Starting your Career in the Digital field to Business- Innovate or Replicate?
Name a top e-Commerce platform in India, Flipkart!
Name top-selling product on Flipkart, Xiaomi!
So why are we discussing them? Is there some pun intended, well definitely YES!
If you are an skilled entrepreneur or a budding one, planning to work on a startup project and still wondering whether to innovate or replicate, then this will be a good read.
Flipkart is the highest rated, well-known e-commerce brand in India that has made its root so strong that the company took over other companies in the past to diversify their operations and increase their scope of business but what exactly was the business model of Flipkart? Like Flipkart, other brands also tried climbing the same ladder of replicating a successful startup idea that was amazon and eBay. Then, scale up the business but not startups manage to replicate the concept effectively. In fact, out of 100’s of e-Commerce platform that tried to start their operations in India, Flipkart was one among the few others that managed to survive and nourish.
How Flipkart did it?
Innovation in replication.
We are living in a dynamic world today where things are changing rapidly. With global exposure, we have numerous technological advancements waiting for us to update our knowledge as users. In such times, a company cannot just rely on one factor and have to a count on a hybrid model, so the same way starting a career in the field of Digital business is not just about innovation or replication, if one needs to succeed, then one has to mix both. Flipkart survived because they induced innovation in their process of replication. Then this is only possible when you are skilled.
In the traditional format of replication of business, a company used to do precisely what the innovator did in their process like:
- Using the same business model
- Keeping the same revenue streams
- Keeping the same cost centre and budget
- Following same IMC tools
- Following the same strategic implementation
- Using the same financial ratios to understand the health of the company
And so many!
But here is the catch, Something that worked in one country doesn’t guarantee that it will work in the other as well. While replicating a company needs to understand that there will be a shift in the demographic, psychographic, and geographic of the business and the consumers’ needs and wants might be completely different. Buyers persona for a product can be totally different in 10 other countries. Hence, a company needs to understand the buyer’s persona in their country and then work accordingly to cater to their customer’s needs.
A lot of jargon? Ok, let’s simplify.
James, who is a student in California, uses e-Commerce websites to save his time and at times is willing to pay a little extra to save efforts of going offline for the purchase. James is happy! Amazon is the first website that comes across his mind while placing his purchase. He usually watches amazon ads ten times a day mentioning shop online and saving efforts, which influenced his decision to buy online from amazon. At the same time, Pooja, who is also a Raipur student, wishes to purchase stationary but is on a budget to not spend more. If the same way the Pooja was also shown the ad of Flipkart focusing on sav efforts and omitting cost and later she finds out that the products are costlier online, then Flipkart has lost their client. So Pooja is unhappy! Because Flipkart replicated the exact strategy that amazon employed in customer acquisition which clearly didn’t work here.
On a brighter side, what Flipkart is doing is targeting the specific needs of Pooja and not assuming her conditions in advance, which is innovation in replication. That can only be possible when you are skilled for it. If onions are chopped vertically by a chef, then it will be chopped vertically by you too because sometimes there are very few ways to do Something. Still, you must understand why are we chopping vertically? What can be the best technique, and will it save me some time and effort? The same way, Flipkart realized that they need to understand first the why’s and how’s behind the process of amazon and then work accordingly and make necessary changes depending on their dynamics.
Same way Xiaomi, which was tagged as Chinese apple in the initial days, evolved and did a lot of innovation in their journey and were able to position their brand successfully in the market. Xiaomi currently has the highest market share in the Indian market, and that is all because of their innovation in their replication.
In the real world, replication in business doesn’t only mean to use the exact same formula in the exact same way to get the same actual results as the same recipe may not work every time for everyone. Still, replication is a process in itself which means to understand which model works best in your business and see which company is having the best model and how are they employing it to their strategic advantage.
For a person newly entering the world of business, replication shouldn’t be seen as making a carbon copy. Still, it should be seen as a resource to work up, the data to make logical interpretations and employ in their own business to make the best use of the market practices.
There are various advantages of using replication in business like:
- Reduces the cost of initial research
- Cut the clutter in the business operation
- Reduces the production cost
- Better use of marketing tools
- Gives an extra edge to the newcomers to compete in the existing market
While there are few drawbacks of using this replication too:
- Less reliance on research might hinder the process of learning
- Different demography might result in additional consumer needs
- The marketing tools employed might not provide the same results
- The company will face more significant problems when in crises as it skipped a few steps in the ladder
As per Peter.F.Drucker, there are only two processes in a business: Marketing and innovation, rest all other are cost centres. If a business is able to market itself well, then the only thing left to do is constant innovation. Apple is the prime example of this, Apple always focuses on the innovation and to make their product count in the market they do the product differentiation with their products which helps them to make a different audience for their products. From a mere mask to recently launched AirPods max to their innovation in the chipsets which were launched recently as m1 chips, Apple has always managed to keep an edge by differentiating their product from the others. Apple has their own masks in this covid situation which are different from the other masks which moreover establishes the fact that innovation is a key driving factor in their business model even in such a small, simple product. When it comes to marketing then there also apple has successfully launched many campaigns which were easy to understand for the consumers like their campaign “If you don’t have an iPhone then you don’t have an iPhone” as simple as that. They always focus on the experience of the products and not the features in their ad campaigns which is a major reason why most of the apple users are only concerned with its performance and experience and are never bothered about the spec score and the number game.
This is how business differentiates them from others. So, for starting a career in Business, it is necessary to not fall in the mere debate of thisvs that, Replication vs Innovation etc. but to focus on your strengths and understanding what works the best for you. If a business needs to stand out, then their only focus should be on their product or service differentiation and how well they are touching the lives of their consumers and making the world a better place or else a business will be trapped in the same rat race and won’t be able to succeed in future.