Undoubtedly, DELL computers is probably the most written about organization in the past decade or so. Amongst many studies, Strategic Innovation is identified as key attribute to Dell's success. So the question arise what is strategic innovation?
A bit of history before we tackle the topic of strategic innovation. According to Michael Porter there are only 2 organizational strategies within a defined market segment i.e. Cost Leadership and Service Differentiation. Meaning an organization can either sell its product at cheapest price. Hence, it becomes cost leader in its industry segment (Think Walmart). Or an organization offers a service differentiation that does not have a close substitute (think Apple ipod).
What a strategic innovator does is it uses its strategy to increase the size of market segment in such a way the it gets both cost advantage and service differentiation. This is exactly what DELL did. It aligned every small piece of its strategy in such way that its strategy increased the size of PC market and its strategy gave Dell a cost advantage over its competitors whilst maintaining its service differentiation.
In essence, the point here that innovation is not only attributed to physical tangible products such as ipod but also attributed to strategy. As with Dell's case, its strategy in itself is an innovation.
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I agree with Harish, There is another aspect discussed by (Willcocks and Plant, 2001) in E-business Strategic Grid which explains adding to your comments.
ReplyDeleteCompanies like Fidelity investments, Cisco Systems and Dell Corporation stood out in the ability to combine marketing, service and info capabilities to achieve web based market growth and profitability.
Rgds,
Mudit