1. INTRODUCTION:

In a country like India where 23 percent of the population lies below the poverty line, innovation is the only mechanism that can make technology economic and accessible to its poor. Innovation strategy is the application of novel ideas and knowledge to make technology more useful to a larger share of the society. Companies create a situation of mutual benefit and growth through the application of innovative strategies. The companies are able to make use of the bottom of the pyramid where most of the untapped market lie, in return enabling the poor to become technologically advanced. The companies are indirectly helping the country prosper through such innovative strategies.

Studies conducted by several researchers show that employee training (Weerd‐NederhofandFisscher, 2003) and adequate financial resources (Chatterjee, 2011) are the most important inputs for building a research and development facility which can translate into organizational success. Very few studies have outlined the importance of innovation strategy in organizational growth, both financial growth and growth in market share. This paper tries to emphasize the importance of innovation strategy in organizational growth.

2. OBJECTIVES OF THE STUDY:

The main objective of the study is to highlight the importance of innovation strategy in achieving higher levels of organizational innovation. The paper establishes this through the examination of the operations of Micromax Informatics Ltd. The paper also aims at listing out the strategies used by the company in order to emerge as a successful entity in the face of competition from foreign companies.

3. THE CASE OF MICROMAX INFORMATICS LTD:

Micromax Informatics Ltd. is an Indian company that has successfully implemented an innovation strategy and achieved success. The company that began its journey as a distributor of computer hardware in the early 1990s has made a mark in the mobile handset industry. The innovative thinking of the company is evident from the fact that it started building its business from rural India. It is a concept that has never been used before.All mobile phone companies focus the cities and neglect the rural population.

Rural India has only limited facilities. Lack of 24 hour power supply is one of the major problems faced by rural India. Some villages still remain to be electrified. Micromax Ltd. has focused on this population of rural India rather than the city dwellers with access to latest technology anda higher standard of living.In a census survey conducted in 2017, it was seen that only 16.4% and 36.8% of households in West Bengal and Uttar Pradesh is electrified. Thus the innovative products of the company are still in demand.

Micromax launched, Yu Yureka its sub-brand in the year 2014. Through the Yu range, Micromax stepped into the health and fitness segment although the products in this category were traded only in the e-market. It has launched models such as Bolt Q3001 and Micromax Canvas 2 in the economy smart phone space and provided mobile phones in price ranges up-to its costliest model, Canvas Doodle 2.

3.1 Innovation strategy of Micromax Informatics Ltd.

It was not an uncalculated measure on the part of the company. A series of studies were conducted to analyses the feasibility and the costa and the benefits involved in selling telecommunication equipment to the villages. They soon discovered that the lack of availability of electricity in many villages could pose a challenge.

It was thus very clear that the basic strategy has to be the development of a handset that was priced affordably for the villagers who either did not have much money to spare or were not well versed with high end technologies.

Therefore the company focused on a cost effective phone that retained battery charge for much longer compared to the standard mobile phones available in the market. Thus the first model created by the company known as MicromaxX1i was priced at Rs 2150 and guaranteed that the battery charge would last for 30 days. Other major features of the product included Dual SIM/ Dual Standby, QWERTY keypad handsets, dual reception mode handsets and universal remote control mobile phones. The product was a huge success in rural India.

Micromax did not just stop at serving the needs of rural people. It went on to realize that there is a huge section of youngsters who were really interested in gaming. The battery charge in popular mobile phones in the market was seen to quickly drain while using it for gaming purposes. Here again the company noticed a segment whose needs were not met. Also, there were not enough low priced gaming phones for youngsters in India. They thus went about solving this problem through the release of Gamolution. Gamolution is a phone that works with Wi-Fi using motion sensor technology and can convert PC/Laptop into gaming devices.

Realizing that a segment of the market was interested in listening to music on the go; it released the MTV music phone MTV X360 with Yamaha amplifiers. Listening to music is a passion of the young and the old alike. Thus it provides products suited for most sections of the society.

3.2 Market Share of Micromax:

Samsung is the most dominant player in India holding the highest chunk of market share. Micromax was one of the top five in terms of market share the first two quarters of 2016. The years 2016 2017 witnessed Chinese hand set manufacturers like Xiaomi, Vivo and OPPO take most of the market share in India, pushing Micromax to lower sales, compared to previous years. Figure 1 shows the relative market share of Micromax as compared to other manufacturers in India from the year 2013 to 2017. The reduction in market share can be easily understood from this representation.

Micromax launched the ‘Nuts, Guts and Glory’ campaign in 2016, to reclaim its lost market share. But it must be said that the campaign did not yield the expected results. In 2017, the company released a few models, planning to regain market share using its pricing strategies. The Evok series of budget smartphones, a premium Canvas Dual 5, and Bharat series of entry-level phones were released in 2017.

Rahul Sharma the co- founder of Micromax has confirmed that Micromax does not intend to follow a traditional business model, it has always emphasized on ‘value for money’. The company has taken a passive position analyzing the market trends and ensuring that it does not incur any losses by releasing products not in demand. Thus the company has adopted the strategy of letting others, mainly its Chinese competitors, explore the new trends.

One of the major strategies of Micromax has been to release only a small number of models that guarantee performance and that are worth for its price (Singh, 2013). Another innovative change that is being taken by Micromax is to change from chipsets of MediaTek to Qualcomm to provide better quality for its customers.

4. LITERATURE REVIEW:

The mobile phone industry is extremely dynamic. The market shares are very unevenly distributed with a few companies owning the major share. Although there is uniformity in terms of product features and standardization in technology, there is a lot of innovation that is still made by companies in this sector (Cecere et. al. 2014). Smartphone industry is the fastest growing market segment todays. Smartphones became the trend in the market only after Rim released Blackberry in the year 2006. Soon after this, the release of iPhone, the smartphone model by Aplle Ltd. took place in 2007 also followed by Samsung in 2008, giving momentum to the trend.

According to Abernathy and Utterback (1978), innovations are continually released in the market.Breakthrough innovation takes place due to the need for variety and the sales for such products continue till a saturation point is reached. An innovation is made commercially successful through the processes of differentiation, acceptance and repeat purchase (Tushman et al., 1998). Innovations that can improve the lives of people in a society and which provides employment to its people can be termed social innovations (Kanter, 1999). Some disruptive innovations can be turned into profitable products by companies (Madhusudan et al. 2017).

Every kind of organization irrespective of the area of operation and industry can innovate (Jha, 2015). Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service (Peter Drucker, 2014). Entrepreneurs have to make a conscious search for innovative ideas with the help of employees and discuss the feasibility and viability of each idea. In addition to this, a composite organizational strategy for innovation has to be applied (Kumar et al. 2013).

An innovation strategy is very important to ensure that all employees work in coordination and with complete knowledge of the big picture (Shiplov et al. 2015). If an efficient innovation strategy is not devised, ‘million dollar ideas’ may get neglected or may lag in progress. Competitors in this time span may get a wind of the idea and there are chances that they will profit from it. Now-a-days some organizations face the issue of ambiguity and lack of direction, thus making strategy formulation very difficult (Rao and Choudhury, 2017). Thus as soon as a feasible idea is identified, it must be developed with the highest efficiency. Employees are the source for all innovation in an organization and therefore the hiring strategy followed by the company can influence its innovation level (Hangarki, 2012). The personality of the employees, also decide their willingness to take risks which further translates to innovations (Mouli et al. 2014).

All innovation begins with effective thinking and coordination of thoughts of the various employees in an organization (Smith, 2005). Often it may be seen that more than one department is involved in the innovation process. This means that numerous employees are also involved in this process. The thoughts and ideas of one employee may not be known to others making it very difficult to coordinate. The innovative ideas and thoughts of the employees have to be shared on a regular basis because innovation is the backbone of organizational performance and sustenance.It also increases the work satisfaction of employees (Bhavani et al. 2016). The effect of organizational climate on the innovation output of the organization is profound. The organization has to invest optimally for the growth of its human resource (Kukreti et al., 2017). It is also important to understand that being granted a patent can act as a huge motivator for organizations to produce and promote innovations. Thus when granted a patent, the employees in the organization explore more in their daya to day activities (Choi et al., 2017).

Companies have to make use of existing opportunities and create its own new opportunities and balance these two processes regularly. Market opportunities that are worth pursuing will be limited in number and will always be claimed by competitors if not utilized properly. New opportunities can be created in the form of differentiation and innovation, as products demanded tomorrow may not be the same as the products preferred today (Burgelman and Syles, 1986).

5. RESEARCH METHODOLOGY:

A method of case analysis has been used in the study. The case of Micromax Informatics Ltd., a company with a high innovation level is analyzed in the paper. The strategies adopted by Micromax Informatics Ltd. constantly emphasize innovation as the key to success. The data used for the research is secondary data.

6. DISCUSSION:

The success of Micromax Informatics Ltd. indicates that the business model and strategies championed by it are worth being emulated. The rural population of India is often neglected by mobile phone manufacturers. The most obvious course of action for most companies would be to sell their products to the most accessible section of the market.

It is often very difficult to sell technologically advanced products to the rural population in a situation where the villages do not even have constant power supply. Innovation alone has enabled Micromax to serve this section of the market with unmet requirements. Although the growth of the company has not met the expectations, the company sticks to its innovation strategy. The company has released its latest models which have made use of new technology to reduce its drawbacks and capitalize on its strength. Other firms in the sector may emulate the model by developing their own indigenous technology and serving such sections of the market that are left unattended by the principal players in the sector.

7. CONCLUSION:

The proliferation of low cost mobile phone segment and the rapidly changing face of technology are the most important reason for the reduction in market share for Indian mobile handset manufacturers like Micromax. Although Micromax is finding it hard to compete with competitors, especially Chinese phones which seem to flood the market, its innovation strategies keep it afloat and growing. It may be said that innovation is the key strategy that enables the company to sustain in a market that is ruled by large players like Samsung and LG. It can be concluded that if the company coordinates all it departments and innovates continuously, it can provide products with the latest technology to Indians without having to charge a high price. All Indian customers would prefer the products of an Indian company over that of a foreign company provided it is able to deliver the same or even superior quality.

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Received on 09.03.2018 Modified on 12.04.2018

Int. J. Ad. Social Sciences. 2018; 6(2):139-142.

DOI: 10.5958/2454-2679.2018.00014.2