Innovation is seen as a Powerful Way to Competitive Advantage

Although innovation is increasingly seen as a powerful way of securing competitive advantage and a more secure approach to defending strategic positions, s is by no means guaranteed The history of product and process innovations is littered with examples of apparently good ideas which failed in some cases with spectacular consequences . For example:

In 1952 Ford engineers began working on a new car to counter the mid size models offered by GM and Chrysler – the E car. After an exhaustive search for name involving some 20,000 suggestions the car was finally named after Edsel Ford, Henry Ford’s only son, It was not a success, when the first Edsels came off the production line Ford had to spend an average of $10,000 per car (twice the vehicle cost ) to get them roadworthy. A publicity plan was to have 75 Edsels rive out on the same day to local dealers; in the event the firm only managed to get 68 to go, whilst in another live TV slot the car failed to start. Nor were these teething troubles by 1958 consumers’ indifference to the design and concern about its reputation led the company to abandon the car at a cost of $540 m and 110847 Edsels.

During the latter part of the Second World War it became increasingly clear that there would be a big market for long distance airliners, especially on the transatlantic route. One UK contender was the Bristol Brabazon, based on a design for a giant long range bomber which was approved by the Ministry of Aviation for development in 1943. Consultation with BOAC, the major customer for the new airliner was to associate itself closely with the layout of the aircraft and its equipment but not to comment on issues like size, range and pay load! The budget rapidly escalated with the construction of new facilities to accommodate such a large plane and at one stage, the demolition of an entire village in order to extend the runway at Fulton near Bristol. Project control was weak and many unnecessary features were included – for example the mock up contained a most magnificent ladies’ powder room with wooden aluminium painted mirrors and even receptacles for the various lotions and powders used by the modern young lady. The prototype took six and a half years to build and involved major technical crises with wings and engine design although it flew well in tests the character of the post war aircraft market was very different from that envisaged by the technologists. Consequently in 1952 after flying less than 1000 miles, the project was abandoned at considerable cost to the taxpayer. The parallels with the Concorde project, developed by the same company on the same site a decade later, are hard to escape.

During the late 1990s revolutionary changes were going on in mobile communications involving many successful innovations — but even experienced players can get their fingers burned. Motorola launched an ambitious venture which aimed to offer mobile communications from literally anywhere on the planet – including the middle of the Sahara Desert or the top of Mount Everest. Achieving this involved a $7bn project to put 88 satellites in the orbit but despite the costs Iridium as the venture was known received investments funds from major backers and the network was established. The trouble was that once the novelty had worn off, most people realized that they did not need to make many calls from remote islands or the North Pole and that their needs were generally well met with less exotic mobile networks based around large cities and populated regions. Worse, the handsets for Iridium were large and clumsy because of the complex electronics and wireless equipment.

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