EXAMPLE: Dell Computer Corporation uses many of the same design and manufacturing systems as their competitors, but they differ significantly in terms of how they serve their customers’ needs. What originally set Dell apart from its competitors and arguably helped build its significant market share was its strategy of skipping the middleman (i.e., the sales agent) and allowing customers to configure their computers to their own requirements. This was coupled with a manufacturing system that could produce the goods very quickly and provide an all-important service and distribution process. Dell’s service was also significantly boosted by use of the Internet and the availability of the Internet to potential customers.
Product and Process Innovation
Process innovation often is viewed as less important than product innova- tion. Whereas new product development has been the focus of much atten- tion, process innovation has come under the headings of operations management and quality management in the literature. As highlighted by Utterback (1996), process innovation becomes of increasing importance rel- ative to product innovation for organizations once the dominant design of the product has been established. Therefore, over the life of an industry, process innovation is of equal importance to product innovation when organizations seek competitive advantage. Process innovation can even affect product innovation when it results in improvements to the process that can inspire further product innovation. All organizations are constantly trying to develop their processes to reduce cost, improve output quality, reduce lead time, or increase value for the customer. Only certain organiza- tions engage in product innovation, and this occurs only periodically as they develop a new product or engage in product enhancement. The greater attention paid to product innovation may result from the following: