Innovation And Knowledge Management: The Case Of Sony Walkman And Apple IPod Essay.

The Rise of Apple iPod

Write an Essay on the Innovation & Knowledge Management.

Innovation can be defined as the process of implementation of the inventions and discoveries, in order to generate new outcomes in terms of products, processes, systems or entire organisations. It has the power to bring about changes and improvement in the performance and the problem solving methodology, along with adding value to any work. The entire process of innovation is heavily dependent on knowledge, since logic, information and data, together, helps in the conceptualization and innovation, which further assists in the renewal of the business strategies (MIT Press, 2011). This essay comprises of a detailed understanding of knowledge management as a function of organisational performance, and how it contributes towards the achievement of innovation in the organisations by giving it a competitive advantage. For this, a case analysis has been conducted for Sony Walkman and Apple iPod Touch, by comparing and contrasting the knowledge management and innovation application, and how it impacted the product development, sales, and ultimately the market share for the two organisations. In the year 1979, Sony launched their portable Walkman range of music players, which became the undisputed market leaders in no time (King, 2009). Sony continue to enjoy this position, and a fairly large market share, for about 25 years, till Apple decided to innovate and launch the iPod, which was a new portable music player. Of all the technical components of the iPod, close to 80% were produced by Sony, or by the different companies running within the brand name of Sony. Within 3 years of its launch, the Apple iPod took over the sales of Sony Walkman to become the new market leader, and while Sony was already enjoying a strong position in the market, a new organisation entered the market, and completely changed the equation for all the players. This can be attributed directly to innovation and knowledge management which was well analysed, understood and applied by Apple, along with the excellent cooperation within the organisation, that enabled them to achieve these magnificent results (UNIBO, 2010).

Sony Walkman and Apple iPod touch: In the year 1978, the engineers working at Sony, combined the concept of the compact music playback devices with headphones, to create a product that allowed people to play music anywhere at their convenience. This product was later christened as the ‘Walkman’, and was introduced in the market of Japan, where it was received very well by the people. The initial 30,000 units of the Walkman were sold in the market within the first three months of its launch. The sales of Walkman picked up really fast, and remained that way consistently for a very long time. Even after a decade of its launch, the Sony Walkman was able to maintain a 50% market share in the United States of America and about 46% market share in Japan. However, their inability to adapt to the transition from CDs to digital MP3 players was what resulted in the decline of sales of Sony Walkman in the market and gave a window to the rest of the players to catch up and take a lead. The South Korean organisation Saehan Information Systems, invented the first digital audio player in the year 1998, that was portable and was named MPMan. The markets embraced this player, and they were able to sell more than 50,000 players in its first year of launch (Uriarte, 2008).

Innovation and Knowledge Management in Organizations

Apple continued to innovate in the segment of MP3 players, and launched the first iPod in the year 2001. However, by the time it was launched, there were more than 50 portable MP3 players already present in the market for the customers to choose from, and none of these had a mass following or a dominance in the market, that was anywhere close to the one that was enjoyed by Sony Walkman 20 years earlier. The consolidation of the market of MP3 players took some time, however, Apple was able to take the lead slowly and was able to enjoy the dominance in the market within sometime of its launch in October 2001 (Dalkir, 2009). Apple implemented smart innovation method along with knowledge management used to its optimal level, to develop a device that was simple in usage and was supported by an extremely smart software that made this simplification possible. In April 2003, Apple Inc launched the iTunes store for music, which became a retail point online, that allowed the customers to go through the music available, and purchase the same at a nominal price. Within 2 years, the library of iTunes music store had grown to have more than 1.5 million songs and although the organisation was not making much profit per song, the volume of the songs purchased by the customers was very high, and translated into a revenue of about 800 million dollars. The organisation Apple Inc. was not only making profit by selling the MP3 players, but there was also a recurring profit, that they were enjoying with every player sold, for the purchase of the songs that people would pay to the iTunes music store. Within 3 years of its launch, the Apple iPod took over the sales of Sony Walkman to become the new market leader, and while Sony was already enjoying a strong position in the market, a new organisation entered the market, and completely changed the equation for all the players. Although the sale of portable CD players was still very high by the end of the year 2004, the following year saw an increase in the sales of the iPod by more than 600% (Sedge, 2011). This was because the people who purchased the device once, would repurchase the newer and more advanced versions of the player, and by the year 2008, Apple was enjoying a market share of about 48% in the MP3 player segment. The closest competitor of Apple at that time was the SanDisk MP3 player which had a market share of merely 8%.

The Importance of Research and Development in Innovation

Innovation and knowledge management by the organizations: The data, information and knowledge is a resource for the organisation that helps in the technological innovation, and provides them with a competitive advantage, that is sustained over a period of time. The knowledge management, organisational learning as well as the intellectual capital for the organisations helps them in understanding and putting together the key pieces of the complex business phenomena by being innovative through continuous technological advancements and provides them with the means for developing better products. Innovation has the power to bring about changes and improvement in the performance and the problem solving methodology, along with adding value to any work. The entire process of innovation is heavily dependent on knowledge, since logic, information and data, together, helps in the conceptualization and innovation, which further assists in the renewal of the business strategies (Omotayo, 2015). This essay comprises of a detailed understanding of knowledge management as a function of organisational performance, and how it contributes towards the achievement of innovation in the organisations by giving it a competitive advantage. Sony although enjoyed the dominant position in the market for a very long time, their failure to innovate and adopt to the changing times, was what led to the decline in the market share for the organisation, and proved to be beneficial for Apple Inc. Later on, Sony did come up with the compact Walkman MP3 players, which additionally had a number of features like greater storage, app support, water protection, lower price point etc, but by then Apple had already established itself really well in the market, and had a loyal customer base who were following the organisation, and all their product launches enthusiastically.

The economies all over the world are driven by knowledge and innovation, and both these go hand in hand. Since the knowledge is responsible for producing endeavours to take the advantage of ideas, data and the technologies, to make the organisations improve their working and gain the competitive advantage that everybody longs for. Knowledge management is a developing body of management, that comprises of the collaboration and analysis of tools, methods, techniques and the values that the organisations can make use of, for creating, developing and applying the knowledge (OECD, 2012). They also make use of it for getting a return on the intellectual assets of the organisation. For this, the organisations need to continuously adapt to the ever changing and evolving business environment, and minimise the time that is taken for the development of a product till it reaches the hands of the customers. This requires the ability of problem solving and learning for integration of the relevant information, and knowledge to provide a response to the business problems of the organisation, and give them a chance to serve their customers by offering product as per their demand and requirements (OECD Team, 2007).

The Role of Knowledge Sharing in Innovation

In Venturous Australia the properties of information and ideas which are central to all forms of innovation are described:

Knowledge is non-rival. An idea, unlike a consumer good or service, has to be produced only once and it can then be used many times without detracting from its value (Cutler & Company, 2008).

Knowledge is cumulative. The current stock of knowledge provides the fertile ground from which further research develops new knowledge

Knowledge is reproducible at negligible cost, particularly digitised knowledge.

Knowledge is only partially excludable. For example, inspection of patent applications and reverse engineering can reveal most of the information in product innovations

Knowledge is an intangible asset. It cannot be recovered by an investor in the way that a building or a machine can be recovered

The generation of new knowledge involves fundamental uncertainty. It takes us beyond what we know.

All these properties together have a number of implications, and make the knowledge sharing process socially efficient and accessible, to allow the diffusion of innovation in the society. For this, the organisations should also optimise the research and development facilities, and invest in them, to ensure that the attempt and efforts towards the research are aligned in a better way with the changing market needs. They must also take care that the product introduction that are being made by them, are in line with the anticipation of the needs of the customers, and must aim to develop the products that are differentiated from those being offered by the competitors. The knowledge sharing facilities encourage collaboration, and also facilitate learning among the society. It allows the absorption of technologies and the advancements in the same, and allow the flow of new ideas, to innovate successfully. It also helps in the development and nurturing of learning organisations (Princeton, 2012). Learning organisations are the ones where people continuously work towards the expansion of their capacities, and expensive patterns, to nurture new thoughts and thinking patterns, and set the collective aspiration among the people free, to be able to see the whole world as a single entity. Knowledge management has a lot of literature associated with its development and adoption by the organisations, and it provides an excellent opportunity to the organisations to adapt and find new ways for the transfer and sharing of knowledge.

Conclusion:

This essay comprises of a detailed understanding of knowledge management as a function of organisational performance, and how it contributes towards the achievement of innovation in the organisations by giving it a competitive advantage. For this, a case analysis has been conducted for Sony Walkman and Apple iPod Touch, by comparing and contrasting the knowledge management and innovation application, and how it impacted the product development, sales, and ultimately the market share for the two organisations. In the year 1978, the engineers working at Sony, combined the concept of the compact music playback devices with headphones, to create a product that allowed people to play music anywhere at their convenience. Sony although enjoyed the dominant position in the market for a very long time, their failure to innovate and adopt to the changing times, was what led to the decline in the market share for the organisation, and proved to be beneficial for Apple Inc. Later on, Sony did come up with the compact Walkman MP3 players, which additionally had a number of features like greater storage, app support, water protection, lower price point etc, but by then Apple had already established itself really well in the market, and had a loyal customer base who were following the organisation, and all their product launches enthusiastically.

References

Cutler & Company, 2008. Venturous Autralia: Building strength in innovation, Available at: https://www.industry.nsw.gov.au/__data/assets/pdf_file/0006/55383/NIS_review_Web3.pdf

Dalkir, K., 2009. Knowledge Management in Theory and Practice, Available at: https://dianabarbosa.files.wordpress.com/2009/03/knowledge-management-kimiz-dalkir.pdf

King, W., 2009. Knowledge Management and Organizational Learning, Available at: https://www.westga.edu/~dturner/KMOL.pdf

MIT Press, 2011. Introduction to Knowledge Management, Available at: https://mitpress.mit.edu/sites/default/files/titles/content/9780262015080_sch_0001.pdf

OECD Team, 2007. Innovation and growth: Organisation for economic co-operation and development, Available at: https://www.oecd.org/sti/inno/39374789.pdf

OECD, 2012. Innovation for Development: Organisation for Economic Co-operation and Development, Available at: https://www.oecd.org/innovation/inno/50586251.pdf

Omotayo, F., 2015. Knowledge Management as an important tool in Organisational Management: A Review of Literature, Available at: https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=3330&context=libphilprac

Princeton, P., 2012. The Nature and Importance of Innovation, Available at: https://assets.press.princeton.edu/chapters/s9221.pdf

Sedge, P., 2011. Knowledge management – An Overview, Available at: https://www.providersedge.com/docs/km_articles/km_an_overview.pdf

UNIBO, 2010. Introducing Knowledge Management, Available at: https://www.cs.unibo.it/~gaspari/www/teaching/slides_KM1a.pdf

Uriarte, F., 2008. Introduction to Knowledge Management: ASEAN Foundation, Available at: https://www.aseanfoundation.org/documents/knowledge_management_book.pdf