Who always say yes against any order. They don't like to be flexible to any matter. They always give orders. They didn't like to listen any word against their order.
Point to disagree with:
I do not quite agree with, to start from the author’s perspective of hiring people, it was mentioned that while hiring rational thinking should be put aside, is it really a good idea just to hire intuitively? Not look at person’s previous experience, or educational backgrounds? I would say it is connected to high risk and needs time. For example, if you need to hire an employee for a particular position, of course you would search for somebody who has appropriate education in the relevant field, this would bring results immediately and the person will know what he/she is supposed to do. On the other hand, to take a risk and hire somebody without previous experience, in the hope that he/she shall be innovative and creative, it is very time consuming and needs finances.
I like to put an example here which is related to above situation. The same company hired a person in Finance Dept as auditor. He was 63 years old man he has much experience in finance field. Finance dept wanted to change the accounting system. They wanted to install latest accounting software. But the auditor said its not good. You should work the same software. There was some problem in the previous software and finance manger have to do some manual work for avoiding errors in the financial statement due to which some very important transactions remain pending and company can't recover the payments in time. The newly hired auditor say do the whole work by manual also. For which company needs to hire more employees because there are 7 employees who cover the whole finance system. If company hire more people then its not good because it increased the cost of the company and require more extra time for recovery which is not beneficial for the company. If the company update the system then its much effective for it to make recovery in time and utilize that finance for the increase in production which is much effective for the company.
In a way if the organization is large enough to afford hiring some extra people, with different backgrounds, giving them some spare time for brainstorming, testing and implementing their ideas, this might work out just fine.
Findings:
This article made me think about rejecting all common sense, “normal” ways of doing things and rational reasoning. Maybe it really is worth trying to put aside well-proven ways and go for a new path, no matter how hard it might be. I have never thought about rewarding failures before, although this article made me think about a saying “one who works is the one committing a mistake”, that is if you do not work, thus, you do not commit mistakes. Only punishing inaction is a very interesting assumption presented in the article, this would really motivate employees to try their best, and not be afraid to fail.
References
Sutton, R. (2001). The Weird Rules of Creativity. Harvard Business Review, September 2001
. By breaking all the stereotypes of management decision making the article gave a new insight of the picture.
Points to agree with:
I agree with in the article. I would definitely say that in order to success companies should to some extent break away from old perceptions and see problems in new ways, and therefore break away from the past. After all this is how the sustainable competitive advantage is reached, i.e., being different from others, pursuing strategies in an innovative and novel way. It was interesting to read that companies although realizing this need for innovativeness do not necessarily put time and effort into it, and prefer to take a more or less smooth path.
I would like to share a practical example which is from the company in which I was working. It’s a pharmaceutical company. The owner of the company wants to increase the production of the company. He hired an army retired person as an admin manager. He has nothing to do except making barriers in every matter of the company. Plant manager wants to improve the equipment of production which gives more production in less time but the admin manager is against this idea he always said there is no need to bring any new equipment our older one is good. There is no need to spend money on new equipment. He was a man having no information about the production but he was so close to the owner of the company. It was an owner based firm. Owner gives much importance to the admin manager’s ideas. The other competitor companies bought that equipment and capture most of the market with fast supply of its products. Now that competitor company is the market leader. If the owner didn’t hire that army retired man then the company can sustain its competitive advantage. Or if he hired a person who is not against the new ideas then the company can also have the same position which it had before.
Point to disagree with:
I do not quite agree with, to start from the author’s perspective of hiring people, it was mentioned that while hiring rational thinking should be put aside, is it really a good idea just to hire intuitively? Not look at person’s previous experience, or educational backgrounds? I would say it is connected to high risk and needs time. For example, if you need to hire an employee for a particular position, of course you would search for somebody who has appropriate education in the relevant field, this would bring results immediately and the person will know what he/she is supposed to do. On the other hand, to take a risk and hire somebody without previous experience, in the hope that he/she shall be innovative and creative, it is very time consuming and needs finances.
In a way if the organization is large enough to afford hiring some extra people, with different backgrounds, giving them some spare time for brainstorming, testing and implementing their ideas, this might work out just fine.
Findings:
This article made me think about rejecting all common sense, “normal” ways of doing things and rational reasoning. Maybe it really is worth trying to put aside well-proven ways and go for a new path, no matter how hard it might be. I have never thought about rewarding failures before, although this article made me think about a saying “one who works is the one committing a mistake”, that is if you do not work, thus, you do not commit mistakes. Only punishing inaction is a very interesting assumption presented in the article, this would really motivate employees to try their best, and not be afraid to fail.
References
Sutton, R. (2001). The Weird Rules of Creativity. Harvard Business Review, September 2001
How to Become an Entrepreneur
An entrepreneur is someone who creates his or her own business. Here's how to become your own boss.
Steps
Think of great ideas. If a great idea comes to you, evaluate if it is realistic. Think of cost, manufacturing time, and popularity. Ask and record if people would actually buy the product. If you don't have an idea yet, it is a good start to think of your target market first. Then brainstorm a list of things like places they shop, things they like, and things you like. Narrow the list down to about three items, keeping cost, manufacturing time, and popularity in mind. Find the easiest, most realistic product.Or, think of a terrible idea. Really, you can't tell if a business idea is great or terrible until you try it in a real marketplace. Years later, the successful ideas are "obviously" good, but when they first began, most people rejected them. Google is one of the most famous examples—"Search is done. Does the world need yet another search engine?"—but many less-spectacular successes have strong arguments against them. There is always a good reason against a good idea. It doesn't really matter how good your initial idea is, because you're going to change it, anyway. "Investors invest in people, not business plans. Early-stage investors know that great people can make a mediocre idea work, but mediocre people can't make a great idea work."—Don Dodge.
Write a business plan. Include details and descriptions, and plan everything out realistically. Take your time and evaluate your product at each section. The sections of a good business plan include:
Product description: develop your product. What will it look like? What materials will you need? Make your product eye-catching.
Market Analysis: Who is your market? Where do they shop? Where are they located?
Competition: Who is your competition? What are their strengths? How will you beat them?
Marketing: How will you market your product? What kind of image do you want to display? Where will you advertise? What is your tagline? What is your packaging like?
Sales: Where will you sell? How will you get your customers to buy? When will you sell? What is your estimated sales forecast?
Manufacturing: How do you make your product? Explain this in detailed steps. What materials do you need to make your product? When and where will you manufacture? What is your COGS (cost of goods sold)?
Finance: how much money do you need to start your business? What is your gross profit?Or, don't write a business plan. A business plan is a work of fiction, anyway. If you don't have much experience in business, or the market is new and unknown, a business plan might be a waste of time, or, worse, a path to self-delusion. "In all my years in startups and all my work with VCs I don't ever recall seeing a written business plan. The fact is that investors do not read them."—Don Dodge. Plan just enough to make your first sale. The main thing is to make at least one customer happy, and complete the entire cycle of "make product, sell product" as quickly as possible. Then you will have a business, and then you might be in a position to understand some problems of the sort that extensive planning can help solve.
Pitch your idea to Venture Capitalists to get money to start your company. If you have a good idea, they will love to invest their money in your company. Make a PowerPoint presentation explaining why your product is the best, including each part of your business plan in the presentation. Tell them how much your estimated gross profit is and how much percentage of that they will earn in interest.Or, don't look for or accept funding. Striking a deal with venture capitalists is a long, tiresome, difficult, and dangerous process. In the early days of a business, it can be a catastrophic distraction. "Distraction is fatal to start-ups."—Paul Graham. Many VCs are not set up to make you successful. A wonderful success for you might be to earn $80,000 a year doing work you love. Starting small and pleasing a small number of customers at first is a high-probability way to get there. A VC will not allow such a success to happen, because a VC's strategy is to become a billionaire by rolling the dice on many low-probability but potentially gigantic-returning businesses. The price you pay for taking on a VC is control: control of your dream. If you can get the business started without spending a lot of money, that might be your best route.
Sell. Sell and distribute your product. If you're getting revenue, then you're in business. You're testing your theories about the market, you're finding out what really works and what doesn't, and you're getting fuel for more ideas and improvements. If you're not getting revenue, then it's all in your head.
Hang out with entrepreneurs. By meeting entrepreneurs socially, you gain contacts and hear about opportunities. More importantly, you learn how entrepreneurs think. You pick up their attitudes, their nose for opportunity, their willingness to explore every idea and its opposite (they know that often both work), their contrarian nature, the great diversity in their styles.
Tips
Make sure your business plan is perfect before moving on; this will make your business run a lot more smoothly. Here are some advantages of a perfect business plan:
Success is completely assured. Entrepreneurship is no longer a gamble when the spreadsheet tells you in advance precisely how much money you will make.
You can hire someone very cheaply, perhaps even a virtual assistant in India, to run the business for you, since the plan spells out exactly what to do.
Saturday, September 13, 2008
Created own company
KAMRAN PHARMACEUTICALS
ABOUT THE COMPNAY:
This company starts working in 2005 in Pakistan. It’s a manufacturing company. It makes injections, tablets and vaccines. Its main product is aczone 250mg, 500mg and 1g. It also produces some tablets and syrups It’s an antibiotic injection which is effected for almost all type of infection. There are almost 170 employees working in this organization. Its last year turnover is 2.5 million dollor.
Objective of the company:
To provide best and cheap health to the people
COMPANY DEPARTMENTS:
Production Department
Marking Department
Administration Department
Finance Department
Human Resource Department
R&D Department
PRODUCTION DEPARTMENT:
In production department there are further departments:
Quality control Department
Quality assurance department
Raw Material Store
Packing Material Store
Packing Department
Finish goods Department
Maintenance Department
QUALITY CONTROL DEPARTMENT:
In this department there are there are almost 12 employees which properly control the quality of the products. These are:
Quality control manager
Deputy quality control manager
Assistant quality control manager
Quality control officers
Quality control assistants
QUALITY ASSURANCE DEPARTMENT:
In this department there are 8 employees which check the quality of ram material and assure that the material which is use to produce products is effective. Staff distribution of quality assurance department is:
Quality assurance incharge
Quality assurance officers
Quality assurance assistants
RAW MATERIAL STORE:
In this store there are 6 employees which keep proper record of the raw material and give demand for the required material. These are:
Raw material store incharge
Raw material store assistants
PACKING MATERIAL STORE:
In packing material store there are 6 employees which keep record of the packing material. They provide information about the required packing material. These are distributed as:
Packing material incharge
Packing material store assistants.
PACKING DEPARTMENT:
This department pack the finished products for their safe transportation from one city or country to other city or country. There are almost 30 employees. These are distributed as:
Packing incharge
Packing girls/boys
FINISH GOODS STORE:
In this store there are 10 employees which keep record of the finish goods and also record the product which are transported out of the company for delivery. These are distributed as:
Finish goods store incharge
Supervisor
Assistants
MAINTENANCE DEPARTMENT:
In this department there are 9 employees which performs all type of maintenance activities.
Maintenance incharge
Maintenance supervisor
Assistants
MARKETING DEPARTMENT:
Company pay much attention on marketing of their products. Marketing is the main department of any company. Almost all the companies depends on their marketing department. How much stronger the marketing team and their marketing strategies much stronger the sale of the company. We provide a facility to them for ISO training program so that we can maintain the market position in better way. For this purpose we send our employees to the training institutes so that they can represent the product in the market in much effective way.There are 54 employees in the marketing department which performs different type of duties.
Marketing planners
Marketing researchers
Sales team
FINANCE DEPARTMENT:
There are almost 8 people working in finance department of the company. They keep all type of financial records of the company. They deal all type legal matters tax related matters. These are distributed as:
Finance manger
Assistant finance manger
Finance officers
AUDIT DEPARTMENT:
In audit department there are 4 employees which perform internal audit activities.
Audit manager
Audit officer
ADMINISTRATION DEPARTMENT
In this department there are 6 employees. These employees perform all type of administrative activities.
These are distributed as:
Admin Manager
Admin officers
Assistant Admin officers
Human Resource Department:
Human resource department is also the main department of almost all the companies. Human resource policies pay a key role for the growth of the organization. There are 7 employees in this department.
Human resource manager
Human resource officers
Assistant human resource officers.
R&D Department:
This department work on the reseach process so that we can enhance our products validity and reliability. The main purpose of this department is to do work for increasing the performance of the products. The main product is Hepataetus vecine, Its a common disease in Pakistan.
This department performs the duty how can we prepare an effective vecine which can better controll this disease.
For this pupose we hire qualified Pharmacists most of the pharamcist have much experience in this field. They have doctorate degree in Pharmacy.
Other than this we take some consultancy from the molecular biologists. Who give good ideas and information about the process of vacine so that we can cover the deficiencies of the product.
POLICY OF THE COMPANY:
Company follows the following rule while staffing:
ü Company hires well educated staff
ü Hires experienced persons
ü Prefers persons which are qualified according to the departments.
ü There is three months propagations period for newly hired employees.
ü After three months all the employees are confirmed
ü After confirmation company provide medical and provident fund facility to the employees
ü Company also provide accommodation to their senior and managerial staff
ü Company provides health insurance facility to the employees.
ü It also provide pick and drop service to all employees free of cost.
ü Company give rewards and bonus facility to motivate their employees towards work.
TRAING PROGRAMMES
ü Company provide on job training to the employees.
ü Company send the managerial and senior to the other countries so that they can best utilizes their abilities for the growth of the organization.
TARGET MARKET:
Our target market is Pakistan in which this disease is very common and every third person is suffering from this disease.
MARKET POLICY:
Our market policy is to capture the market with best quality and low cost product provided to the end customer.
COMPETITORS:
There is no local competitor for this product. Only few multinational companies provide this product.
GSK Pharmaceuticals
Merck Pharmaceuticals
are the main competitor companies.
They provide this product on very high rate which is impossible for everyone to purchase and use it because they costs very much while manufacturing. We produce this product at local level which is much beneficial for us. We can provide this vacine on low rate which is affordable for every one.
REWARDS AND INCENTIVES:
Cash prizes:
Company give cash prize to the employees which gives best performance during the work.
Give extra leaves:
Company give extra leave other than routine leave to the employees who perform good work.
Bonus:
Company give bonus to the employees who meets their targets and have done extraordinary wok.
Visit to beautiful places with the family:
This facility is given to the assistant staff for their best performance. Who meet their targets.
ABOUT THE COMPNAY:
This company starts working in 2005 in Pakistan. It’s a manufacturing company. It makes injections, tablets and vaccines. Its main product is aczone 250mg, 500mg and 1g. It also produces some tablets and syrups It’s an antibiotic injection which is effected for almost all type of infection. There are almost 170 employees working in this organization. Its last year turnover is 2.5 million dollor.
Objective of the company:
To provide best and cheap health to the people
COMPANY DEPARTMENTS:
Production Department
Marking Department
Administration Department
Finance Department
Human Resource Department
R&D Department
PRODUCTION DEPARTMENT:
In production department there are further departments:
Quality control Department
Quality assurance department
Raw Material Store
Packing Material Store
Packing Department
Finish goods Department
Maintenance Department
QUALITY CONTROL DEPARTMENT:
In this department there are there are almost 12 employees which properly control the quality of the products. These are:
Quality control manager
Deputy quality control manager
Assistant quality control manager
Quality control officers
Quality control assistants
QUALITY ASSURANCE DEPARTMENT:
In this department there are 8 employees which check the quality of ram material and assure that the material which is use to produce products is effective. Staff distribution of quality assurance department is:
Quality assurance incharge
Quality assurance officers
Quality assurance assistants
RAW MATERIAL STORE:
In this store there are 6 employees which keep proper record of the raw material and give demand for the required material. These are:
Raw material store incharge
Raw material store assistants
PACKING MATERIAL STORE:
In packing material store there are 6 employees which keep record of the packing material. They provide information about the required packing material. These are distributed as:
Packing material incharge
Packing material store assistants.
PACKING DEPARTMENT:
This department pack the finished products for their safe transportation from one city or country to other city or country. There are almost 30 employees. These are distributed as:
Packing incharge
Packing girls/boys
FINISH GOODS STORE:
In this store there are 10 employees which keep record of the finish goods and also record the product which are transported out of the company for delivery. These are distributed as:
Finish goods store incharge
Supervisor
Assistants
MAINTENANCE DEPARTMENT:
In this department there are 9 employees which performs all type of maintenance activities.
Maintenance incharge
Maintenance supervisor
Assistants
MARKETING DEPARTMENT:
Company pay much attention on marketing of their products. Marketing is the main department of any company. Almost all the companies depends on their marketing department. How much stronger the marketing team and their marketing strategies much stronger the sale of the company. We provide a facility to them for ISO training program so that we can maintain the market position in better way. For this purpose we send our employees to the training institutes so that they can represent the product in the market in much effective way.There are 54 employees in the marketing department which performs different type of duties.
Marketing planners
Marketing researchers
Sales team
FINANCE DEPARTMENT:
There are almost 8 people working in finance department of the company. They keep all type of financial records of the company. They deal all type legal matters tax related matters. These are distributed as:
Finance manger
Assistant finance manger
Finance officers
AUDIT DEPARTMENT:
In audit department there are 4 employees which perform internal audit activities.
Audit manager
Audit officer
ADMINISTRATION DEPARTMENT
In this department there are 6 employees. These employees perform all type of administrative activities.
These are distributed as:
Admin Manager
Admin officers
Assistant Admin officers
Human Resource Department:
Human resource department is also the main department of almost all the companies. Human resource policies pay a key role for the growth of the organization. There are 7 employees in this department.
Human resource manager
Human resource officers
Assistant human resource officers.
R&D Department:
This department work on the reseach process so that we can enhance our products validity and reliability. The main purpose of this department is to do work for increasing the performance of the products. The main product is Hepataetus vecine, Its a common disease in Pakistan.
This department performs the duty how can we prepare an effective vecine which can better controll this disease.
For this pupose we hire qualified Pharmacists most of the pharamcist have much experience in this field. They have doctorate degree in Pharmacy.
Other than this we take some consultancy from the molecular biologists. Who give good ideas and information about the process of vacine so that we can cover the deficiencies of the product.
POLICY OF THE COMPANY:
Company follows the following rule while staffing:
ü Company hires well educated staff
ü Hires experienced persons
ü Prefers persons which are qualified according to the departments.
ü There is three months propagations period for newly hired employees.
ü After three months all the employees are confirmed
ü After confirmation company provide medical and provident fund facility to the employees
ü Company also provide accommodation to their senior and managerial staff
ü Company provides health insurance facility to the employees.
ü It also provide pick and drop service to all employees free of cost.
ü Company give rewards and bonus facility to motivate their employees towards work.
TRAING PROGRAMMES
ü Company provide on job training to the employees.
ü Company send the managerial and senior to the other countries so that they can best utilizes their abilities for the growth of the organization.
TARGET MARKET:
Our target market is Pakistan in which this disease is very common and every third person is suffering from this disease.
MARKET POLICY:
Our market policy is to capture the market with best quality and low cost product provided to the end customer.
COMPETITORS:
There is no local competitor for this product. Only few multinational companies provide this product.
GSK Pharmaceuticals
Merck Pharmaceuticals
are the main competitor companies.
They provide this product on very high rate which is impossible for everyone to purchase and use it because they costs very much while manufacturing. We produce this product at local level which is much beneficial for us. We can provide this vacine on low rate which is affordable for every one.
REWARDS AND INCENTIVES:
Cash prizes:
Company give cash prize to the employees which gives best performance during the work.
Give extra leaves:
Company give extra leave other than routine leave to the employees who perform good work.
Bonus:
Company give bonus to the employees who meets their targets and have done extraordinary wok.
Visit to beautiful places with the family:
This facility is given to the assistant staff for their best performance. Who meet their targets.
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