Professional Documents
Culture Documents
2
PART A) ....................................................................................................................................2
HISTORY OF KINETIX............................................................................................................2
VISION&MISSION....................................................................................................................3
QUALITY POLICY...................................................................................................................3
Brand Value & Components of Brand Identity..........................................................................3
WHAT IS INNOVATION?........................................................................................................4
Goals of Innovation.....................................................................................................................5
CHANGES IN INNOVATION..................................................................................................6
Additional to past vs. present innovation process.......................................................................7
PART B).....................................................................................................................................9
1)R&D INVESTIGATIONS.......................................................................................................9
R&D Functions...........................................................................................................................9
Product R&D.............................................................................................................................10
Service R&D:............................................................................................................................10
Scientific Freedom....................................................................................................................11
2) OCTOPUS STRATEGY INVESTIGATION......................................................................13
Strategic Alliances....................................................................................................................13
Stages of Alliance Formation....................................................................................................13
Reasons for entering a strategic alliance...................................................................................14
Strategic alliances of the firm...................................................................................................15
How They benefit from the strategic alliances.........................................................................15
Risks of strategic alliances network..........................................................................................17
Selection Risk:..........................................................................................................................17
Monitoring Risk:.......................................................................................................................17
Failure Identification Risk: ......................................................................................................18
Strategic objectives related risks...............................................................................................18
Operations objectives related risks:..........................................................................................19
Reporting objectives related risks:............................................................................................20
Compliance objectives related risks..........................................................................................20
3)OTHER ISSUES ...................................................................................................................20
REFERENCES..........................................................................................................................24
1
KINETIX
RESEARCH METHODS
In the preparation period of our project, we have benefited from the official website of
KINETIX, face to face interview and some specific articles regarding R&D and innovation
issues.
KINETIX sport shoes which includes valuable datas for our research. After working on these
datas, we have organized and analyzed the information and we reached the point to be able to
topics, individually, regarding the innovations in KINETIX, we achieved our goal as a team.
During the preperation period of the project, the most important knowledge that contributed to
our research has been the team discussions and synergy that we have created.
PART A)
HISTORY OF KINETIX
Kinetix was established in 1991 under the name of Ziylan Pazarlama A.S.
In 1994, they changed their names as Sporer A.S for achieving to continue their marketing in
domestic market. Sporer A.S is producing Kinetix and Torex brand name sport shoes. And
also they produce textile products as Kinetix. Kinetix is selling shoes,textile and accessorize
for women, men, children. Now Kinetix is a well known brand and third most chosen sports
shoes. Since 1997 Kinetix has been marketing and promoting boats. In 2005 they started to
prepare textile collections. Kinetix has 850 selling point in country-wide. The head quarter in
BILAL USTA
2
VISION&MISSION
VISION
With a view to improve our firm’s effectiveness and efficiency in national market, being
MISSION
To be one of the best young/sports clothing firm of Turkey’s and its neighbours’.
QUALITY POLICY
The firm is aim to grow in sports wear and to enter the overseas markets. The firm has the
ISO 9001 quality ceritficate. Because of this the firm is decisive to continue to develop its
organisation and try to be the market leader in domestic and overseas markets.
Closeness Humanistic
Accessibility Appropriate
CONCEPTS OF KINETIX
BILAL USTA
3
1
WHAT IS INNOVATION?2
The term innovation may refer to both radical and incremental changes in thinking, in things,
in processes or in services (Mckeown, 2008) Invention that gets out in to the world is
not an insignificant change, e.g., in the arts, economics, business and government policy. In
economics the change must increase value, customer value, or producer value. The goal of
H
I
1
2
Benefited from Kinetix orientation report
Benefited from wikipedia
FAS
ATHLETIC
BILAL USTA
ATH
4
Goals of Innovation3
the employ of a number of tools. At the outset it is important that the culture of the
organization empowers employees and encourages them to submit their ideas. Most
importantly management should adopt the appropriate innovation strategy to lead the
innovation process and manage the innovation portfolio. The following summarizes the
various objectives that management should aim for under the innovation management stage:
Effect a shift in the way the organization sees itself where innovation is recognized as
Deciding upon the innovation strategy that best fits the organization’s situation, and
Define a criteria for the selection and prioritization of projects within the portfolio to
Effect the necessary structural changes to arrange skills throughout the organization in
competence centers, to enable the formation of the right team for the purposes of the
innovation project.
Arrange current and potential future alliances in a portfolio that can be tapped when
needed, and define when and how such alliances are to be made (governing
conditions).
to innovate and the implementation of their own ideas for improving job performance.
3
Benefited from http://www.ipmall.info
BILAL USTA 5
Develop and implement methods that enable tapping into the organization’s
intellectual capital.
CHANGES IN INNOVATION4
And in this part you will see the changes in technology and this situation’s effects on
changes in innovation. There are a lot of things have changed in technology for 20 years.
So these changes have changed the innovation process. What has changed???5
In the past: In the past innovation assume that companies’ subject matter experts (within
companies’ company) invent and design innovative new products to meet needs customers
may not even realized they had. Then companies’ marketing and advertising departments
make prospective customers aware of those needs, wrap a brand experience around
companies’ innovative products, package and price those offerings… and bring them to
market.
often obtained through the mass media, while uncertainty reduction that leads to acceptance
mostly results from face-to-face communication. So this change effected innovation. In these
years to flip the innovation process around and assume that customers have outcomes that
they want to achieve. Because of they have deep knowledge about their own circumstances
and contexts, and they are not happy about the way they have to do things today. They will
innovate - with or without your help - to create better ways to do things or to design products
BILAL USTA 6
There’s obviously a big difference in past and present innovation processes. But the impact to
organizations who don’t understand that the game has changed is much larger. Just as the
Consumer has begun to take control of media, they will also demand a starring role in co-
This is an evolution that makes perfect sense. In past innovations, we didn’t really know what
companies’ customers want - we may think we do, but at best we’re shooting in the dark, and
hoping we hit something. From a marketing and sales standpoint, companies’ new products
are “pushed” through the sales channel to the customer, who often has to be incentivized with
discounts, rebates and other creative “carrots” to persuade them to buy. So these programs cut
into gross margins and profits, and usually aren’t very effective.
In contrast, if you really understand not only your customers’ needs, but the critical outcomes
they want to achieve, you can then work shoulder-to-shoulder with your key customers to
“co-create” products that meet those needs. There’s no need to “push” your offerings,
because customers will gladly pay a premium for products and services that make their lives
easier and more profitable. Higher margins and profits for the company.
The companies were working only with smart people within the companies in the past. But
they now need to work with smart people who is from inside and outside the companies. They
might discover from researches and developments (R&D) to make profit, and also were
developing it and ship it theirselves. If they discover it theirselves, they would get it to market
first. But nowadays external R&D can create significant value; internal R&D is needed to
claim some portion of that value. They don't have to originate the research to profit from it.
6
Benefited from wikipedia
BILAL USTA
7
The company that gets an innovation to market first would win. At present building a
better business model is better than getting to market first. In previous years if a company
created the most and the best ideas in the industry, they could win. İn recent years they don't
have to originate the research to profit from it.In the past they were controlling their
innovation process, so that their competitors didin’t profit from others’ ideas. But now the
companies should profit from others' use of their innovation process, and they should buy
BILAL USTA
8
PART B)
1)R&D INVESTIGATIONS
R&D Functions7
working primarily on developing and improving existing technology and products.In a few
organization does the R&D function operate in accordance with its real objective:
For some reason R&D has become distanced from delivering value.The majority of
R&D organizations do not talk to customers - they let marketing do that.They do not listen to
market needs.They rarely even listen to the rest of the company.The prime culprit is senior
management in R&D.They tend to be older,more set in their ways, and less willing to accept
that the old model of R&D,one they had to learn through the trenches over the last twenty
does the remit of corporate R&D.In addition to generating knowledge within the firm,R&D is
firm.Research and develop is becoming 'Aquire and Develop' and 'Connect and Develop'.
When we look thoroughly to the concept of R&D,we will be able to have some ideas about
We made an interview with the firm Kinetix, a domestic sneakers and shoe
manufacturing firm,and try to learn one or two things about R&D functioning and other
7
Benefited from http://innovationbbl.blogspot.com/2006_11_01_archive.html
9
issues.So,as we go into the deep of R&D functioning,we can understand that they are putting
Product R&D8
Since the world has come to a place,where technological developments are impossible
not to be aware of and really hard to follow,Kinetix is also doing his share on this
matter.According to their saying,the shoe industry is a complex one and many many people
various kinds of working process on this huge business sector,so this is a big deal.That's
why,Kinetix should always improve their way of working and developing new kinds of shoes
and sneakers.To be able to do so,they're applying different methods like new computer
programs,which optimizes the production process and saves time to them.They observe and
interpret the trend through the whole world and try to gain information about the best suitable
and effective way of producing shoes for people.But they say,it's not important only to be
Service R&D:
As you can guess,production is not the only thing that any kind of business is depend
on.It's only the beginning to create value and quality for costumers.After an effective and
successful manufacturing process comes a reliable and trustable delivery and service
words,it's an crucial way of gaining costumers attention to the brand,creating a desirable and
need satisfying service process.To reach a success on that matter,they try to change their old
habits of company structure the manager says.Because Kinetix is not a corporate firm,but a
family firm,there are stable habits on various matters,which are really hard to
8
Benefited from http://www.eirma.org/documents/casimir/ward-essay.pdf
EMIR COLAK 10
change.But,Kinetix is on its way of breaking them.And they already have gone to some point
the manager says.To be a little more spesific,they try to improve their information-function
function groundwork,they use some high technological systems to provide the most efficient
and effective service for costumers and they also hire educated staff to improve peoples way
before,where the workers are lined from the most important person to the least important one
and the problem on that is losing time and energy on the way of creating good service for
costumers.So they also made some crucial changes on the form of the company's
organizational structure.
Scientific Freedom9
Scientific freedom,also known as freedom of scientific research and development
access to information and computing for those with vision impairments or learning
disabilities.
If we make a start from this explanation most of us can realize that scientific freedom
is very much related with improving products quality and to learn and develop the ways of
doing it.To be more understandable,it means to search every possible way for doing and
creating what's better for the costumer.That's the general idea about it.But,there are some
other issues related with scientific freedom also.For example:Time and Money.The scientific
researches and investigations on products and their potentials can be very time and money
consuming.It's an endless see.If you have the money,the power and the time to do these kinds
of researches in your spesific business sector,then you can do anything with the help of
science and techlonolgy.You can do and be the best for your costumers.So,as you can
imagine,'till this point,we were talking about the powerful and big companies in whole
9
Benefited from http://www.freedomscientific.com/about/about.asp
EMIR COLAK 11
world.In shoe business it's not very different either.You know the big ones.Nike,Adidas,Puma
etc...To take this aside,if we look closer the domestic ones like Kinetix they don't the same
opportunities and power like the big companies.So,if Kinetix want to have a scientific
everything.At least,it's what the manager of Kinetix tried to say to us.So,because they don't
have the same power and they are facing limitations on scientific freedom,they don't have any
freedom,they do researches and trying to accomplish some new ideas and innovations on their
business only the level their economical power lets them to do it.
managing innovation. Marketing's most important contribution is ‘not getting it wrong’ rather
than ‘getting it right,’ in setting minimum criteria in project evaluations rather than definite
targets, and in refocusing the attention of R&D staff through the very process of providing
input.10
installation, servicing, documentation, verification and validation. This introduced the rules:
"fit for purpose" and "do it right the first time". It includes the regulation of the quality of raw
One of the most widely used paradigms for QA management is the PDCA (Plan-Do-
Check-Act) approach.11
10
Benefited from http://www.sciencedirect.com
11
Benefited from http://wikipedia.org
SANIYE TEKBASLI
12
Kinetix doesn’t have their own production factory. And also they don’t believe that the
technology for producing sport shoes is enough in turkey. Because of this reason, they are
making their production in China and some other middle - east countries. The companies
name were confidential. But the product manager told us they have some strategic alliances in
Strategic Alliances12
pursue a set of agreed upon goals or to meet a critical business need while remaining
independent organizations.
joining the alliance and addressing resource capability gaps that may exist for a partner.
EMIR COLAK
12
Benefited from http://wikipedia.org
13
Contract Negotiation: Contract negotiations involves determining whether all parties
instance when its objectives have been met or cannot be met or when a partner adjusts
There can be various kinds of reasons of companies to feel needy for a strategic
property etc...So they will have one or two clues about their way of thinking and doing things
on that particular business sector.If a company comes short on one matter(like using an high-
cost material on its products),the other one is there to provide any source of help to them.On
our project of Kinetix,it's the exact situation.The manager of Kinetix gives an example about
how they are not competent and strong enough to use leather on producing sneakers for their
costumers.And therefore,is the chinese alliance of them is helping them to get through that
problem by manufacturing sneakers using leather on its raw material.As you can see,they are
EMIR and
trading ideas and opportunities with eachother COLAK
it's a better way to seize todays business
14
market and use the existing potential in their veins.Since creating an alliance gives them a
cooperative and colloborative structure,they are much stronger than the seperate individual
companies,which compete with them.Synergy always beats the individual effort in the
business world.And one another thing:with the technology transfer,like having access to
eachothers knowledge and expertise,they are able to cope with the economical risks and high
expenses.
alliance issue.So,therefore,they have some strategic alliances all around the world.The
manager we interviewed didn't go too deep into details of names of alliances.But,the general
idea and strategy behind these strategic alliance process is very clear.They try to minimize
their external threads in their market and also want to gain the best result on profit and
costumer loyality with it.So,they lack of competing with big firms in some spesific areas like
opportunities and power to get the best possible outcome for their organizations.The
production process,we ask our alliance's help and trade some ideas with eachother.It's the best
From our interview,we are able to understand that Kinetix has a chinese strategic
alliance in production process and they help eachother to overcome the obstacles in both
business markets.
15
1)Allowing each partner to concentrate on activities that best match their capabilities:
Every firm has a potential of doing their business and this potential is the tool to shape
its way of thinking business and manufacturing products.So,every company should act and do
managers words,they do their best to get their costumers attention and loyality and market
share,surely by knowing their physical and economical potential and their capabilities.It gives
them the chance to create the most possible value for their costumer,by letting the parts,they
can't do because of their limitations(for some reason),to the alliance firm.This will save them
both time and money in their own market and business sector.
2)Learning from partners & developing competences that may be more widely exploited
elsewhere:
is the key word for all business firms,no matter what they produce or service.To learn
something gives a company an opportunity to improve and develop itself by all means.Not
only a product feature is here we are talking about.This is much more than the production
process of a product.This is the key issue that every company must pay attention
to.Production development is one thing,but developing the way of thinking by general means
is another.Learning creates a chance to develop and developing creates a chance to have some
difference than others.Isn't that the general idea behind the concept of a brand?Creating
difference on costumers eyes,Kinetix or any other brand should explore the unlearned things
on their area and develop their talents,point of view,competences.Only that way,they can
compete with the global challange around the world.It's another reason their strategic alliance
16
3)Adequency and suitability of the resources & competencies of an organization for it to
survive:
Not a single resource is unlimited on this planet.Everything has an end point where it
should be very careful in spending the companies limited resources.Or the company will face
a inadequency of the resources.The stategic alliance of the firm is helping the company to
ease the pressure on its back,by giving more sources and competences to them.But these
resources and competencies should also be suitable with the alliance's organizational goals
and structure.Otherwise,its an empty gun for the strategic alliance and can't provide any help
The benefits associated with strategic alliances are great,however strategic alliances
are risky endeavors that require careful and methodological risk management through their
life cycle(from partner selection to the partnership dissolution).In general terms,the firms and
Selection Risk:
Monitoring Risk:
It is the risk that result from the lack of appropriate financial or non-financial measures
EMIR COLAK
17
Failure Identification Risk:
It means the risk that the firm will have nonexistent,irrelevant or unreliable processes
companies face spesific alliance partnership risks also,resulting from the setting goals and
objectives of the organization and developing strategies for these goals.So if we try to classify
1)Strategic
2)Operations
3)Reporting
4)Compliance
By distinguishing these objectives from one another,a firm can focus directly on the spesific
risks that may prevent the company from achieving its objectives in each of these areas.
a)Innovation risk:It's the risk that strategic partners will not maintain adequate levels of
b)Intellectual property risk:It's the risk that your strategic partner will make an inappropraite
use of proprietary information in a manner that could negatively affect the firm.
c)Product/service failure risk:It's the risk that fault or non-performing products or services
from your strategic partners expose your company to sanctions from endcostumers.
d)Misalignment of incentive risk:It's the risk that strategic partners have incentives to take
e)Partnering lock-in risk:It's the risk that the choice of a spesific strategic partner locks the
EMIR COLAK 18
f)Outside scope risk:It's the risk that alliance will create products or services outside the scope
of original agreement.
a)Input supply risk:It's the risk that the strategic partner is unable or unwilling to supply key
commodities,raw materials,or component parts in a timely manner to meet the firm s regular
demand patterns.
b)Surge capacity risk:It's the risk that the strategic partner is unable or unwilling to supply key
high,unexpected demand.
c)Quality performance risk:It's the risk that the strategic partner is unable or unwilling to
supply key commodities,raw materials or component parts according to the quality and
d)Cost/price renegotiation risk:It's the risk that the strategic partner will take advantage of its
position at a later date and seek unexpected increases in the price of key commodities,raw
materials or components.
e)Coordination risk:It's the risk that the firm and its strategic partner will fundamentally
misunderstand one another's needs due to complexity or uncertainty associated with the task
f)Financial viability risk:It's the risk that the strategic partner will experience financial distress
g)Contribution valuation risk:It's the risk that the firm's non-monetary contribution to the
h)Financial commitment risk:It's the risk that entering into a strategic partnership may expose
EMIR COLAK
19
Reporting objectives related risks:
a)Verification and evaluation risk:It's the risk that the firm will be unable to verify,monitor or
b)Misalignment of incentive risk:It's the risk that strategic partners have incentives to take
Compliance and regulatory risk:It's the risk that the strategic partner's failure to comply with
customer requirements,firm policies or government laws and regulations may expose the firm
companies from Japan, the United States and Europe are joining forces to create multiple
strategic alliances. The end result of this strategy is that two divisions of the multidivision
companies may have formed an alliance, while other divisions of the same organizations may
be in fierce competition with one another. Develops a model of the working of strategic
alliances based on the existing empirical evidence. Suggests some contributions that
government, industry and education should make for the success of alliances.13
3)OTHER ISSUES
• Limitations Of Innovation
13
Benefited from www.emeraldinsight.com
and models, and may therefore include process, marketing and business model innovation.
Product innovation involves the introduction of a new good or service that is new or
Service innovation typically refers to service product innovation which might involve,
advance, being more interactive and information-intensive. Service innovation may also
involve novelty in the way in which services are produced, or in delivery of other aspects of
the service - including creative content in the case of entertainment and cultural services.
also includes these four types of innovations. They take up all these as a whole. Together with
effective and efficient service. They want to turn innovations into financial gains and money.
Because of this, Kinetix takes notice of organizational, process, product and service
innovations. Kinetix’s hierarcy was vertical, but they thougth that this structure extends the
decision making process. That’s why they vary their organization structure and now their
hierarcy is horizontal.14
SANIYE TEKBASLI
14
Benefited from http://www.wikipedia.org
21
New product development (NPD) is the term used to describe the complete process of
bringing a new product or service to market. There are two parallel paths involved in the NPD
process : one involves the idea generation, product design, and detail engineering ; the other
involves market research and marketing analysis. Companies typically see new product
development as the first stage in generating and commercializing new products within the
overall strategic process of product life cycle management used to maintain or grow their
market share.
deevlopments and customer demands. They aimed to analyze and adopt both of them to new
product. And also in this process, Kinetix make a point of the analyzes of competitors. They
are aware of that the well known brands; such as Nike, Adidas, Puma; have the control of the
market. These brands set fashion, new trends and styles. What Kinetix done is analyzing its
competitors’ new products and try to produce like them with lower price. With this strategy
15
Kinetix is on the way of being the best follower in Turkey.
Kinetix give importance to customer demand in diverse processes such as; product
quality, price, service, advertisements. They direct their products, services, product
development and technoloji take into consideration these demands. Customers expect better
service, better products and enhanced brand image from Kinetix. Kinetix focal point in
production is order. Integrating customer demands into innovation process is achieved with
order meetings which convenes twice a month. In the order meetings Kinetix presents their
collections to customers and send for orders. These meetings convene in Kinetix’s showroom
15
Benefited from http://www.wikipedia.org
SANIYE TEKBASLI
22
PART C)
With the 850 selling point in country-wide Kinetix is a very well-known brand. is
selling shoes,textile and accessorize for women, men, children. But they have a limited budget
for R&D. Because of this they are a little bit lack of innovate. But with their limited budget
they are trying to do their best. They are not the market leader or trend setter. But they are
very good at analyzing world-wide brands’ innovations and this feature provides them to
produce with less cost and sell the products with lower price. So with this strategy they are
becoming a good follower. Kinetix give importance to customer demand in diverse processes
such as; product quality, price, service, advertisements. They direct their products, services,
product development and technoloji take into consideration these demands. Customers expect
better service, better products and enhanced brand image from Kinetix. Kinetix’s point of
view to innovation is not only consist of product development, it also includes organizational,
Kinetix’s hierarchy was vertical, but they thought that this structure extends the
decision making process. That’s why they vary their organization structure and now their
hierarchy is horizontal.
The companies which are not considered as corporates but considered as family firms
have sone memorized and stable habits that are hard to break and change.But in todays
business world most of these habits are obstacles on a companys way to achive its goals and
outcomes.So because change is the only the thing not changes even the old and family
companies like Kinetix should adapt to these continuous changes and developments in the
industry.To be able to do that company should create solutions in more than one way and
23
must be open to new ideas and have the desire to make innovations.Only that way they can
reach their desirable goals,customer attention and loyality and expected share in the market
REFERENCES
24
Kinetix orientation report (in the attachment in cd)
http://www.wikipedia.org
http://www.ezinearticles.com
http://www.ipmall.info
http://www.wordpress.com
http://www.innovationbbl.blogspot.com
http://www.eirma.org
http://www.freedomscientific.com
http://www.sciencedirect.com/science
http://en.wikipedia.org/wiki/Innovation#Innovation_in_organizations
http://en.wikipedia.org/wiki/Quality_assurance
25