The entry of new and innovative products into the market has always involved a fair share of embedded uncertainties and risks, and ‘magic box’ is no exception despite its inherent advantage of making it easier for movie goers to enjoy their popcorns and coke in one holistic product.
Scholars have defined risk as the likelihood that an undesired result – or the nonexistence of a desired effect – may disrupt a person’s project (Wu et al 2010).
The present paper aims to evaluate the key risks and mitigation strategies for the innovative ‘magic box’ product.
Although it has been suggested that the ‘magic box’ is made from environmentally friendly materials, available literature demonstrates that not only do consumers decline when products are of inferior quality, but market domination of such products shrinks too relative to goods of superior quality (McIntyre 2011).
To mitigate against this risk, we have to develop high-quality ‘magic boxes’ with the aim to attract many movie goers and ensure market retention.
Additionally, we must continually improve our tools and skills support process to develop the capacity to beat our competitors through the provision of high quality ‘magic boxes’ and enter new markets with a one-off product which people can use to enjoy their popcorns and drink coke in an extremely easy routine (Riswadkar & Jewell 2007).
Moving on, we must guard our innovative product against competitive risk, which occurs due to unwillingness of a counter party to meet its responsibilities, and also due to perceived failure to consider shifts in our movie markets and actions of other competitors who may want to introduce ‘magic box’ imitations into the market (Brady et al 2012).
To mitigate against competitive risk, we have to employ adequate instruments not only to collect market data on demand trends of our product, but also to assist us adapt to new customer tastes, needs and expectations (Riswadkar & Jewell 2007).
Consequently, these tools must help us focus on the customer with the view to provide them with a ‘magic box’ that is customized to fulfil their wishes and desires while enjoying movies in the theatre.
The risk to reputational status adversely affects an organization’s maintenance of value advantage, as well as its innovativeness and customer base across relevant constituent groups (Dowling & Moran 2012).
A bad image or reputation, according to these authors, can result from engagement in various activities, including environmental degradation, engagement in child labour, unfair trade practices, corruption, use of substandard products, and workplace harassment.
We as a team definitely want to maintain the good image of our product because image is positively correlated with increased sales, employee productivity, and competitive advantage (Henard & Dacin 2010).
Consequently, the mitigation strategy for the risk to reputational status would be to ensure that we have sufficient tools and skills support to act as an exemplar of how entities can use naturally occurring materials to produce ‘magic boxes’ without adversely affecting the environment.
Additionally, we must be guided by early planning in development of the product not only to achieve sustainability in the use of available raw materials to make the ‘magic boxes’, but also to gain trust among our customers that we can deliver on our promises without using unorthodox production methods (Kumar & Schmitz 2011).
Adequate planning and development of trust will always ensure a steady demand of our product and an expanding market portfolio.
Reference List
Brady, M.K, Voorhees, C.M & Brusco, M.J 2012, ‘Service seethearting: Its antecedents and customer consequences’, Journal of Marketing, vol. 76 no. 2, pp. 81-98.
Dowling, G & Moran, P 2012, ‘Corporate reputations: Built in or bolted on?’, California Management Review, vol. 54 no. 2, pp. 25-42.
Henard, D.H & Dacin, P.A 2010, ‘Reputation for product innovation: Its impact on consumers’, Journal of Product Innovation Management, vol. 27 no. 3, pp. 321-335.
Kumar, S & Schmitz, S 2011, ‘Managing recalls in a consumer product supply chain-root cause analysis and measures to mitigate risks’, International Journal of Production Research, vol. 49 no. 1, pp. 235-253.
McIntyre, D 2011, ‘In a network industry, does product quality matter?’, Journal of Product Innovation Management, vol. 28 no. 1, pp. 99-108.
Riswadkar, A.V & Jewell, D 2007, ‘Strategies for managing risks from imported products’, Professional Society, vol. 52 no. 11, pp. 44-47.
Wu, D.D, Kefan, X, Gang, C & Ping, G 2010, ‘A risk analysis model in concurrent engineering product development’, Risk Analysis: An International Journal, vol. 30 no. 9, pp. 1440-1453.