Technology, innovation and management
Technology, innovation and management

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Free course

Technology, innovation and management

5.8 Market driving innovation

The acclaimed HBO TV series Mad Men follows the emergence and development of the advertising industry in the USA through the 1950s and 1960s. If you have watched the series you will be familiar with the extent to which consumer demand or need became an increasingly important feature of the market for consumer goods of almost every type during this period. The reasons for this – and the challenge created for manufacturers and retailers – are worth noting:

The rise of social science subjects, such as human and economic geography and the sociology of consumption, generated new ideas about markets and demand, informing and advising governments, which developed ‘predict and provide’ policies. It was also a time of growing consumer awareness and movement, such as those demanding greater automobile safety. The management challenge of this process is relatively simple: invest in marketing.

(Dodgson et al., 2008, p. 61)

Identifying consumer demand was a key feature of the second-generation model of innovation, and marketing became a recognised feature of the third generation. There is, however, another dimension to marketing/advertising activity that becomes increasingly evident as the Mad Men series develops (i.e. as they move deeper into the 1960s). This is the extent to which manufacturers and retailers try to create (and then maintain) demand for a product or service, usually through clever, highly visible advertising and other forms of marketing. In some cases this has been a highly successful strategy. Indeed, by the early 2000s a study that included in its research sample several commercial organisations that were, at that time, recognised as extremely successful concluded that:

Firms are constantly exhorted to become more market driven. However, our study of 25 pioneering companies (e.g. Body Shop, IKEA, Tetra Pak) whose success has been based on radical business innovation indicates that such companies are better described as market driving. While market driven processes are excellent in generating incremental innovation, they rarely produce the type of radical innovation which underlies market driving companies. Market driving companies, who are generally new entrants into an industry, gain a more sustainable competitive advantage by delivering a leap in customer value through a unique business system. Market driving strategies entail high risk, but also offer a firm the potential to revolutionize an industry and reap vast rewards.

(Kumar et al., 2000)

Legislation, regulation, funding, location and even fashions or fads can also be causally significant in driving innovation. However, we now want to turn our attention to a more in-depth examination of the relationship between management and innovation.


Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371