INNOVATION AT FEEDHENRY 11
Innovation at FeedHenry
Innovation at FeedHenry
Feedhenry faces several external environmental challenges (Cunningham & Gately, 2013). These challenges can be well analyzed using PESTEL analysis and scenario planning. PESTEL analysis looks at the political, economic, social, technological, legal and environmental factors. If an organization is able to use pestle analysis in auditing its environment, it becomes possible to gain a competitive advantage and respond to the market changes.
FeedHenry operates in a global market which is prone to governments influence. This includes being impacted by policy changes, stability of the governments, corruption, trade control, regulation of competition, trade agreements and existing laws on intellectual property. From the case study, it is clear that the firm had been able to benefit from the existing intellectual property laws. For example, the firm was able to initiate a spinout taking the intellectual property rights for their platform technology software (Cunningham & Gately, 2013). This can be attributed to the fact that the firm was operating in a government which had laws on intellectual rights and resolve disputes on the same. The firm success has been based on the operating environment which is guided by the government laws and regulations. Being a small technology firm, FeedHenry operations will be highly influenced by the government policies.
FeedHenry growth and innovation strategy which involves competing in both App and cloud industries and which is based on marketing and technology strategy. The technology strategy involves coming up with simple secure and scalable platform technology. To succeed in this strategy, FeedHenry has to be in a favorable government environment (Cunningham & Gately, 2013). The stability of the Irish government is a major driver for success in attaining innovation and growth by Feedhenry. This is due to fact that government instability leads to a good environment for conducting business and makes it possible to innovate.
The economic growth rate, inflation rates, unemployment, costs of labor, price fluctuations and fiscal policies has an impact on operations of FeedHenry (Cunningham & Gately, 2013). When the economy is performing well, the small firms are able to easily access credit and finance its operations. This is due to fact that the economy dictates the lending and financing policies. Monetary and fiscal policies shape the firms performance. Economic environment has a great impact on the firm performance. With a good economic environment, it is possible to attain the goals. The main drivers in the case of FeedHenry are price fluctuations, fiscal policies and monetary policies.
Feedhenry is impacted by existing attitudes towards quality, customer service, lifestyles, population growth, age distribution, social classes and the disposal income. This is due to fact that the firm is required to meet the market quality requirements and also meet the customer service needs. In the society, social class determines the ability to make purchases (Cunningham & Gately, 2013). Also, social class and disposable income in the society has an impact on the level of penetration of technology.
Technological factors have a great impact on the success of small technology firms (Gawer & Cusumano, 2014). This is due to the fact that technology firms such as FeedHenry depends on existing infrastructure, technological change, incentives, laws in technology, internet infrastructure, and internet penetration. FeedHenry success in the industry is affected by the level of adoption of Apps and cloud technology. This is all dependent on the level of technology penetration in a given demographic. The firm growth and innovation strategy is affected by the level of technology adoption and penetration in its markets (Gawer & Cusumano, 2014).
FeedHenry operates in a legal environment. This implies that the firm is bound to be affected by copyrights, intellectual and patent laws, consumer protection laws, data protection laws and environment law among others. Being a small technological firm, its growth will be determined highly by adherence to the law. Data protection law will have a great impact on the success. This is due to current market needs for respecting consumer privacy (Gawer & Cusumano, 2014).
Scenario planning gives a great way of looking into the future. FeedHenry has been on an entrepreneurial growth since they started focusing on mobile apps technology and moved from the web technology for media and telecommunication. Using scenario planning, it is possible to assess the business strategy for Feedhenry and how it is aligned to the firm business environment and overall strategic objectives. This is through looking at ways in which the future might unfold based on the market environment (Gawer & Cusumano, 2014). In this case, it involves looking at an issue that confronts FeedHenry and how it might affect their future. At the moment, the firm faces a stiff competition in the app market. Some of the competitors have been gaining a market share including Phonegap and Appcelerator. The firm also faces a challenge in making the right call on the technology and market opportunities.
With the rapidly developing technology, competition in the future apps market might even become stiffer. This implies that FeedHenry might find its self in a crowded market with a lot of app developers. In such an instance coming up with a competitive edge will help in determining its survival (Gawer & Cusumano, 2014).
Another future scenario is where the firm manages to excel in the app market and eliminate all the competitors. This also depends on Feedhenry having a competitive advantage in the market. With these scenarios in mind, FeedHenry might have to make a decision on whether to invest more on their innovation strategy. The uncertain future of the mobile apps calls for an evolving business and innovation strategy. Should FeedHenry continue its high investment in the cloud based mobile application platform? Should the firm look for a new way to gain a competitive advantage? The business environment is becoming highly competitive and the business strategy by Feedhenry has the capability to give the business a competitive edge (Gawer & Cusumano, 2014). This is as witnessed at the moment where the business has been able to gain an advantage compared to competitors. Through looking at SWOT analysis, it is possible to determine strengths, weakness, opportunities and threats that are faced by the firm. This will show how the challenges faced by the firm are aligned with the business environment and strategic objectives.
Cloud based mobile based application
Great marketing strategy
Great partnership strategy
Direct business channel
Lack of adequate capital
Developing new technologies
Exploring new markets
High competition in the Apps market
Increasing global competition
1. Evaluate FeedHenry’s activities as a market push or demand pull innovator;
FeedHenry’s activities are based on both market push and demand pull innovation. In 2010, the company transformed its business model from the previous focus on media and telecommunications to mobile apps (Cunningham & Gately, 2013). This was a demand pull innovation on the part of FeedHenry since it was aligning its business with the changing space in mobile applications and communication in the modern world. In its move to the new business model, FeedHenry’s product was based on ‘platform as service’ where entities would subscribe to the platform and develop applications. This was an innovation that geared off the previously upheld approach of project based app development by other companies. The company also developed applications based on the innovation of its team and in turn sold them in the market. On this, the company’s activities were based on market push. Lastly, the company developed applications on request from clients; an integration of demand pull innovation (Gawer & Cusumano, 2014).
2. Identify whether FeedHenry is a technological or business model innovator and understand its implications in terms of their business activities;
FeedHenry is a technological innovator. The company’s business is based on sales of it’s ‘platform as a service, mobile applications other technology solutions (Cunningham & Gately, 2013). The company has been able to change the way business transitions develop their applications on their platform; reducing costs involved, guaranteeing security and providing companies with training and development on applications development. Being a technological innovator, the company has a competent team in place in its ‘campus to corporate’ approach to recruitment and staffing (Gawer & Cusumano, 2014).
3. Identify the key product or process innovations in FeedHenry;
The key product innovation in FeedHenry is its platform and service that enables users to develop applications safely, cheaply and also acquire development skills (Gawer & Cusumano, 2014).
4. Evaluate FeedHenry’s approach to open and/or closed innovation;
As FeedHenry continues in their innovation, they should embrace open innovation that enables them to use external resources (Cunningham & Gately, 2013). It is important to appreciate that the ‘platform as service’ provides the company with exposure from external developers who bring with them diverse ideas. The company has also benefitted from partnerships with other technology and communications leaders that have leveraged its success.
Innovation involves introduction of goods and services to the consumers
The company makes use of its research and development function to develop innovative products to offer both market push and demand pull products. As such, it can be acknowledged that FeedHenry is using a closed innovation approach (Cunningham & Gately, 2013).
The pace of Innovation diffusion of FeedHenry is relatively fast. In its venture in delivering mobile applications, FeedHenry has mastered the importance of partnering with industry leaders so as to be enhance its market entry success. The company has partners with Telefonica, a leader in the telecommunications industry and Hewlett-Packard, an industrial leader in technology (Cunningham & Gately, 2013). It is worth acknowledging the fact that the product life cycle in the technology world is relatively short as compared to that of other products. The choice of the platform as a service business model has placed FeedHenry at an advantage of being able to address the dynamics involved in innovation diffusion in that it leaves the market adaptation and market stabilization phases to the developers of the applications who use FeedHenry as a service. However, the company has to go through the innovation diffusion when it comes to its market push products. The company is able to increase the pace of innovation diffusion in these products by getting into strategic partnerships with key organizations in the business space.
A look at the S curve gives an insight into business planning and forecasting on the side of both supply and demand patterns. For any innovation, the lowest section of the curve that represents about 2.5 % of the target market is the innovators who are the primary consumers of the innovation (InvestAura, 2015). About 10 % of the target populations follow as the early adopters of the technology while 40% of the target market are the early adopters, 40% are the later majority while the rest are the laggards (InvestAura, 2015). For FeedHenry, rapid innovation diffusion in this curve is achieved by partnering and also ensuring high quality products that increase consumption.
Feedhenry;s ecosystem is made up of key elements that enable it to sustain its innovation. First, FeedHenry has been able to manage the relationship by having a competent team that is well versed with technology and business dynamics in such a manner that it is able to provide utility to its market (Adner, 2006). In its campus to corporate approach, the company is able to get the best candidates from university and mould them to dream employees for the company. The competent workforce is a source of innovation as they are encouraged to develop their ideas. Second, the company has entered into strategic partnerships with strategic partners. These key partners form a large part of the innovation diffusion. Last, the company has a platform as service platform that provides room for external innovation. As such, disruptive technologies propelled by the technology are propagated by the users themselves. This platform also provides an opportunity for the company to provide mutual benefits to the clients as well. A customer relationship management has also enabled the company maintain healthy relationships within and outside its ecosystem (Adner, 2006).
Adner, R. (2006). Match your innovation strategy to your innovation ecosystem. Harvard business review, 84(4), pp. 98-99.
Cunningham, J., & Gately, C. (2013). Case Study, FeedHenry – Innovating in the Cloud, pp. 670- 675.
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417-433.
InvestAura, (2015). Mastering the Art of Business Planning. Retrieved on 17th September from http://www.business-planning-for-managers.com/main-courses/forecasting/the-diffusion-of-innovation/