Innovation & Commercialization - BTEC HND - Sem 2020/2021

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10190649_Nguyen Thu Tra_IC_A1.

1
Contents
Introduction.................................................................................................................................................3
Major findings.............................................................................................................................................3
1. Invention and innovation.................................................................................................................3
1.1. Highlight of Invention and innovation.....................................................................................3
1.2. Differences between inventions of technological breakthoughs, major innovations and
incremental innovations......................................................................................................................5
2. IBM’s sources of innovation............................................................................................................6
3. IBM’s demand pull and technological push.....................................................................................7
4. IBM’s vision, culture and leadership and innovation dilenma.........................................................9
4.1. Vision.......................................................................................................................................9
4.2. Leadership...............................................................................................................................9
4.3. Culture...................................................................................................................................10
4.4. Innovation dilenma................................................................................................................11
5. Analysing the competition between electric typewriter and electronic typewriter......................12
5.1. S-curve...................................................................................................................................12
5.2. IBM Selectric’s performance..................................................................................................12
5.3. 4Ps of innovation of IBM Selectric.........................................................................................13
5.4. IBM’s innovation funnel.........................................................................................................14
6. IBM Selectric’s success and frugal innovation...............................................................................15
6.1. The success of IBM Selectric..................................................................................................15
6.2. Frugal innovation...................................................................................................................15
Conclusion.................................................................................................................................................16
Reference list.............................................................................................................................................17
Introduction

Innovation plays an important role in business which brings more value to the
company. The typewriter is a useful invention in history. In this report, the author
mentions the history of the innovation of the typewriter and shows the differences
between invention and innovation, and analyzed the innovation of IBM’s typewriter.
The application of 4Ps innovation, innovation funnel, and frugal innovation clearly
explain why IBM succeed in the typewriter market.

Major findings
1. Invention and innovation
1.1. Highlight of Invention and innovation
Began the new ideas to create inventions, then improved and commercialized
applications of an invention defined for innovation (Schumpeter, 1939). And the table
shows the highlight of the invention and innovation of the manual typewriter in history,
from the new idea of the machine which typing characters to the innovation of model
typewriters had full functions.

Year Inventors/ Name of Product Category Characteristics


innovators
1575 Francesco A device to replace invention N/A
Rampazetto handwriting (Bland
M., 1998)
1714 Henry Mill A perfect invention N/A
conceptual of
typewriter (Adams
M., 2018).

1802- Agostino Typewriter for the invention N/A


1808 Fantoni; blind ((history-
Pellegrino Turri computer.com, n.d)
1829 William Austin Typographer invention N/A
Burt
1855 Giuseppe Typewriter invention A typewriter had keyborad
Ravizza like a piano keyboard
(peoplepill.com, n. d)

1855 Giuseppe A prototype invention N/A


Ravizza typewriter
1861 Francisco Joao Typewriter invention Built a typewriter which
de Azevedo made from basic materials
and tools
(bookofdaytales.com,
2014)

1864- Peter Typewriter invention various model typewriter


1867 Mitterhofer which had full functions
(Polt, n.d)

1870- Rasmus Hansen writing Ball Radical  Improved the keyboard


1874 Malling-Hansen innovation (Malling-Hansen
society, n.d)
 Inside a wooden box
had the attached paper
into a cylinder
 A carriage which
moving beneath the
writing head, replacing
the cylinder (Malling-
Hansen society, n.d)
1873 Christpher Sholes and Glidden Incremental Applied QWERTY
Laham Sholes, typewriter innovation keyboard
Frank Haven
Hall, Carlos
Glidden &
Samuel W.
Soule
1880s N/A Index typewriter Incremental  New keyboad was
innovation simpler and lighter
 The pointer mechanism
link for the letter
choose for printing

Figure 1. The highlight of invention and innovation

As can be seen from the table, the first time the new idea for typewriter came from the
ideas for a machine can impress letters in the papers in the 16th century. Furthermore,
based on typewriters' first ideas, which inspired different innovators to develop them,
they became having full-function and commercializing products. They also realized the
demands of people at that time to transmit to document. Looked back to the 19th
century, the demand to keep documents by writing was high. Telegraphers, officers,
and liaisons or stenographers needed to gather information then transmited it by hand-
writing was time-consuming. The maximum of 30 words per minute by hand-writing was
recorded in 1853 (Utterback, 1996). So, the invention of typewriters and the innovation
of typewriters were necessary because of the convenience brought for people and the
profits for the firms.

1.2. Differences between inventions of technological breakthoughs, major


innovations and incremental innovations
It started with inventions of technological breakthroughs, which was the new idea for the
typing machine to improve handwriting speed. Most of the early manual typewriter from
1575 to 1867, they were heavily weighed and complex structure and had not the full
functions. All of the early typewriters begin the new ideas of a machine improving writing
speed and were not commercialized. So, it created new ideas for different inventors to
make various typewriter models. Furthermore, the first ideas for the writing machine led
the different innovators to develop the function, design, and typewriter structure based
on the invention. Simultaneously, innovation defined commercialized applications of the
invention, which brought profits for the firms. As can be seen from figure 1, there was no
disruptive innovation in the three typewriters because there was no new technical and
new market for all typewriters until in the 19th century, appearing the first electric
typewriter. However, most typewriters had radical and incremental innovation.
Especially, improved keyboard. The keyboard had a radical innovation in three types of
typewriters. Hansen Writing Ball had an improved keyboard with the character on short
pistons for people who went directly through the ball and helped them write character
typing. Sholes and Glidden had a QWERTY keyboard, and the Index typewriter had a
new keyboard which was simpler and lighter. Hansen also innovated his typewriter by
attached paper into a cylinder inside a wooden box or a carriage that moved beneath
the writing head, replacing the cylinder for incremental innovation. As a result, based on
the innovation, both the three typewriters had mass production and created more value
for the companies. Simultaneously, the inventions of breakthroughs did not make a
profit because they were not commercialized.

2. IBM’s sources of innovation


According to Von Hippel (1988), the innovation of products, processes, or services
brings more profits for firms and individuals. The functional source of innovation relates
to the categorization of firms and individuals. Furthermore, Von Hippel’s statement is
users , suppliers, manufacturers, or third parties such as innovators, researchers, etc.
who can be the source of innovation (Philipson S., 2011).

Users

Customers roled play an important to the firms. They created direct profit for the
company and helped the company have more ideas to innovate their products. Although
user innovation did not create the technological breakthroughs, it adjusted the drawback
of the current typewriter for IBM to develop. In the context of IBM, most of its target
customers were officers, students, and governments who had requirements of the high
speed of typing, limit jam-free and ensured the secret document. The customers
experienced products and provided feedbacks, and perceived the advance in
typewriters. The innovators and firms understood the customer’s demands, so they
developed typewriters suitable for customers and increased the revenue through
commercialization, such as Sholes and Glidden typewriter.

Suppliers
Suppliers were directly provided the materials for IBM to produce its products. The
typewriter innovation is limited in the electromechanics field and expanded in print
technology (Beattie & Rahenkamp, 1981). It led suppliers to improve their materials
such as ribbon and carbon paper to advance printing quality. Ribbons which were the
main details of the typewriter, were made from cotton fabric. So, fabric ribbons were
good at absorbency ink capacity. However, the drawback of fabric ribbons was lint. It
made the quality of printing decrease and unclear characters. As a result, the supplier
researched and changed the material to make the carbon ribbon that can reuse, and
depending on the thickness of carbon paper. New technology was applied for elements
of Selectric typewriter and then solving problems for printing.

3. IBM’s demand pull and technological push


Technological push is the way to innovate technology to launch a new market by
researching and developing science (Isoherranen & Kess, 2011). The development of
technology depends on the entrepreneurs who have the willingness to make more
profits. While demand-pull satisfies the customer's needs and the market (Brem & Voigt,
2009). The firms have to understand clearly about the customer needs to have the
orientation of the innovation products (Day, 1998).

Demand pull

In the 20th century, typewriters' early invention was complicated with complex structure,
heavy design, and limitations, including keyboard, low-speed, and noise when typing.
However, the customer wanted to have a typewriter that was simpler, lighter, and easier
for users. It leads the firms to develop typewriters to serve the customer needs. The
engineer-designer Eliot Noyes, who design the Selectric typewriter, became lighter and
simpler for users (IBM.com, n.d). Furthermore, at that time, the middle of the 20th
century demanded typing documents higher because of business communication
development, recording research reports for people to improve speed typing instead of
hand-writing (IBM.com, n.d). IBM understood the customer needs, and the team
implemented project innovated typewriter had sales professionals who listened to
customer needs and working directly with engineers and designers.

Technological push
IBM got ideas for innovating its products from its talented engineers. Its team developed
the perfect version typewriter, which had a full-function for 7 years (IBM.com, n.d). With
IBM’s technology and its engineer's team, the typewriter market at that time witnessed
the radical innovation was IBM Selectric. IBM improved the speed, accuracy, and
flexibility for fast typing and productivity (IBM.com, n.d). There are three highlight points
in IBM’s technology to develop typewriters, including redesign the golf ball, changeable
type, and limited jam-free. It innovated IBM typewriter's design had typeball to replace
typebars. IBM’s engineer was Horace “Bud” Beattie, who push technology for the
typeball by re-design the mechanism of typeball (IBM.com, n.d). Especially jam-free
limited and having the possibility to change fonts in a document. This function for users
typing in different languages such as Hebrew, Thai, or Japanese (IBM.com, n.d). IBM
also used “carbon film” ribbons to replace inked fabric ribbons. However, it is easy for
users to read from the used ribbons, leading to the exposure of secret documents.
Besides, IBM added correcting function for the typewriter, which has known as
“correcting Selectrics.” According to USA Today (1986), 1960 witnessed IBM Selectric
domination because of radical innovation since the first original typewriter introduced by
Sholes-Remington in 1874 (IBM.com, n.d).

Therefore, technological push combined with the demand-pull model makes IBM a
successful business in the typewriter market, especially dominating the office typewriter
in 20 years (IBM.com, n.d).

4. IBM’s vision, culture and leadership and innovation dilenma


4.1. Vision
IBM’s vision became a successful company and important in technology, which helped
customers solve problems by applying its machine and technology. Furthermore, IBM
introduced special technology for new customers. Also, IBM had the essential resource
for technology investment (Lombardo, 2018). Firstly, IBM focused on the highest
position in the technology industry in the 1960s, when it launched the IBM Selectric.
These typewriters were the most successful commercialization in the typewriter market
and dominated for 20 years. Besides, it improved the available typewriter became
better, simpler and typing faster and limited the drawbacks such as jam paper when
typing or the size of type-ball. It brought convenience and solved-problems typing for
users. Finally, IBM had a steady foundation of development and talented employees,
including engineers, designers, and sales professionals, so they invested capital for
developed technology to respond to customer needs and oriented the technology
market.

4.2. Leadership
IBM’s leadership was based on talent human resources, coordination among each
department, and customer demand to shape company innovation and
commercialization. Firstly, talent human resources were an important role play in the
organizations. IBM wanted to become a pioneer in the technology market, so talented
employees were a core value. They deeply understood the techniques and technology.
In the 1960s, the team developed Selectric typewriters, including engineers, managers,
consultant industrial designers, and sale executives (IBM.com, n.d). They had many
experiences in their fields. Moreover, they coordinate together in seven years to
complete the task. The cooperation among the R&D department with the marketing and
sales department helped engineers innovate typewriters to suit the customer demands
and special radical innovation products. Finally, IBM focused on developing products'
functions to bring convenience for customers they can frequently use, such as applying
for work or study. Therefore, typewriters' success is made from the cooperation and
coordination in different departments of a company and each individual's function.

4.3. Culture
At IBM, most employees encourage THINK, which is also the company's culture
(IBM.com, n.d). From the motto “THINK” which improve to Basic beliefs to direct the
behavioral employees including radical thinking, the succeed of customer, innovation
and respect individual (Lombardo, 2017)

 Radical thinking
The motto “THINK” was suitable for IBM's business activities because Watson realized
that the machine helped people work more productively. Additionally, Watson supposed
that machines' potential could open opportunities for the customers working in a
business to the applicant for their work (IBM.com, n.d). The technological breakthroughs
were innovated by the creation and innovate thinking of employees.

 The succeed of customer

IBM based on customer demands to developed products and the high quality of
customer service frequently maintain the close-relationship with cutsomers. It lead the
company improve its reputation in the technology market. Back to 1960s, the quanlity of
sold-Selctric typewriter dominated the typewriter market in two decades, so it showed
the trust of customers for the IBM’s products (IBM.com)

 Innovation

Innovation products and technology helped the company respond to the market
demands. So, it leads a company to significantly increasing the competitive advantage
to cope with others. The Selectric typewriter was iconic during the middle of the 20th
century because of improved machine characteristics and redesign, making radical
changes to different original typewriters.

 Respect individual

The feature of IBM’s culture was built strong relationship each individual including firms,
suppliers, customers and employees. All of them contributed to the successful business,
they brought more value for the company.

4.4. Innovation dilenma


IBM Selectric dominated the typewriter market for two decades. There were some
reasons for IBM lose the market and did not move to the electronic typewriter market.
Firstly, the appearance of new technology to innovate typewriters from competitors. If
the typeball were the electric typewriter feature, it would replace by a plastic or wheel
mechanism. Another technology installed in the new model electronic typewriter was the
text display that helped users adjust the content mistakes before printing. Also, the
document content was memoried on a floppy disk (The NewYork Times, n.d). The
electronic typewriter was more convenient for users than the electric typewriter.
Secondly, the new electronic typewriter version's price was lower than Selectric
because of the simpler designs and cheaper materials. The electronic typewriter's
competitive price brought more advantages than the electric typewriters because the
firms made more profits, and customers bought the reasonable price typewriters which
had full functions.

Furthermore, the technology market context had a mixture between the old and the new
style. While the small business had less capital to invest in the business facilities, the
large organization used the modern machine to type documents (IBM.com). So, it led
the revenue of IBM from selling Selectric significantly decrease. At the same time, at the
end of the 20th century, the personal computer's appearance made the technology of
Selectric became old-fashioned. As a result, IBM had an innovation dilemma and did
not enter the electronic typewriter market, exit the typewriter market, and focus on
developing personal computers. At that time, the main reason for IBM not to enter the
electronic market was using a typewriter because the demands for a typewriter in the
1980s decreased significantly and changed to personal computers.

5. Analysing the competition between electric typewriter and electronic


typewriter
5.1. S-curve
Market share

90%
50%

1970 (T1) 1981 (T2)

IBM Selectric typewriters Olivetti’s electronic typewriters

5.2. IBM Selectric’s performance


Before IBM launched Selectric typewriters in 1961, IBM had the market share in the
electric typewriter market with the old models of typewriters and had the revenue from
those, approximately 8% revenue in 1958 (IBM.com). Until 1961 witnessed the dynamic
of the sale of Selectric and achieved the peak of 94% in typewriter market share in 1978
(Whitehouse, 1982). However, begin the 1970s (T1), the appearance of the electronic
typewriter was Olivetti competitive directly with Selectric. The producer introduced the
daisy wheel mechanism to replace a typeball which was the feature of Selectric. It had
less expensive than Selectric. Furthermore, Olivetti also had floppy memory storage of
the content and document, and the display helped users adjust documents before
printing. There were many improvements of Olivetti, which made Selectric became old-
fashioned at that time. To keep the revenue from Selectric typewriter and dominate the
electric typewriter market, IBM advanced the function of early Selectric such as the
Smith-Corona electric typewriter in 1973. It had two colors carriage for users flexible
change and increasing accuracy when typing (smithcorona.com). Not only IBM
competitive with rivals by advanced the Selectric models but also competitive in price.
IBM created the later Selectric models cheaper than competitors or sale Selectric with a
discount price of around 5% when bought one or two typewriters and 12% for buy over
11 units (Whitehouse, 1982). It boosted the demands of users through the number of
products. IBM still enjoyed the cost advantage because the price of Selectric was lower
than Olivetti. Although Olivetti had the metal daisy wheel replace the typeball, the cost
of metal was expensive than typeball. Furthermore, there was strong competition in
different rivals in 1970 (T1) such as Olivetti, so Selectric had to improve and decrease
manufacturing costs. It led the standardized production, and the innovation typewriter
was considered incremental.

5.3. 4Ps of innovation of IBM Selectric


Products IBM began as a computing, tabulating, and recording company (C-T-
R) in the 19th century. Until the 1930s, IBM launched the first electric
typewriters and entered the typewriter market. Then, it continued to
innovate electric typewriter and achieved success in Selectric
typewriter in 1961.
Process IBM innovated the function and design of its typewriters which were
delivered to the customers. All of the incremental innovations of IBM’s
typewriter made the customers satisfied and trust its products, which
helped IBM compete with others. Furthermore, IBM typewriters had a
competitive price with others. It attracted more customers to buy and
use frequently.
Position IBM targeted customers who were business, officers of government,
and students. Because in the 1960s, the demand for business
communication increase significantly, and people need the solution to
writing fast and clearly to read. So, the appearance of Selectric to
solve these problems.
Paradigm At the end of the typewriter revolution, because of the significant
falling sales, IBM sold its typewriter for the new manufacturer and
then transferred to developing the family of computer system 360 and
focused on improving personal computer to join the new market with
the new technology.

5.4. IBM’s innovation funnel


Innovation funnel is the process of developing products or services with the input
element's then adjusted them to choose one of all elements to create new development
projects (Wheelwright & Clark, 1992). Applying for IBM
 Gathering ideas

IBM collected the ideas to innovate the typewriters through its customers who were
using and experiencing its products directly. Before the Selectric typewriter, IBM spent
its resources to research and improved the old models . All of the ideas IBM gathered
from its engineers who were experts in the technology of machines. Furthermore,
suppliers also provided ideas for changing IBM’s products, such as film ribbon replaced
for fabric ribbon (Beattie & Rahenkamp, n.d). As can be said that, the ideas for IBM
advanced its typewriter from inside and outside of company

 Developing ideas

IBM continued to filter the collected ideas based on market demands and its customer
demands. Moreover, It evaluated the potential of innovative ideas for its products to
achieve IBM’s objectives. Furthermore, officers, business customers, and students were
IBM’s target customers, so IBM would choose radical ideas to helps them became a
pioneer in the typewriter market.

 Shipping products

Because of the limited resources, IBM had to choose the highest expected ideas that
brought high profits, and the innovation typewriter ensured the customer demands. The
new products had to check carefully before launching. IBM Selectric was the dynamic
product because of radical change in the structure of the model, details, and new
functions that still lacked in the old models.

6. IBM Selectric’s success and frugal innovation


6.1. The success of IBM Selectric

In general, vision, leadership, and culture roled important to contribute to IBM


Selectric's success. Although the development of IBM’s typewriter was based on
customer demands, IBM had the available resources for improving its products, such
as talented employees and technology. Began from the C-T-R company
manufactured calculating, tabulating, and recording to help the company had the
potential to develop in the typewriter market. In order to attain the highest-ranked
market, IBM had to incremental innovation Selectric to limit the drawbacks and add
more details for the full function of typewriters. Additionally, the potential target
customers of IBM were business customers, students, and officers who were using
typewriters frequently to communicate and record documents. Customers provided
feedback for IBM to have new ideas to innovate the Selectric later to compete with
competitors like Olivetti. Not only based on the available technology resource but
also IBM competed in price with others. Selectric typewriters were manufactured at a
lower cost than Olivetti, which had the metal daisy wheel replaced for typeball.
Although Selectric was a reasonable price, it still maintained the high quality of
products and received customer trust. Additionally, IBM developed a lower price for
different segment customers, which helped IBM keep the largest market share in the
typewriter market.

6.2. Frugal innovation

Frugal innovation mentioned innovating technology to cut down manufacturing costs


and increase product performance (Bhatti, 2012). IBM did apply frugal innovation for
its typewriter, which was named Thermotronic, which had a higher quality output. The
printing engines provided the consumable ribbons for the exclusive supplier. They
used the standardization of printing with the different levels in the complexity of
software and electronics to develop the products. However, IBM Themortronic
typewriter had a new technology of ribbons, the manufacturing cost reduction. It led
to an increase in the convenience for users using the new product line of IBM. The
role of frugal innovation of IBM brought more benefits for the customers, including the
low price and the quality of products. The life of Thermortronic was longer than
Selectric, and IBM also reduced the manufacturing cost for the ribbons.

Conclusion
In conclusion, in this research, the authors explained clearly the different types of
innovation and applying for the context. Moreover, analyzing and evaluating the
success of the IBM Selectric typewriter to became dominators in the typewriter
market during the 20th century.
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