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Global Recession Creating Innovators

Global Recession Creating Innovators

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Published by Saygin Celen
Is Global Recession a cycle that we need so that we become one level higher in innovation. Is ´´It´´ a way that the very nature of the economy inspects us so that we shake ourselves up. Recessions may take 2 or more years. What we can do is tackling it through innovation. This article seeks the answer of ´´how´´ we can innovate in times of recession.
Thanks for your comments.
Is Global Recession a cycle that we need so that we become one level higher in innovation. Is ´´It´´ a way that the very nature of the economy inspects us so that we shake ourselves up. Recessions may take 2 or more years. What we can do is tackling it through innovation. This article seeks the answer of ´´how´´ we can innovate in times of recession.
Thanks for your comments.

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Categories:Types, Business/Law
Published by: Saygin Celen on Mar 11, 2009
Copyright:Attribution Non-commercial

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06/17/2010

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Global Recession Creating Innovators
A small sample of the sum may represent the whole. Hence, if an ordinary person looksat his own behaviors and his surrounding, he can easily see the
constrainingchanges
with the emergence of recession. People tend to cut down their spending andlower their luxury spending as entertainment, travel, a new plasma, etc. and buy cheaper  products of food, households, clothes and so forth.However, this doesn´t mean theyhave stopped buying, but rather means that they gain a ´´recessive´´ buying habit, whichmeans they are more attentive at shopping.Therefore, since a market with ´´
recessive habits
´´ and the habits of highly activemarket are significantly different, the companies may end up to lose their marketshare/value within a short timeif they don´t become systematic innovators, whichmeans to create a culture of innovation within.Let´s assume you are a
manager of a pasta company
. Therefore, I would think you arelucky because people may tend to consume pasta much more in times of downturnssince it is cheap and nutritional, but another way to use this opportunity most would beto offer different sauces, which are quite affordable and nutritional completing the tasteof the pasta with different varieties. Your pasta products will sell more since they aremore delicious and nutritional and you will gain an extraordinary advantage over theother brandsif you become the first to market the products.Your already builtdistribution network and parallel selling will give you the advantage of economies of scope and help you thrive your business.At times of recession, innovation througheconomies of scope may prove to increase the market share of the company.I recently read the article of 
Andrew Razeghi
titled as ¨Innovating Through Recession¨.The Associate Professor of the Kellogg School of Management, NorthwesternUniversity is an acclaimed economist and an expert on innovation. I´d like to mentionthe key elements of his article:
Don´t pull back on innovation and marketing.On the contrary, times of recession points a need for innovation. As the panic selling began on Wall Street
 
in October 1929, there was complete despair among people. However,
Henry R.Luce
introduced the Fortunemagazine for considerably high price of $1 inFebruary 1930. Fortune became so successful that by 1937, the magazinenetteda half million dollars on its circulation of 460,000.
Don´t decrease the price, but increase the value of the product.The way to solvethe problem isn´t decreasing the price. Decreasing the price will serve to lower the
perceived value
of the product, therefore, if even the recession is over, the product will be expected to have lower cost. Consider a wine brand that sells its product with a classy looking bottle for $30. If that price goes down to $10, thenthe customers would be feeling as deceived. However, as a marketing strategy,there still stand some exceptions as
IPhone
. The product was launched with a$600 price, then in about a month, the price was pulled down to $400. Eventhough many first purchasers protested the lower cost, it seemed to work prettyfine because of the initial perceived value, which made the customers feel like buying a higher value product for lower cost. Therefore, the total value(including the need in the market) may be considered independently for each product having the common sense in mind.
Much like getting in shape, people get creative when they have to.Consider theTV series, Lost. The crash survivors had nothing to do, but to innovate tosurvive. Even though this may sound a bit extreme, recessions are just one stepaway from depressions. The creation of an innovation starts with an idea, but therealization requires tireless and passionate work on the project.
Thomas Edison
,one of the biggest innovators of all time, who has a world record of 
1093patents
under his name, give maybe one of the most valuable lessons to be aninnovator by saying as: ´´I have never failed, but I´ve just found 10,000 ways

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