Industry Analysis For Consumer Electronics Innovation Essay

Consumer electronics industry covers broad scope of contraptions and electrical goods and other place amusement merchandises like TVs, DVD participants and portable music participants, cell phones, etc.

The consumer electronic industry is ? 4,200 Billion industry Worldwide, and it is still traveling through a transformational growing. And in the age of entire convergence and digitization of every facet of life, invention is a premier influential factor. And a bulk of the gross and market portion in the consumer electronics industry rests in the custodies of a little figure of elephantine technological corporations from around the Earth, States like South Korea, China, USA, Japan, etc are the leaders in technological inventions brought to stop consumers, and set new benchmarks in managerial efficiency for the World to fit up to. We shall be researching some of those companies and how they stimulate invention within their administration.

The CE industry is resilient but non immune from the concern rhythm. In a tough economic system our merchandises offer high value for amusement and an entry point for enterprisers making new concerns, ” said Shapiro. “ Innovation will kickstart the economic system. The 2009 International CES is a cause for optimism with some 20,000 new merchandises and 300 new exhibitioners. ”

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

The Consumer Electronics industry has witnessed sustained growing in 2008 non greatly set off by the economic recession. Consumer Electronics Association ‘s estimation of terminal of the twelvemonth grosss for 2008 depict that the industry crossed a new ceiling of $ 172 billion, a respectable addition of 5.4 per centum compared to 2007. While in the financial twelvemonth 2009, the domestic cargo grosss remained unchanged at $ 171 billion, worsening by 0.6 per centum by 2008 standards.A

The merchandise wise cleavage of the consumer electronics industry shows that primary income bring forthing merchandise for the industry are the digital Television shows, representing 15 per centum of entire industry gross revenues. And with the alteration in the recent trends the transportation of digital telecasting closed on to 35 million in the twelvemonth 2009, increasing by about 6 per centum over the old old ages estimations. And the most competitory industry is the LCD television fabrication industry organizing up to 77 % of the consumer base.

The world-wide Consumer electronics market including OEM ( original equipment maker ) and the retail merchant ‘s gross revenues were valued at about $ 681bn in 2009, a lessening of 1.7 % over 2008. Turning at a consistent CAGR of 8.4 % during the old ages 2005-10

( Data Source: )

Key Industry facts

Cardinal Industry Figures



Industry Gross


? Million

Gross Growth



Industry Gross Product



Number of Enterprises


Unit of measurements




Entire Wagess


? Million

( Source IBISworld, 2009 )

These figures indicate that the consumer electronics industry is a really big industry with high sums of gross and production. Besides it possesses exponential growing possibilities. Given the handiness of technological promotions and resources at disposal, invention is of indispensible importance to hard currency in on the broad and big consumer base.

Structural analysis for Consumer Electronics Companies

“ Organizational construction is the manner, the concatenation of bid plants within an administration, as every administration is made up of a big figure of people, it will necessitate some signifier of organizational construction. “ ( Cuneen.P, 2008 ) The manner the construction is set up, defines the manner in which new thoughts and communicating can flux within the administration. Therefore taking the right sort of construction depending on the administration is necessary, stoping up with an overtly stiff or flexible construction can be fatal for an administration ‘s endurance.

A level organizational construction means more forces working at the same hierarchal degree, advancing more horizontal communicating, frailty versa a tall construction means more degrees of hierarchy means the range of thoughts and communicating is limited with the figure of barriers and degrees.

Apart from the technological facet of invention, another really of import facet to be kept in head is cultivating invention within the administration by advancing smooth flow of new thoughts to be communicated within the administration rapidly and expeditiously. This depends mostly on the managerial construction or the hierarchal stairss present in an administration. Henri Fayol ( 1916 ) propagated the term ‘Scalar Chain ‘ mentioning to the authority/command relationships from the top to bottom in an administration, the shorter the scalar concatenation, the more flexible the communicating is.

Structural Innovation is centred on the systematic attack that organisations use to pass on new thoughts for merchandises and services. It is based on tapping the originative thoughts of the organisation ‘s employees while at the same case utilizing those thoughts to make a consistent watercourse of good inventions to the consumers, in a productive mode.

To better understand the structural factors in the consumer electronics industry, allow us take some existent life illustrations of companies and see how they stimulate invention within their administrations.

Structural Innovation in consumer electronics companies:

LG Electronicss:

The Korean electronics giant in 2010 exhausted $ 25 Billion on its R & A ; D budget and programs to turn its current 27,000 R & A ; D staff to 30,000 in 2011. Comparing LG ‘s 2001 R & A ; D investing $ 1.7 Billion, the company has a minimal 21 % growing per annum in its R & A ; D investing since so. This reflects the company ‘s attempts and steps to advance invention. Besides LG is advancing invention within its administration construction by promoting its employees to actively take part in pilot undertakings to develop new merchandises with assorted service suppliers.

( Data beginning: hypertext transfer protocol: // )

Besides LG has set up its ain LG Electronics ‘ Institute of Technology to develop and cultivate its employees and to enable them to hold the cognition about the latest film editing border engineerings. They have separate research research labs for IT engineering, Cellular communicating, LED and Multimedia processing labs, etc.

( Beginning: LG U.K functionary Website )

HTC Telecommunications:

A study fromA Bernstein Research depicts that in 2010 HTC spent $ 500 million in its R & A ; D budget, and programs to increase it to $ 800 million in the fiscal twelvemonth 2011. The Chinese phone shaper, gained considerable lead in the cell phone market in the past 4 old ages by bring forthing high quality smart phones at extremely competitory monetary values in its sections in coaction with successful nomadic OS platforms like Windowss phone 7 and humanoid. It is now one of the front line cell-phone makers and it relies to a great extent on its pricing and advanced smart-phone designs. Htc encourages its employees to come up with smart thoughts for its phones and considers them for mass production, the ‘Htc Sense ‘ HTC ‘s proprietary, intuitive user interface. Which is a extremely successful merchandise by Htc was an thought of an applied scientist from its hardware section.

( Data beginning: hypertext transfer protocol: // )

HTC considers itself an invention centric company, non merely has it invested in a strong R & A ; D squad organizing 25 % of its entire employees and the company besides boasts a high-toned fabrication premises, situated in Taiwan.


Samsung spent a record interrupting $ 22.9 Billion on its fabrication and R & A ; D development in 2010, in order to beef up its place in the Global market, and to foster transport out its extended research on brassy memory french friess and LED shows. Samsung has had a tradition of open uping in show engineerings, and has reiterated that fact a legion times. This is the result of its extended involvement in advanced research and deviating equal work force and resources that are at its disposal into its administration ‘s nucleus construction.

Figure Samsung Innovation Philosophy

The Korean electronics Titan considers ‘innovative merchandises ‘ as one of its cardinal strengths, and it aims at advancing the values of the company on the footing of its employees and spouses, Samsung President and Chief Design officer Boo-Keun Yoon discusses about invention in the administration that, “ 1. Differentiation: Create merchandises with higher value ( in image quality and merchandise public presentation and design ) than bing merchandises offer. 2. Cost efficiency: Supply the greatest value with the least costs. 3. Speed: Introduce the best merchandises foremost in the market. ”

( Data Source: Samsung UK functionary Website )

Corporate Culture analysis for Consumer Electronics Companies

McKinsey explains an administrations corporate civilization as “ the manner we see and do things around here ” ( Edersheim.E.H, 2006 ) . Culture by and large means the values that the administration cultivates within itself and it affects each and every facet of its operation, civilization is the individuality of any administration. The civilization encompasses what the administration is good at, and what in the yesteryear has worked good for the administration.

Depending on its values and vision, the corporate civilizations in assorted administrations may change and hold a great influence on the advanced activities, like the power civilization, which is really dominance centric and stiff, or the individual civilization which is really individualistic and flexible. Let us discourse the corporate civilizations of some taking consumer electronics administrations and see how they infuse invention into their civilizations.

Most successful and advanced companies, mould their civilizations around the values of emancipating thoughts and resources and let them to turn into something of a value to the universe and to the company, some really familiar and related illustrations are enlisted as follows.

Sony Corporation:

Sony is a market leader in the gambling and show fabrication sector, ‘Playstation ‘ their enormously successful and advanced gambling platform is a merchandise of a originative invention scheme, which involved a combined squad of R & A ; D and bet oning experts put together, they created a ‘Play ‘ room in their company, which allowed the squad members to play games on their console and improvise and prove their games within the administration in a ‘slack ‘ and loosen up atmosphere, this chainss out the possibility of rejection from the consumer side, as the merchandise has gone through extended real-life testing and alteration by the company ‘s applied scientists. This is a wonder driven invention activity and has yielded successful merchandises to many companies.

Apple Incorporated:

Apple ‘s corporate civilization is rather different, when compared to its viing administrations like Samsung, Sony and LG. Apple believes in a closed environment research or instead an ‘insulated ‘ attack towards an administrations corporate civilization. However it does non in any manner undermine the importance of invention. Apple iPod, the most successful merchandise of the company, that gave it the phase to make where it is today, was in its initial phase a jilted merchandise as Tony Fadell, the applied scientist who came up with the construct of a portable mp3 participant as the iPod, However Steve occupations the CEO of Apple Iraqi National Congress saw it as an chance and therefore it became the turning point for the company. This reflects Apple ‘s civilization of credence of errors, and positively encouraging hazard pickings.

Motorola Computers Ltd:

Motorola has been a good known name in the consumer electronics industry for its cell-phones, accoutrements and networking devices. It has been a long standing name, since the earlier yearss of technological invention. The company has been able to last and suppress its legion new rivals by cultivating a civilization of ‘Identification of Originality and Inventiveness ‘ . A really good illustration of its civilization is that the Motorola ‘Razr ‘ phone, was discarded as a paradigm by its Board of Directors. But the CEO of the company saw it as a alone and Original attack of Research and Development, and brought it to the multitudes, the device sold 100 million units worldwide.

Nintendo Games:

The Nipponese gambling company, behind the iconic super Mario bros. And other wildly popular gambling rubrics are a true pioneer in footings of fresh thoughts and new attacks towards traditional challenges. Nintendo ‘s administration civilization promotes “ Out of the Box ” thought. At Nintendo, a portion of each of its employees clip at work is allocated to concentrate on new and kinky thoughts. The Nintendo Wii console, the first 1 in the industry to incorporate motions and gambling, and come up with the construct of ‘Motion Gaming ‘ was so a encephalon kid of such ‘Out of the Box thought ‘ . This reflects the importance given to new thoughts and chances in Nintendo ‘s corporate civilization.

These illustrations clearly indicate how, the nucleus values and civilization cultivated in an administration, is clearly linked to invention and successful direction.

Human Resources and Innovation

In the words of Michael Armstrong, “ Human resource managementA ( HRM ) is theA strategicA andA coherentA attack to theA managementA of an organisation ‘s most valued assets – the people working there who separately and jointly lend to the accomplishment of the aims of the concern. ” ( Armstrong. M, 2006 )

Invention and Human Resources are straight related, as HR is the procedure responsible for using new blood in the administration, which in bend shall come up with advanced thoughts and schemes. The people working in an administration are the existent strength of any company, therefore enrolling and keeping the right people is a necessity for any company to healthily last and remain up to tag with the competition. Thus the premier map of HR in any company is to get and develop efficient and strong forces. Besides it is indispensable to maintain the administration ‘s nucleus values intact while inculcating invention with new thoughts and new employees, they are evaluated for their public presentation and compatibility with the function they are required to make full.

To understand the relationship of invention and HR better, allow us take some practical, existent life illustrations of some companies and how they stimulate invention with Human Resource direction.


Apple is one of the most airy administrations in the consumer electronics industry, the consequence of which can be clearly seen in its productive and advanced merchandises twelvemonth after twelvemonth. “ Airy companies are prime establishments in their industry, widely admired by their equals and holding a long path record of doing a important impact in the universe around them ” ( Collins and Porras, 1991, P.39 ) . Apple clearly sets invention as a top precedence when it comes to recruitment, it defies the conventional enlisting and appraisal tools, their attack towards engaging new people is stated by the undermentioned words “ Do n’t anticipate concern as usual ” ( Apple U.K functionary web site ) .

Apple ‘s enlisting slogan:

Equal chance enlisting:

Apple gives equal chance of being selected for a occupation to freshmans, college alumnuss, and veteran applied scientists, they want people who fit the function instead than people who fit the enlisting specs sheet.

‘Prepare to be inspired ‘

Apple does n’t desire its employees to be victims of bureaucratism and red-tapism. Apple believes in enrolling divine new people, who have original and advanced thoughts, they propagate unfastened communicating, and unfastened communicating of thoughts.

Casual attack to work:

Apple does n’t believe in holding its employees wear neck-ties and suits, they are more interested on the terminal consequences instead than show concern. They give their employees the freedom to take to have on what they are more comfy in.

Flexi-Time hours:

Apple does n’t adhere its employees with the stereotyped ‘9 to 5 ‘ working hours, they encourage employees to work when they feel they are at their productive and advanced best.

Nokia Inc. :

Nokia has come a long manner from being a little wood mush and paper, mill in Finland, to the largest Cell-phone maker in the World. Most of the recognition of this tremendous accomplishment is given to its ‘Superior Process ‘ of enlisting, Nokia ‘s cardinal invention strength comes from its people.

Not merely does Nokia manus pick the cleverest and technology-focused people with experience and creativeness, but besides it searches for people who are better suited to the company ‘s civilization. Nokia is more aimed at enrolling people abroad, because it is difficult to happen a big and efficient work force in a state with a population of merely 5 million. Harmonizing to Dan Steinbock, whose book chronicles the Nokia revolution, was that Nokia acquired ‘the most technologically savvy persons in all of Scandinavia ‘ ( Steinbock. D, 2007 ) .

Some of the procedures involved in Nokia ‘s advanced Human resource direction are:

Rigorous and extended interview procedure

Team-Based Compensation Methods

Team focal point and Job Flexibility

As an administration ‘s size grows, it is hard to keep the same high degrees of invention, but Nokia found a fresh manner of covering with this challenge, puting up NVO, or Nokia Ventures Organisation, the company ‘s attack to fostering natural invention. NVO created new chances for Nokia by embarking outside Nokia ‘s traditional range of concern and the new ventures invariably bring new thoughts and people into the company. In this mode, Nokia successfully sustains invention through human resource direction. ( Press.Nokia.Com )

LG Electronics Limited:

LG ‘s human resource policies aim at making a working environment where an employee is encouraged to develop all their accomplishments, and besides honoring them for their accomplishments. This of course develops an attitude among employees to be more advanced and productive, as they are given rewarded for their part to their company.

When it comes to recruitment, LG is inclined towards enrolling the ‘Right people ‘ , as it is stated on LG ‘s enlisting web site. They need Peoples who are committed and enthusiastic squad workers, besides they must be professional and experts in their several field.

LG ‘s HR policies:

Creativity and Autonomy:

Lg respects the creativeness of its employees, it allows each of its employees to pattern their creativeness to the upper limit and besides back up their method of acquiring things done.

Performance based wagess:

The public presentation of the employees is measured and they are rewarded as per their marks.

Equal chance:

The employees of LG are given equal chance for choice and advancement, irrespective of their sex, age, gender, nationality, etc

Long term position:

It is a cardinal factor for LG to keep a long term position for its human resource policies.

Training and Development:

LG has set up instruction Centres all over the universe to develop and cultivate its employees and invariably upgrade their accomplishments and creativeness, so as to maintain the company full of skilled and advanced forces. It has set up assorted specialised labs to develop its employees in their field of specialization. And it besides gives the employees, entree to the latest engineerings.

Retaining and Honoring the Employees:

LG offers its employs, the benefits of fixed wages and flexible wages, the fixed salariesare determined every twelvemonth through an rating procedure, while the flexible salary theoretical account outputs immediate wagess to the employees for their public presentation and invention.

The benefits such of an extended enlisting policies and the degree of inputs put into them is certain to honor the company in return. For illustration: The Korean LG R & A ; D squad designed the LG ‘Cookie ‘ a simple $ 200 smart-phone, which reinstated the LG ‘s place as the World ‘s 3rd largest smart-phone maker.