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Management Functions and Behaviour

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Publisher Faculty Notes
Number of Pages 269
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interest magazines, etc. All these new magazines have better reading content, more colour, better layout and are very glossy and attractive to look at. Unable to match these new magazines the circulation of the Illustrated. Weekly of India' and Filmfare' slumped. However, in the last years these two magazines h a v e b e e n attempting to regain the lost ground and have succeeded to some measure. But they can certainly never again enjoy the leading position which
they once did. In developed countries the concept of competition is very closely linked to that of obsolescence. Companies keep introducing successively new models of cars, washing machines, refrigerators, etc., with minor variations, and persuading the customers to discard their older models for the newer ones.
Tasks of a Professional Manager
Activity C List the firms whose products compete with your firm's products. Write down specific options you would adopt to fight this competition. . . . . . . . .
1.5
MANAGING FOR INNOVATION
Innovation is finding new, different and better ways of doing existing tasks. In the context of business, innovation has to be defined in terms of the additional value it imparts to the existing products or services. Value is not expressed in terms of increased cost or price but in terms of the difference it makes to the customer. A television manufacturing company, after years of painstaking effort, introduced a circuit with a neat and clean layout which was extremely easy to service. The company spent large amounts of money promoting this new circuit and its improved servicing but the customers were not impressed and sales did not pick up as per expectations. Customers were not convinced because they could not really perceive the difference and importance of the circuit since its impact on performance was very marginal. The marketing consultant to the company recommended that instead of using plywood the company should use transparent plastic back-covers for the chassis. This would allow the customers to see the circuit and decide for himself the truth of the company's claim. This is an innovation because it makes a vital difference to the customer, since he can see and understand for himself the improvement. Very often it is the customer himself who provides the source of innovation. Digital Equipment Corporation, a U.S. company manufacturing and marketing minicomputers, does not spend its own time and money in finding new business applications for its mini-computers. Instead, it maintains close contact with its customers and relies on them to find uses for their mini-computers. A study

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