I follow @visualcap on social media and this wheel outlining the different types of innovation caught my eye. I couldn’t help but think about how this applies to the success of some of the most valuable South African brands and specifically how these factors relate to success in franchising.
This infographic showcases the culmination of years of in-depth research from Doblin, an innovation-focused firm now owned by Deloitte.
According to Doblin, the first four types of innovation centre around the configuration of the company, and all the work that happens “behind the scenes”. Let’s look at how some South African companies have applied these methods of innovation.
|The funeral industry in South Africa has managed to make their money from something that is not perceived as their main service offering, which most people think is conducting funerals, but rather from selling insurance policies.
|Famous Brands have used vertical integration of their supply chain to eek out margins of profit in every stage of the process. From farming and manufacturing to delivery via their franchised outlets to the end-user. Low margins through an integrated supply chain, leads to sufficient margins to keep investors happy further extending the “network”.
|Large retail groups who convert to franchised outlets, allowing existing staff and branch managers to stay on as franchisees is a good example of aligning talent and assets to create innovative structures.
|One cannot write an article on innovation (especially in franchising) without using McDonald’s as an example. The standardisation of their products and processes have allowed them to grow globally. And even though the standardised processes are strictly followed, they have still built in systems to encourage innovation. For example, the new ideas/product process where franchisees can submit ideas for new products. The Big Mac and the Egg Mc Muffin were franchisee ideas.
Desjardins, the writer of the Visual Capitalist article says: “When most people think of innovation, it’s likely the offering category that comes to mind. Making improvements to product performance is an obvious but difficult type of innovation, and unless it’s accompanied by a deeply ingrained company culture towards technical innovation, such advancements may only create a temporary advantage against the competition.”
|Product Performance & Product System
|Dischem has distinguished themselves as the leader in the pharmacy category through their range of house-brand products which have become just as popular as branded health goods, but especially amongst price-conscious buyers. Dischem’s integration of the wide range of health and beauty product and service categories have ensured a superior product system. Few competitors have managed to create the range and experience offered by Dischem’s complementary product and services.
Desjardins warns that innovations aimed at the Customer experience are “tested” by the customer, so rolling these out should be done cautiously.
|Brand, Channel & Service
|Yuppiechef has managed to use each of the “Experience” factors to establish and grow a successful brand that has now started opening retail stores, thereby offering more than one channel to reach customers. Not only have they created a recognisable brand with a strong channel but they have delivered the ultimate in personalised service. The usual service claims of quick delivery to anywhere in the country, excellent after-sales care and good quality products are not even the service offerings they brag about. But rather the personalised handwritten notes that you get every time you order. And my absolute favourite, the “good luck” coin they send when you have purchased a knife.
|In the modern age of social media, engagement by consumers is key to growing a brand’s profile. RocoMama’s has succeeded in this experienced driver by encouraging customers to post pictures of their food. They have even gone so far as to create lighting in their stores that ensure the products look as good, if not better, on the web, as they do in real life. Through customer engagement (and good product) they were able to grow their brand to 65 stores in a very short space of time.
If you want to see all ten of these innovation methodologies hard at work, check out @dripfootwearsa on social media or visit their website on www.dripsa.co.za to see how a local entrepreneur who started manufacturing and selling sneakers during lockdown has realised his “township dream”.
Desjardins article ends off by referring readers to Doblin’s free list of over 100 tactics that correspond with the aforementioned framework.
I for one am excited to see how Innovation continues to develop in our emerging economy.