Case Study: Driving Innovation Company: Tesla Motors, USA Sector: Automotive Innovation Type: New Business Model Drivers and Barriers The Challenge How to stimulate the development and manufacturing of electric vehicles and Automotive OEMs investing in electric vehicles Increasing demand for increase sales. green technologies Slow R&D in this sector Lack of infrastructure Highly regulated market (USA) The Solution Tesla released its entire intellectual property portfolio to encourage open source collaboration. Infrastructure Development: Tesla developed supercharger stations, which allow Tesla owners to receive a free high-speed charge in less than an hour. Sale Strategy: Tesla seeks to sell directly to customers (not permitted in the USA) to reduce purchase price and educate drivers on green technologies. The Benefits For Tesla Motors… Boost the development of electric vehicles and relevant technologies. Incentivise the development of required infrastructure. For The Consumer… Increase the consumer demand for electric vehicles. Expected increase of the current market share (13% of US EVs) For The Environment… Cost reduction Emission reduction Fuel: reduction of fuel cost. Reduced CO2 emissions due to an increased number of electric vehicles on the road. Vehicle: reduction of vehicle price due to simplification of sale system. “ […] Tesla Motors was created to accelerate the advent of sustainable transport: if we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. […]” Elon Musk, CEO, Tesla Motors Case Study: Infotainment at Your Fingertips Company: Ryanair, Ireland Sector: Air Transport Innovation Type: New Business Model Drivers and Barriers The Challenge Increase the number of passengers choosing Ryanair by improving Ryanair reputation Increasing number of personal devices Cost for development & implementation Customer resistance to customer services and experience. purchase additional services The Solution Ryanair will make use of passengers’ devices to provide free infotainment. Ryanair is upgrading its content viewing system to enable it to stream infotainment directly to passengers’ tablets, smart phones and laptops. Adverts embedded into the content will pay for the service. No extensive investment in hardware (screens, seats, etc.) required. The Benefits Predicted Benefits (Trials to start in 2015 - to be rolled out in 2016 if successful) )… Customer satisfaction Competitive advantage Increased market share Improved passenger experience … over other low-cost competitors More passengers will choose to fly with Ryanair Ryanair shift to being a more “customer-friendly” airline in the last period resulted in: 6% increase on 2014 passenger numbers (ca. 86.5 million) 88% filled seats Increased profit 40% reduction in complaints More families and businesses flying with Ryanair “ […] Ryanair, having defied the laws of customer service for so long, are repositioning themselves as a customer-friendly airline. […]” Tony Anderson, former Marketing Director, EasyJet Case Study: Pay by Tweet Company: American Express, USA Sector: Financial Services Innovation Type: New Business Model Drivers and Barriers The Challenge Increased Increase the number of customers by popularity for social networks using social media to promote services and products, and to offer instant savings Increasing number System security Customer resistance to social mediabased payments of card users and benefits. The Solution AmEx has been integrating social networks in its core business strategy. AmEx launched Sync Tweet Save which let US card members, sync their American Express Card with Twitter and turn customised twitter hashtags into savings which are loaded directly onto their card. AmEx started offering deals for customers who tweet about the company, and it also extended its Twitter sync feature to enable customers to pay for certain products by tweeting purchase hashtags. The Benefits “ […] Our mission is to be everywhere our card members and merchants are — to engage with them, deliver unique value and create seamless digital experiences that surprise and delight. […]” Mona L. Hamouly, Social Media Coordinator, American Express AmEx currently has 6.5% of the US credit card market. AmEx hasn’t disclosed exact user numbers, but a spokesperson says that cardholder registration in the program is increasing. The AmEx Offers platform is still going strong a few years after its debut. Improved customer experience Attract younger costumers (10 years younger) Customer satisfaction Improved customer perception Customers spending more (30%) Case Study: Revolutionising Retail Company: Amazon.com, USA Sector: Online Retail Type of Innovation: New Business Model Drivers and Barriers The Challenge Increase profit Access new market Improve customer As the leader in e-commerce, Amazon targets to challenge Google's lead ($50bn) in online advertising. Powerful competitors Initial investment experience The Solution A highly innovative strategy has seen Amazon becoming the global leader in online retail today (100 million items in over 30 product categories). Amazon Prime (which grew by millions in 2013), Amazon Fresh (grocery delivery - in continuous expansion) and Amazon's Sunday-delivery (partnership with the U.S. Postal Service) are only a few examples of the successful recent innovations of the company. Amazon is building its own in-house platform to serve personalised and targeted ads in search results based on each customer’s purchase / browsing history. Amazon will offer greater consumer insights. While Google can see what websites are visited, the consumer insight that Amazon possesses on buying behaviour is more powerful. The Benefits With a customer base of 250 million, Amazon estimates to generate at least $1 billion in advertising in 2015 (ca. 1.12% of the company’s revenue in 2014). “ […] Innovation is part of the Amazon DNA and over the past 15 years we have been constantly adding and refining technology that enhances and improves the experience of all our customers. […]” Xavier Garambois, Vice President of EU Retail, Amazon.com Increase profit Access new market Competitive advantage Customer satisfaction “ […] If you are going to take bold bets, there are going to be experiments and failures. Companies that don’t continue to experiment and don’t embrace failure, eventually get in a desperate position. A few successes compensate for dozens of things that didn’t work. […]” Jeff Bezos, CEO, Amazon.com Case Study: Battery Power Companies: Bombardier Transportation, Network Rail, DfT, RSSB, FutureRailway, Abellio Greater Anglia Sector: Rail Sector Innovation Type: New Technology Drivers and Barriers The Challenge A low cost solution to power an electric train over short distances on non-electrified track. Sustainability and emission reduction Reduce cost of rail electrification Performance Duration, recharging time and size of batteries Compliance The Solution A collaborative project between industry and Government to develop a battery-powered train. IPEMU (Independently Powered Electric Multiple-Unit) is a project to establish the feasibility of energy storage to allow an electric train to run over short non-electrified sections of line as an alternative to costly full electrification or using diesel trains. Bombardier adapted a Greater Anglia’s Class 379s train as a test-bed. The train was fitted with two different forms of batteries. The Benefits The prototype IPEMU entered trial passenger service between 12 January and 13 February 2015. “ […] We are always looking for ways to reduce the cost of running the railway and make it greener too. This project has the potential to contribute significantly towards both those goals. […] ” James Ambrose, Principal Engineer, Network Rail Reduce costs Customer satisfaction Reduce emissions For the Industry... Reduced infrastructure and safer maintenance For the Passengers… Cheaper, quieter For the Environment… Reduced CO2 emission, reduced noise pollution Case Study: A Step Closer to Stress-Free Travel Company: FastTrack Company, The Netherlands Sector: Electronics Innovation Type: New Technology Drivers and Barriers The Challenge Improved monitoring/tracking of luggage to reduce the stress and costs associated with luggage loss in air transport. Improved service Low number of competitors Emission reduction Technical barriers Disruptive system Safety The Solution FastTrack developed a new system that enables passengers to monitor their luggage at all stages of their journey. Together with AirFrance-KLM, FastTrack Company developed a new system based on electronic tags that allows airline passengers to monitor and track their luggage. The system is based on three devices: i) ii) iii) an eTag electronic baggage label that attaches to the outside of the suitcase, an eTrack device, placed inside the luggage, a smartphone app. The Benefits For the Passenger… For the Industry… For the Company… Customer satisfaction Cost reduction Competitive advantage Less stress associated with luggage loss Fewer lost bags (currently 0.9% lost luggage in EU) Currently one of the few solutions on the market Time saver Efficiency Faster to track lost luggage (currently 85% returned within 48 hours in EU) Better service and no need to implement any hardware or software “ […] Passengers can transform their bags into connected devices. We use GPS, GSM and Bluetooth so bags are traceable nearly everywhere on the planet. […] “ Hugo Rütter, CMO, FastTrack Case Study: Smart Windows to the Future Company: LG Electronics, South Korea Sector: Electronics Innovation Type: New Technology Drivers and Barriers The Challenge To develop transparent touchscreen displays with applications in a wide range of sectors. Technological challenges Wide viewing capacity (lighting, quality, etc.) Low power consumption Scalability Wide range of Cost applications The Solution Exploiting OLED technology, LG is pioneering the next generation of transparent displays. Since LCD technology presented considerable drawbacks in achieving display transparency, LG engineers Bu Yeol Lee and Binn Kim decided to invest in OLED (organic light-emitting diode). In 2014 LG Display unveiled its first 18-inch Transparent OLED Display, following a $55 million investment from the South Korean government to promote the development of such technology. The Benefits “ […] Transparent display technology has a lot of real-life applications. For example, I can see transparent displays being installed on partitions in an office setting. […] ” Bu Yeol Lee, Chief Research Engineer, LG Display For the Industry Although still at development stage, transparent OLED displays are expected to reach deep market penetration in 2–4 years time. Such a technology can find a number of applications in a wide range of sectors: Entertainment Retail Design Transports Advertisement Aerospace Personal Devices Navigation Systems For the Company Consistent investment in R&D and in ground-breaking technologies gives LG a competitive advantage and global leadership in the display market (ca. 27%). “ […] I think I am writing new TV history. I just hope it is in the near future. […] ” Binn Kim, Chief Research Engineer, LG Display Case Study: Lightweight Seats Lighten the Load Company: EasyJet, United Kingdom Sector: Air Transport Innovation Type: New Technology Drivers and Barriers The Challenge Reduce fuel Reduce fuel consumption and CO2 consumption emissions in aircraft operations without affecting safety or customer experience. Emission reduction Increase capacity Strict regulations Safety Customer perception The Solution EasyJet reduced its aircraft load by working with the supply chain and investing in new seat design. Out of a number of potential solutions, EasyJet opted for the installation of lightweight seats, able to reduce aircraft fuel consumption and therefore cutting costs and CO2 emissions. EasyJet signed a deal with Recaro Aircraft Seating for the installation of 2,500 seats in 14 A320 aircraft. The seats were chosen for their light weight, comfort and fewer parts (reduced maintenance). The Benefits Cost reduction Fuel cost saving: ca £500k pa (new seats only on 7% of EasyJet’s fleet) Customer satisfaction Competitive advantage Increased passenger personal space Competitors already trying to align with EasyJet Emission reduction Load reduction CO2 emissions reduced by 2% 26% total seat weight reduction “ […] With Recaro Aircraft Seating, we have the ideal partner at our side, one who supports us in our efforts to reduce fuel burn and optimise the economic impact of our aircraft […] ” Warwick Brady, Chief Operating Officer, EasyJet Case Study: The Power Behind Open Innovation Company: Jaguar Land Rover (JLR), United Kingdom Sector: Automotive Innovation Type: New Technology Drivers and Barriers The Challenge Competitive Implementation of gas turbine engines to Lack of advantage Emission reduction Increase capabilities complement electric vehicle technology for future hybrid electric cars. capability Investment The Solution By looking for experts outside the company, JLR developed a new engine system for its vehicles. JLR utilised a 3rd party innovation expert to identify two companies with the relevant expertise. The consortium obtained a seven figure investment from the British Government and developed a Open Innovation new hybrid-electric concept car. Expert . Technology Scouting Partnering The Benefits The C-X75 remained a concept car and never went into production. However, the technology developed by JLR and the two partners could potentially be applied to JLR’s future hybrid vehicles A new product JLR presented the new C-X75, a new hybrid-electric concept car with two diesel-fed micro gas engines. Increased capabilities JLR expects to adapt the C-X75 technology in future vehicles. Reduced emissions A theoretical range of 900km with potential zero tailpipe emissions. Case Study: A Game Changer in the Innovation Process Company: Shell, The Netherlands Sector: Oil and Gas Innovation Type: New Processes Drivers and Barriers The Challenge Improve slow Identify, unlock and invest in new technology and exploit new markets. identify new ideas innovation processes “game-changing” ideas to diversify the business, anticipate emerging No methods to Exploit good ideas Lack of a structured within/outside the company innovation process The Solution Shell were seeding innovation culture change in the company. In 1996, Tim Warren, the Director of Research and Technical Services in Shell’s Exploration and Production (E&P) Division, realised that E&P was suffering from an innovation deficit. In order to unlock new ideas, Warren invited Shell’s employees to invest 10% of their time in new ideas. He subsequently allocated $20 million to be invested in some of these “game-changing” ideas. Although initially successful, the initiative slowed down after a few months. There was then a need to institutionalise the innovation process (Action Labs, share and present ideas, rapid investments). Today, the “GameChanger” programme launched by Shell in 1996, is an Innovation Portal for people (from inside and outside the company) to submit ideas that Shell can help to develop. The Benefits “ […] GameChanger is a place to come with your idea and get the support and resources to prove it could work. […]” Russ Conser, GameChanger Manager, Shell Since GameChanger launch in 1996: $350 million invested in 3000 new ideas 250 ideas turned into commercial products A number of spin-off companies created 40% of Shell’s core E&P’s R&D portfolio has evolved from ideas submitted to GameChanger, 70% of which includes collaboration with people outside of Shell. Example: GameChanger provided early support to FLNG, a floating facility that cools natural gas to liquids at sea. Case Study: Improving UK Manufacturing Company: GKN Aerospace, United kingdom Sector: Aerospace Innovation Type: New Processes Drivers and Barriers The Challenge Cost reduction Production time To develop an innovative aircraft winglet design allowing the reduction Fully-automated automation of production processes to reduce the labour cost of assembly. Disruptive change Technical barriers Consistency and scalability system implementation The Solution GKN improved internal manufacturing processes by partnering with national centres of excellence. GKN worked with 2 High-Value Manufacturing Catapult centres, the National Composites Centre (NCC) and the Advanced Manufacturing Research Centre (AMRC) to meet the challenge. The collaboration to radical changes in the way winglets are built and assembled, producing winglets with the same performance level, in reduced time and at a lower cost (lower weight, lower parts count, 50% fewer fasteners and 25% less time per fastening). The project was part of the £12m Structures Technology Maturity (STeM) programme launched by Innovate UK and the Research Councils in 2012. The Benefits Cost reduction Production time reduction Increased capabilities 20% cost saving on manufacturing Faster manufacturing New fullautomated system Thanks to the technologies emerged from the STeM project: GKN is to lead VIEWs, a 13partner, £30m future wing research programme. Boeing contracted GKN to assemble the AT winglets for the new 737 MAX. “ […] The project shows that UK companies, supported by Innovate UK and the resources of the Catapult network, are ahead of the game in delivering high-quality aircraft components […] “ Tom Hitchings, BD Director, NCC Case Study: Towards the End of Airport Disruption Company: British Airways, United Kingdom Sector: Air Transport Innovation Type: New Processes Drivers and Barriers The Challenge Disruption can cause Improve disruption management at London Heathrow - one of the world’s busiest international airports where 50% of its flights are operated by BA. bottlenecks Company reputation Reduce costs Technical barriers Disruption due to the implementation of the new system The Solution BA implemented a dashboard to improve air traffic monitoring and to speed up staff reaction time. IT services company Atos helped BA devise a dashboard that helps the airline manage disruption more effectively and efficiently. Atos worked closely with the airline to develop and deliver the solution, using highly innovative open source technologies. The dashboard is browser-based, available on PCs and mobiles, scalable, and believed to be a unique solution for the industry. The Benefits Cost reduction Customer satisfaction Reaction time reduction Reduction of costs associated to delays and cancellations Reduced number of delays and cancellations Staff alert time reduced from 20min to 20sec Competitive advantage System implementation Unique solution for the air transport industry 23,000 UK users, plus Shanghai and Beijing Offices “ […] Delivery of the dashboard is an excellent example of agile cross-departmental working. This is an excellent product which is a big step towards a more resilient and reliable organisation […] ” Andrew Lord, Head of Operations, British Airways Case Study: Tying the Physical & Analytical Worlds Company: General Electrics, USA Sector: Several (Conglomerate) Innovation Type: New Processes Drivers and Barriers The Challenge Technology advancements How to use the Internet of Things and in IoT & Big Data Big Data analysis to improve efficiency, safety, reliability whilst reducing costs and waste in a number of sectors. Improve safety and efficiency Technical barriers Large amount of data Reduce costs, waste and Cost emissions The Solution GE uses Big Data analytics to draw out critical bits of information from large datasets to improve operations. GE Aviation, a subsidiary of GE Electrics, helps airlines to achieve higher levels of efficiency in four areas: fuel management, navigation services, flight analytics and fleet synchronisation. All GE's systems provide a large amount of data about how they're operating. GE's analytics team analyses such data and identifies ways to improve efficiency. For example, since 2011 GE has been collaborating with Alitalia to improve fuel efficiencies. Alitalia produces over 15Gb of data per month for GE to collect, combine and analyse. By analysing such data, harvested from hundreds of sensors, GE has assisted Alitalia in identifying specific changes to its flight procedures. The Benefits By providing automatic reporting and analysis of daily fuel usage GE helped Alitalia to achieve 1.5% savings in its fuel costs within the first year, a saving of $15 million. Cost reduction Better internal processes Emission reduction Increased safety “ […] Through the power of GE’s analytics, Alitalia has been able to make significant progress in tackling our fuel costs, enabling us to offer more competitive fares to our customers, while reducing the airline’s environmental impact.[…] ” Alessandro Loddo, Vice President of Fuel Management, Alitalia Case Study: A Single-Customer View Company: Nationwide Building Society, UK Sector: Financial Services Innovation Type: Improved Customer Interaction Drivers and Barriers The Challenge Increase profit Increase customer To improve its customer experience, developing intelligent prompts for its experience stored in the company’s CIS processes share. customers as individuals Limited information Improve internal employees and increasing its market Lack of tools to treat The Solution A new CIM platform to provide employees with single-customer personalised information and prompts when needed. Nationwide, the largest building society in the world with more than 11 million members, which had traditionally undertaken most strategic system development in-house, decided to choose an external partner (Portrait) as its core customer interaction management (CIM) platform. The software developed enabled Nationwide to present the single view of each customer, including details of each interaction, and intelligent, actionable prompts to help employees to make the most of each customer interaction. The software has been integrated with the Society’s teller application: employees on the counter can readily access prompts and customer information in a timely way during routine financial transactions. The Benefits For the Company… Since the implementation of the software: Incremental sales exceeding over 200% of original targets. The software implementation paid for itself within 2 years. Nationwide anticipates a greater than 200% return on investment. Improved internal processes (employeecustomer interaction, and sales). For the Customer… Customer satisfaction Increased customer satisfaction due to a more personalised service “ […] We can now treat all 11 million customers as individuals, and are well placed to better meet their needs and thus do more business with more people for longer than we did before. […] ” Simon Banes, Head of Customer Insight, Nationwide Case Study: Let’s Play Company: Marriott International, USA Sector: Hospitality, Tourism Innovation Type: Improved Customer Interaction Drivers and Barriers The Challenge Marriott International was looking for new ways to engage with customers, obtain feedback and find new talent. Increasing popularity of social networks and online games Necessity to understand new generations of costumers Social media moving at a fast-pace Saturation of social media New area for the company The Solution A new way to engage with customers, obtain feedback and discover talent through online gaming. In 2011, Marriott International launched “My Marriott Hotel” – a Facebook game meant to attract potential employees. Players have to run their own virtual Marriott hotel restaurant kitchen, which involves process and staff management, within budget and service quality standards. By capitalising on the social media user’s interest in entertainment, Marriott gains important feedback as to what their customers want and also increase their visibility as a business. Within three weeks of the launch of the game, the Marriott Jobs and Careers page on Facebook received over 10,000 “likes‟ and the game being played in over 120 countries. The Benefits Players from over 120 countries are currently feeding the company with useful information and new ideas. Marriott gained important feedback as to what their customers want. Increased visibility (+450,000 web views). On the wave of “My Marriott” success, in 2014 Marriott International launched a new game (Xplor), which led to 450,000 webpage views with more than 20,000 players so far. Pepsi and Hertz joined the game as sponsors. “ […] players from 120 different countries are simultaneously “caught” in the game, executing strategies and managing their own virtual kitchen. The game has also increased traffic to the company’s career website […] ” Francesca Martinez, HR Officer, Marriott International Case Study: Seamless Payment for Integrated Services Company: Dubai’s Roads and Transport Authority (RTA), UEA Sector: Transport Innovation Type: Improved Customer Interaction Drivers and Barriers The Challenge High number of personal Improve Dubai’s public transport devices Available technology Reduce costs & passengers’ experience by providing a seamless and more sophisticated environmental impact of plastic cards payment method. Security Smart-device battery duration Public adoption The Solution Dubai RTA implemented a new NFC-based payment system through smartphone for all type of transports. In 2014, Dubai’s RTA introduced a new NFC (Near Field Communication) based NOL service (similar to London’s Oyster Card) that enables passengers to use their handset to pay for public transport fare. The service is available on bus, metro, water bus and metro parking, as well as it gives the option to control balance, movements and transactions directly from the smartphone. Passengers can top up the virtual card at RTA terminals, at counters or online through the NOL web site, or, in the near future, through their mobile subscription. The Benefits For the Passengers Customer Possibility to No need to perception (high- check/top up buy/carry a tech service) balance online card For the Industry Single payment system for all transport types Possibility to monitor passenger movements and trends (big data) Reduced environmental impact associated For the with plastic card production and disposal Environment (more than 6 million cards in Dubai today) “ […] The launch of the latest NFC technology solution will be the beginning of a new era on how we empower our customers. […] ” Khaled El Khouly, Chief Marketing Officer, Etisalat Case Study: Video Assistance Company: Schuh (UK) - Vee24 (US) Sector: Retail Innovation Type: Improved Customer Interaction Drivers and Barriers The Challenge Increased popularity of To extend the personalised instore customer experience to customers shopping online. online shopping Available technology Improve sales and customer experience Service penetration Service quality Return of investment The Solution Schuh and Vee24 developed a new way to engage with customers through digital shop live assistance. In October 2011, Schuh (a UK leading footwear retailer) implemented Vee24's live help solution to deliver high touch service on its website. Vee24 is the world leader in live video assistance. Customers can engage directly with Schuh representatives through Vee24’s VeeStudio platform via live voice, video, text, and co-browsing assistance. Schuh’s agents can navigate the website with customers to help them find products, show them webpages, and help them fill out forms to complete their orders. To invite customers to use the service, Schuh uses a variety of methods, e.g. replying to customers’ tweets advising them to click into live help, and including a button to access instant live help in emails. The Benefits For the Company 50% of call centre engagements handled through live help 10% increase in average order value Same conversion rates than physical stores For the Customers 78% positive service rating “ […] hassle free and fast […] “ “ […] Customers love the personalised shopping experience and for Schuh it has become both a fundamental part of our differentiated cross-channel service offer and a genuinely exciting new sales channel […] " Sean McKee, Head of Ecommerce and Customer Services, Schuh