Introduction
Dubai International Air Transport Association, popularly known as Dnata, is a leading provider of airport services with its headquarters in Emirati. The company provides flight-catering services, cargo handling services, and aircraft handling services in different airports around the world (Balakrishnan, Moonesar, Awamleh & Rowland-Jones 2017). Started in Al Garhound, Dubai in 1959, the company has experienced a massive growth over the years. The firm started its operations as a cargo handling company with only five employees. Its commitment to its clients and quality of services that it offers has transformed the firm to become one of the largest companies in the United Arab Emirates.
By 1993, the firm had made entry into foreign markets as a way of expanding its market share. According to Fang (2016), during the 2008 global economic recession that affected many countries around the world, Dnata started venturing into new global markets through mergers and acquisitions. It acquired many troubled international companies operating within the aviation industry. The strategy made it possible for the firm to expand its product offering beyond cargo handling.
It started offering catering services and travel agencies besides the cargo services. The strategy also made it possible for the firm to make successful entry into markets in Europe, North and South America, Asia, and parts of Africa.
The success of this company over the past five decades can be traced to its strategic management principles that it has applied, especially when faced with stiff market competition. Dnata has been keen on acquiring its market rivals as a way of expanding its market coverage and reducing the level of competition. As technology emerges as a crucial tool that defines success of firms in the current competitive market, the company has made steps to use it as a means of achieving sustainability in its operations. According to Al-Hajj and Zraunig (2018), some of the largest and most successful firms in the world today have used emerging technologies to achieve growth.
The management of Dnata understands that the only way of managing the current market competition is to embrace technology to gain advantage over its rivals. In this paper, the researcher seeks to investigate the strategic management process for technological innovation at Dnata.
Defining Organizational Direction
Dnata is keen on achieving market success in the global aviation sector and that explains why it has been acquiring firms offering different services in this industry. When defining organizational direction, Sanderson, Lonsdale, Mannion and Matharu (2015) explain that the management of a firm needs to take into consideration various factors. One of the important factors that should be considered is the specialty of the company. The expansion strategy that the management embraces should be based on what the firm can do best in the market. Dnata has demonstrated its capacity to deliver quality services in cargo handling in the aviation industry.
Figure 1 below shows the company workers using large trucks and cranes to load cargo into an aircraft. The company has achieved excellence in this area in terms of speed within which such cargo are loaded, precision in arranging the cargo within the aircraft, and checking the items being loaded to ensure that they do not pose any form of threat to passengers, cabin crew, and the aircrafts themselves. The reputation that this company has created in cargo handling means that it can expand its global market share ease (Mangan & Lalwani 2016). The strong brand is a major asset that it can use to achieve success.
Emerging market trends ad market needs is another area that can help in defining organizational direction. The management of Dnata should be keen on monitoring trends in the aviation sector with the primary aim of identifying a gap in the market that the current players are yet to fill.
According to Hassani (2016), one of the best ways of identifying a gap in the market is to engage with customers. The market research should focus on what these customers feel the current players are not offering as per their expectations. Using its team of innovative employees, the firm can then develop unique products that can address customers’ needs. The management of the company should ensure that it develops products that meet the needs of its customers in the market.
Activities of the rival firms can also help in defining the strategic direction that a firm takes. Godin (2019) argues that being innovative, as a firm does not mean coming up with all the new trends in the industry. In some cases, it may require a firm to imitate what its market rivals are doing. When the competitor develops a unique way of delivering their services to customers, it may be advisable to follow that same path if it will help in lowering the cost and improving productivity.
In cases where the firm is not the inventor of the new technology, it should make an effort of becoming an early adopter. Embracing a new technology as early as possible helps in exploiting benefits it offers before other firms can adopt it. It helps to create a competitive edge in the market.
Changing tastes and preferences in the market is another factor that should be taken into consideration when defining an organization’s strategic direction. One of the most successful product portfolios of Dnata is the food segment. The catering services offered by the firm provide a wide range of food items to customers. However, there is an emerging trend where customers are becoming sensitive about health impact of the food they eat (Poluha 2016). They want to cut down on their calories intake and other food substances associated with lifestyle diseases such as obesity, high blood pressure, diabetes, coronary diseases, and such related illnesses.
The firm should be creative enough to ensure that its food products still meet the good taste that is desired but pose as minimal health risk as possible. The chefs must work closely with nutritionists to enhance health benefits of its food products (Poluha 2016). Making an effort to transform a firm’s products in line with the changing trends in the market ensures that the firm remains relevant to its customers. The relevance helps in enhancing the sustainability of the firm in a highly competitive industry.
Sources and Patterns of Innovation
When Dnata started its operations about six decades ago as a cargo handling company in Dubai, competition was low. The firm had loyal customers who did not have any other cargo handler in Dubai. As such, they had to rely on the services offered by Dnata. However, the trend has been changing over time and currently the company finds itself operating in a highly competitive industry. Its decision to increase its product portfolio to include catering and travel services has only stiffened competition both locally and in the international market. Belvedere and Grando (2017) explain that competition should not always be viewed as a negative force in the market.
In the contrary, market rivalry is a positive force that makes a firm to focus on self-improvement as a way of outsmarting competition. A firm will embrace innovative ideas to develop unique products that meet expectations of customers in the market. It will also focus on enhancing efficiency to ensure that it lowers the cost of production while increasing its productivity. Positive competition often makes firm to be more profitable than in cases where a company operates without competition.
Competition, while being viewed as a positive force that promotes creativity and innovativeness among rival firms, can also become the reason why a firm can be forced out of the market. When rival firms prove to be more effective in delivering the best services to customers at the lowest cost possible, then the affected company can easily be forced out of the market. Grant (2016) observes that Eastman Kodak was once the world’s dominant film company controlling over 85% of the global market share. Its team of innovative employees invented the digital film technology, but the management felt that the new product would cannibalize the current popular films.
As such, a decision was made to ignore such a major invention. Fujifilm stole the idea and went ahead to introduce the digital films ahead of Kodak (Grant 2016). Other firms also followed the same trend and in less than two decades, Fujifilm had become the market leader in the industry.
On the other hand, Kodak would be forced to file for bankruptcy less than two decades after being the dominant player in the industry. The company provides a perfect case study of the dangers that a firm may face in the market if it fails to embrace creativity and innovativeness based on the changing trends in the market. Dnata should avoid falling victim to such situations as it struggles to achieve dominance in the market. In this section, the researcher seeks to sources and patterns of innovation that can help the company to develop new products that meet expectations of customers in the aviation sector
Sources of Innovation
The management of Dnata needs to understand the various sources of innovation to ensure that it can develop new products or improve the existing ones in a way that meets expectations of customers in the market. According to Belvedere and Grando (2017), understanding the various sources of innovation makes it possible for a firm to understand the path that it should take to diversify its product portfolio. Figure 2 below identifies sources of innovation classified into two different classes. It is necessary to discuss each factor that may lead to the discovery of a new product.
Unexpected occurrences
Some innovations happen unexpectedly without the involved individuals having planned for it. According to Thakur (2017), so many important innovations occurred by chance. In some cases, the team may be investigating something else when suddenly they stumble upon an idea that can translate into a product or a strategy of conducting strategies. Dnata should not rely on unexpected occurrences to develop new products or strategies, but it should be open to such eventualities.
Whenever a good idea emerges unexpectedly, it should be taken through a thorough process of screening to determine if it can be transformed into a viable product. Zhao (2014) reiterates that unexpected events may occur within the firm or within the industry. The firm should have the capacity to detect them early enough and take steps to capitalize on them.
Incongruities
Innovation can also be born when the supply is incongruent with the market needs. As explained above, customers’ needs and preferences may change depending on the market forces and trends. It reaches a moment where what the market offers does not reflect what customers want. In the aviation sector, catering services were never considered necessary (Machado & Martens 2015). However, as new inventions emerged, the range of planes increased and it became necessary for firms to have meals offered in these planes. Whenever there is an incompatibility between what is offered in the market and what the market desire, an opportunity for an invention emerges.
The focus will be to address the gap that has emerged in the market. Dutrénit and Crespi (2014) believe that incongruities are the best source of innovation because they focus on addressing a gap that already exists in the market. Dnata should base its technological innovative strategies on this factor. It will be assured of new products that already have customers.
Process needs
According to Majumdar, Guha and Marakkath (2015), the cliché that necessity is the mother of invention has remained true in modern society. Necessity may emerge in different contexts in the normal operations of a firm. One of the common cases is the need to improve production capacity.
As Dnata continue to expand its market share in the catering industry, a need to increase production capacity may emerge. In such a case, it may be necessary for the firm to revolutionize its strategies to meet the emerging needs to solve an internal problem. The facility that the firm currently has may not be capable of processing the large amount of food items needed using traditional methods. In such cases, embracing innovation may be the only approach that the firm can use to achieve the emerging needs. The firm should ensure that the innovation is aligned with the market trends and its financial capacity.
Industry and market changes
Industry and market changes are also another major source of innovation within a firm. According to Schramm (2017), changes within the aviation industry over the past few decades have always been driven by the desire for safety, comfort, and luxury. Airlines want to be assured that companies offering luggage-handling services can assure them of the safety of items on the plane. It means that this firm may need to invest in new systems that can thoroughly scan cargo to ensure that they do not pose any threat to people on board and the aircraft itself. Comfort and luxury are the other factors that passengers currently desire when flying from one place to the other. Dnata would need to ensure that they meet these needs whenever they offer their wide range of products to customers. The fundamental goal of the firm should be to adjust its products based on the changing market and industry trends.
Demographic changes
Demographic change is another major source of innovation within an organization. According to Grubler and Wilson (2014), people of different age and gender have varying tastes and preferences. What baby boomers and generation X desire is significantly different from what millennial and generation Z would prefer. As the number of generation Z customers in the aviation sector continues to increase, it becomes necessary for Dnata to redefine its products to meet their needs. Ratten (2019) notes that most of these youths prefer junk food despite the health risks associated with them.
As it tries to develop and popularize healthy foods, this company may be forced to ensure that all the food items that its customers may desire are made available at all times. Cultural beliefs and practices also have a significant impact on innovation. As the firm continue to serve people from diverse backgrounds, it becomes necessary for them to ensure that they broaden their product offering. The goal of developing a wide variety of products is to ensure that clients of different demographical backgrounds will have products they need whenever they are using services of the company.
Changes in perception
Change in perception is another source of invention within a firm. As tastes and preferences change, customers may have a different view of a product in the market. The cola drinks can be a perfect example of how perception has the potential of defining product offering in the market. For a long time, soft drinks such as Coca Cola were very popular among children and young adults. However, the massive campaigns about the negative health effect of the product have been changing customers’ perception about the product. The added sugar is believed to be one of the leading causes of diabetes. The ingredients are also not suitable for patients with high blood pressure (Wadhwa & Harper 2015). As such, a new perception that soft drinks are not healthy is gaining popularity in the market. Companies such as the Coca Cola Company has been innovative enough to develop coke without sugar as the alternative to the other product considered less healthy.
New knowledge
The emergence of new knowledge is another major source of innovation in different markets. When a new approach of doing things emerge, companies will try to redefine their operations based on the new invention. New technologies have had a major impact on how the aviation sector offers its services to customers. Online ticketing is one of the most important inventions in the industry within the past one decade (Wadhwa & Harper 2015). Airlines are currently using their websites and e-ticketing agencies to allow their clients to make their bookings. Dnata is also using the electronic platform to manage its online customers in the current competitive business environment. The company should focus on using new knowledge, especially in the field of technology, to develop new products that meet the expectations of its customers.
Innovation Patterns
Understanding patterns of innovation is one of the most important steps towards inculcating the culture of creativity within an organization. According to Ratten (2019), a firm can embrace one particular pattern or different patterns depending on various organizational factors. The chosen pattern should reflect organizational culture and principles that define actions that the management takes when to ensure that the firm not remains not only competitive but also sustainable in its operations. The following are some of the common innovation patterns that Dnata may consider as it seeks to achieve excellence in its operations.
Being the best at a specific thing
One of the common patterns that this company can embrace in its innovative strategies is to be the best at a specific thing. Instead of spreading its resources thinly into areas that it has little expertise, the firm can consider focusing on a specific product or a handful of products that it has the capacity to offer its customers the best. Currently, the firm has focused on cargo handling, catering services, and travel services. Instead of introducing new products, the firm can focus on improving these products to the best of its capacity. The process of continuous improvement of specific products would lead to innovative ideas within the firm.
Employees will continuously focus on how to enhance the quality of service delivery. With the help of the current and emerging technologies, the firm will find ways of adding value to their product with the singular aim of being the best at what it does.
Focusing on the small picture instead of the big picture
It is common for companies to be encouraged to focus on the bigger picture in their operations (Fang 2016). This pattern proposes the opposite. It encourages people to focus on specifics instead of generalization. Focusing on the specifics would help in achieving the big picture without losing focus. Instead of trying to achieve several objectives at a time, Dnata will need to select the most pressing issues that would have the greatest impact. It means that all the objectives would need to be classified and ranked based on their relevance to the organization. Those ranked at the top will be given priority in terms of financing and timing.
One objective will need to be resolved before moving to the next issue. Focusing on small successes ensures that employees will remain motivated with the small gains as they move towards bigger successes. The small pictures should be a reflection of the desired bigger picture. It means that as the firm will be making the small gains, it will be on the right path towards realizing the ultimate goal.
Solving real problems in the market for real people
According to Grubler and Wilson (2014), one of the biggest challenges in technological invention in the modern society is that many inventors often focus on solving imagined challenges for imagined clients. The outcome of such mismatch is that the product will not get the desired attention in the market. Instead of taking such an approach, it is necessary to focus on specific people with specific problems within the industry.
Dnata should focus on travelers or aviation companies and try to solve specific problems instead of spending a lot of time trying to imagine problems that do not exist. This pattern is always popular because it eliminates wastage of time and resources. The innovation will result in a product that has a ready market. This pattern can be used alongside other patterns discussed above to maximize the outcome.
Observe and emulate pattern
Being the innovator can be an expensive undertaking. It requires a firm to spend a lot in research to come up with a new product. Sometimes a firm may not need to spend that much when its competitor has already invented a new idea. It only needs to borrow the new concept, modify it to meet the firm’s specific needs, and then commercialize it. As Grubler and Wilson (2014) observe, this pattern only needs a firm to be sensitive to events in the business environment. It should monitor changes taking place in the market, paying close attention to actions taken by rival companies.
It is important to note that sometimes a firm in a different industry may develop a new pattern. For instance, digital payment first emerged in the finance industry (Willoughby & Gore 2018). Currently, this mode of payment has become popular in many industries and in different parts of the world. It is important for the management of Dnata to observe changes in the aviation and other industries to identify potential innovative ideas that it can borrow.
Choosing Innovation Projects
The process of selecting an innovation process is as critical as the innovation itself. According to Grubler and Wilson (2014), an overwhelming majority of new ideas fail to turn into successful products or processes that can help a firm to lower its cost of operations while at the same time increasing its profitability. One of the main reasons why such new ideas fail to materialize is because the firm has failed to select the right innovation project. As a result, the company will end up spending a lot on a project that does not address the main challenges that the firm face or opportunities that it should take advantage of in the market. Dnata should avoid such mistakes in the market and focus on projects worth investing time and money. The following are the main factors that the company should consider when choosing innovative projects.
The first factor is the opportunity that exists in the market. New opportunities may arise depending on the technological advancements made in the industry. When the aviation industry made a major technological advancement in a way that meant planes could fly from North America to Europe or Australia without stopping, new opportunities emerged. One of the new opportunities was the catering services. Spending over 14 hours in the air meant that passengers would need something to eat. Dnata has made a good move in tapping into this opportunity. Fang (2016) explains that although being the first entrants into such new sub-markets is critical in enhancing success, it does not always guarantee sustainability.
New firms can easily emerge offering superior quality products to customers and can easily edge others out of the market. As such, it is crucial for a firm to ensure that it continuously offers high quality products that meet or even surpass customer’s expectations (Willoughby & Gore 2018). The goal is to ensure that they are always thrilled. When they are thrilled, they not only become loyal clients but also evangelists who will advise their friends and family to try the new product. Figure 3 below shows the high quality products that the firm offers to its clients in its catering department.
Potential threat within the external environment is another major factor that can define a firm’s decision to choose an innovative project. The problem can be a new government regulation, changing tastes and preferences, or a new policy that the industry players have decided to embrace. A good example is the materials that should be used handle cargo used in the aviation sector. Grubler and Wilson (2014) explains that after past cases of fire outbreaks in cargo departments that led to catastrophic air crashes, the industry has enacted strict policies that define the nature of materials that should be used to carry cargo.
They need to be light, highly resistant to heat, and airtight to help manage the threat of fire. Such new policies can threaten the existence of a firm, especially if it does not have the capacity to make the immediate changes. The firm can give such challenges priority when trying to develop a new concept in its operation.
Potential internal threat is another factor that should be considered when choosing innovation process. The firm may be concerned about the cost of its operations or lack of specific skills in the market. The new idea should have the capacity of addressing the problem effectively using the limited resources that the firm has. Dnata, just like other aviation catering companies around the world, has been facing the challenge of preparing a wide variety of meals that meets customers’ expectations. The problem is that the firm may realize when it is too late that customers cannot eat certain types of food because of their culture, traditions, or other factors.
When such a client is in the business or first class, the airline may not want a situation where their needs are not met. Dnata has developed a system that allows it to contact travelers several hours before they can board their planes. The firm would then present them with a menu that they have. These travelers would then be allowed to select the food they want. It creates time for the company to prepare custom-made meals for its travelers. Such technological inventions that allow the firm to interact with customers help in improving service delivery.
Collaboration Strategies
Collaboration is an important factor that the management of Dnata should consider as it seeks to embrace technological innovation in its operations. Fang (2016) advises that it is always crucial for a firm to work closely with companies offering complementary products.
In the case of Dnata, airlines are the most important business partners that it should work with closely to achieve its intended goals. Emirates Airline is one of the leading regional air companies that operate from Dubai to various cities around the world. It can be a major partner for Dnata. Sometimes it may be appropriate for a firm to work closely with its rivals in the market, especially if they are facing a similar problem that they can overcome when they work as a unit. Figure 4 below identifies different companies operating in the aviation and related companies that this company can collaborate with to achieve specific goals in the market.
When selecting a business partner, a firm needs to consider various factors. One of the factors that should define the collaboration approach that the firm takes is what it tends to achieve. Fang (2016) suggests that it is crucial to select a partner that has a common but not competing interest. The two firms should have a relationship where success of one would also help the other succeed. Dnata working closely with Emirates Airline would help create such a relationship.
When the number of customers using the airlines services increases, Dnata will benefit directly out of it. It will have more clients to serve, which would translate to greater profitability. Collaborating with online payment platforms will also boost business for both firms. Dnata will have a new payment system that allows clients to make advance payments before they board these planes. The provider of the online payment platform will also benefit by having more customers using its services. Collaborating with competitors should only be considered if it is a short-term arrangement focused on addressing a specific industry challenge. Such steps should be taken to avoid cases of abuse of trust.
Organizing for Innovation
Dnata will need to have an effective strategy of organizing its innovative strategies in the market. In this context, it will need to ensure that these strategies are focused on addressing specific issues in the market. Organizing innovation will help this firm to ensure that it prioritizes them based on the impact that they would have on the firm. Economic, technological, and economic forces may have a significant impact when organizing for innovation. It is necessary to understand the relevance of technological forces. Grubler and Wilson (2014) explain that technology defines the path that innovation should take. The new idea should be based on the most recent technologies to ensure that the intended goal is realized. The compatibility will help avoid cases where the firm has to readjust its strategies to match the new market trends.
Social forces often define the organization pattern that a firm takes when introducing an innovative concept. Innovation should focus on solving social problems both within and outside of the firm. Solving internal social problems enhances cohesion and productivity of the firm. It ensures that the internal wrangles are eliminated and that employee satisfaction is enhanced. Dnata will reduce employee turnover rate significantly. Solving external problems within the society will create a market for the firm. The economic forces will help in ensuring that the innovative concept is economically viable to the firm. It should help increase income, lower cost, or do both.
New Product Development Process
When operating in a highly competitive market, one of the ways of staying ahead of competition is to introduce new products that would help capture new markets. According to Fang (2016), when developing a new product, it is important to ensure that it is related with the primary product that the company offers. Microsoft has become one of the largest and most successful companies in the twenty-first century because of its ability to develop new products related with its main product that it offers to its clients. It has been keen on identifying unique products not offered by other companies in the market, creating a niche where it has no direct competition.
Dnata has the capacity to take the same successful path in the aviation sector to ensure that it becomes one of the leading companies in this industry globally. Figure 1 below shows new product development process that the firm should embrace in its effort to manage market competition.
The first step of product development is idea generation. Idea generation process involves coming up with a concept that can be translated into a new product or services. Ratten (2019) explains that the process is often defined by a wide range of factors. One of the factors that often define a new idea is the constant feedback and suggestions that a firm gets from its clients. The changing tastes and preferences in the market often result in the new to have new products.
Dnata needs to have a system that would allow it to understand the changing tastes of its customers. The feedback would help come up with new ideas of how to meet customers’ needs. According to Grubler and Wilson (2014), creativity and innovativeness is another common factor that often leads to idea generation within a firm. Employees working in different departments within the firm can come up with a unique idea that would help fill a gap identified in the market.
Firms that allow their employees to be creative at work tend to have a higher capacity of coming up with new products in the market. Schramm (2017) note that although higher education attainment tend to make employees more innovative, some individuals have unique talents that make them see opportunities where others do not. As such, managers should always create an environment where workers are at liberty of proposing new ideas irrespective of their position within the firm or academic background. Activities of competitors also have a defining impact on the ability of a company to develop a new idea. The firm may decide to have a product that is similar to that of the rival company or one that can rival that of the competitor.
When a new idea has been generated, the second step is the screening of the idea. The process involves assessing the new concept to determine if it can be transformed into a new product. According to Fang (2016), idea screening is that stage at which the management selects concepts, which are worth investing the company’s resources and time. At Dnata, the management will need to select a team of experts responsible for screening ideas before they can move to the next stage.
Majority of the ideas are often dismissed at this stage for lack of viability. During the process of screening the idea, the team involved with the process needs to engage the generator of the idea to understand why they think it has a potential. Ratten (2019) warns that screening a new idea in the absence of the originator creates a risk where a good idea may be dismissed because those involved in the screening process do not understand its fundamental concepts. Engaging the originator of the idea also creates an environment where the team can explain to them why they feel the idea is not viable. They can provide an advice on how to improve on it so that it can gain approval next time it is presented. In such a case, the idea generator will feel respected and committed to developing new ideas. They will feel valued by the company.
The third step is concept testing. When the team involved in screening is that the idea is viable, they will test the concept. The process involves creating a hypothetical situation of developing a product based on the idea and testing its viability further. The team will focus on determining whether the new product is addressing specific gap in the market and the ability of the firm to develop it cost effectively and as per the expectations of the targeted customers (Wadhwa & Harper 2015).
Concept testing is often considered as an advanced stage of screening the idea. As Grubler and Wilson (2014) observe, producing a new product and making it available to the market is an expensive undertaking. It is important for a firm to test the new idea thoroughly before committing resources to it. Concept testing would require the firm to involve most of its employees to determine their perception towards it. They can be asked to state their views on the viability of the product and whether they feel it should move to the next stage. The idea generator should also be actively involved in this stage. They are expected to explain to their colleagues the relevance of the product, how it will be produced, and benefits that it has to the firm and all the relevant stakeholders.
When the concept is confirmed to be viable, the fourth stage is the business analysis. At this stage, most of the internal stakeholders should be convinced about the relevance of the product in enabling the firm to achieve success in the market. Business analysis involves conducting a comprehensive analysis of the viability of the product in the market. Ratten (2019) explains that business analysis involves bringing experts from different departments within the firm to ascertain the viability of the idea. The marketing department will need to determine if the product can be sold in the market based on the current tastes and preferences in the market.
They can make proposals on possible adjustments that may need to be made to make the product successful. The finance department will need to make their contribution in the analysis by determining if the firm has the capacity to produce the new item in the market.
The department may advise the team about the best time that the firm can launch the new product. The production unit will be expected to inform the team if the company has systems and structures needed for the production, including the right human resource. The department may also guide the team about the right timing to ensure that the cost of production is made as low as possible. Other departments such as procurement and public relations unit will also play critical roles in ensuring that the idea is transformed into a concept that has a potential in the market. The management of Dnata should ensure that all the relevant departments are offered opportunity to make their contributions in the entire process of developing the new product.
The fourth stage, which involves product development, is the first stage when the idea is actually transformed into an actual product. At this stage, all the important stakeholders in the firm are expected to give their unwavering support for the approved idea. According to Schramm (2017), the stage involves producing the prototype. Although the firm may be convinced about the effectiveness of the proposed product, it is not advisable to make mass productions to avoid cases where the firm has products that cannot be sold in the market. Developing a prototype enables the firm to have a look at the product for the first time.
The marketing team will have the opportunity to assess the product and determine if it is acceptable in the market. If they are convinced that it is of the right quality, the firm will need to send it to relevant government authorities to determine if it is acceptable. For Dnata, Civil Aviation Authority (CAA) is one of the entities that may need to approve the new product before it can be released to the market. These authorities will give relevant certificates to confirm that they can be released to the market. Ratten (2019) observes that at this firm should ensure that the new product meets market expectation.
The sixth stage is the test marketing process. The process may be conducted in different ways based on various factors. One of the most common approaches of test marketing is to offer customers sample products and ask them if they feel it meets their needs. According to Willoughby and Gore (2018), this strategy makes it possible for customers to give their verdict about the ability of the product to meet their expectations. Customers can provide suggestions on whether they feel that the product may need to be adjusted to meet specific needs. In case they feel the product perfectly meets their needs, then they can give their approval to the sale representatives.
A company can also focus on comprehensive promotional campaigns to inform the targeted customers about the new product. It can then sell samples at discounted prices to the first few customers. Ratten (2019) says that such strategies are common when it is not possible to offer the product at no cost.
The seventh stage is one of the most important processes, which is the commercialization of the product. The new product will be made available to customers on a large scale. As Grubler and Wilson (2014) say, the firm is expected to make profits from the commercialization of the product.
It means that sales revenue should be higher than the cost of making the product available in the market. The production department should work closely with the marketing, finance, and logistics departments to ensure that the right amount of products are availed in the market at the right time. Producing excess products in the market creates the risk of the firm spending more on storage of the product. On the other hand, having fewer products may cause dissatisfaction among customers when they cannot find products they need at the right time.
The last stage is the review of market performance. The marketing department should engage with customers to understand their feelings about the product. Market reviews makes it possible to understand areas that may need changes to ensure that the product is more successful. Information obtained from the reviews would help the company to understand how to adjust the product to meet expectations of its customers. The management of Dnata should take into consideration all the steps above when introducing a new product based on the emerging technologies. Creating an innovative environment among employees is just the first step towards creating a successful company. Each innovative idea needs to be taken through thorough vetting to ensure that it can become a successful product that would meet needs of customers in the aviation industry.
New Product Development Teams
The team that will be involved in the rigorous process of developing a new product as discussed above should be selected from all the departments within the firm. The top management unit of Dnata should create a new unit specifically responsible for new product development. They can continue working in their respective departments, but when a new idea that needs screening emerges, they should come together and vet it to determine its potential. The marketing unit should have two or more representatives. These individuals will focus on determining the viability of the product before the firm can commercialize it.
The production unit should have at least one representative who will guide the team on how the idea can be transformed into an actual product. One or two representatives from the finance department will provide guidance on the financial implications of the idea to the firm. Insurance unit, customer relations department, and the logistics unit can each have a representative in the team. They should work closely to screen ideas and offer guidance on how it can be transformed into a product.
Conclusion
Dubai National Air Transport Association is one of the leading aviation cargo handlers and catering services providers in the United Arab Emirates. Through mergers and acquisition, the firm has managed to expand its market shares beyond the national borders. The company currently offers catering services, cargo handling in airports, and travel services in North America, Europe, Asia, Middle East, South America, and parts of Africa.
The massive success of the company has been defined by its commitment to its customers and the ability to understand the changing market trends. As competition continues to stiffen, it is necessary for this firm to embrace innovation as a way of gaining a competitive edge over its rivals. Embracing technological innovation will not only help create new products that would increase the firm’s profitability, but also lower its cost of operations. The report has provided a detailed strategic management process for technological innovation that can help the firm to secure its position in the market.
Reference List
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