 Incremental change refers to a small

adjustment made toward a targeted result. In

the business world, the fact of making an
incremental change does not have a
significant impact on the existing structures
or alter current methods. Appropriate
examples of incremental change might
include continuous improvement as a quality
management process or implementation of
new computer system to increase efficiencies.
 “Contrary to incremental change, transformational
change is the process of altering the basic elements
of an organization as culture, including the norms,
values, and assumptions under which the
organization functions. When it comes to the
business environment, transformational change deals
with a company making a radical change in its
business model, often requiring changes in company
structure, culture and management. An example of
transformational change is the change in an
organizational structure and culture from the
traditional top & down, hierarchical structure to a
large amount of self & directing teams.
 In some case it is more appropriate to pursue
incremental change rather than
transformational change. Incremental change
is very efficient when an organization want to
be cautious in modifying its strategies, and
policies. using incremental change method
allows organizations to take less risks when
changing their existing structure. When there
is any risk in changing an
organizations structure ,transformational
change is not appropriate.
 When you hear the word change, it’s often the most ground
breaking ideas that spring to mind. But in actual fact, the
majority of change (around 70%) is incremental change.
 Incremental change involves making small scale improvements
to add or sustain value to existing products, services and
processes. This can be simple as adding a new feature to an
existing product or it can be more complex, for example
developing a line extension. One of its key elements is that it
harness existing technology and an existing business model so
it’s often easier to execute than breakthrough or radical change.
 Despite being the most common type, incremental change often
doesn’t get the recognition it deserves. We’re profiling 4 great
examples of incremental change from Gillette, Coca-Cola,
Cadbury and Sainsbury’s.
 1.GILLETTE
 You might not think of Gillette as one of the great
innovation leaders but in actual fact, the brand is a great
example of a company that has used incremental change
to stay ahead of the competition. Gillette razors started
life with a single blade but their product has evolved,
adding different features and more blades as the company
has sought to better meet customer needs.
 2. COCA-COLA
 Another great example comes from Coca-Cola. The
brand’s line extensions such as Cherry Coke, Coke with
Lime and more recently Coca-Cola Life have enabled a 130
year old brand to stay relevant, tap into emerging trends
and bring something new to its customers over the years.
 3.CADBURY
 Like Coca-Cola, Cadbury has innovated through
introducing line extensions. As well as developing new
flavours, the brand has also created new formats. Take
Wispa as an example: the popular chocolate bar is now
available as a hot chocolate and a snacking bag. By using
an incremental approach to change, Cadbury has been
able to open up additional sources of revenue.
 4. SAINSBURY’S
 Incremental change doesn’t just apply to products, it
affects services too. Sainsbury’s has evolved its delivery
service so that online shoppers can receive their goods
more quickly. Just the other week, the supermarket giant
announced that it was trialing same-day delivery – a move
that will help the brand to meet rising customer needs.
 Disruptive change is a non-localized future irreversible and
change that affects a portion of an industry. This can be caused
by changes in market trends causing a shift in the mode of
production to fit the customer demands. A good example of
disruptive change is in the introduction of mobile phones against
the regular analogue phones. At first, the mobile phone had poor
sound quality and was expensive.

 As the time passed, the mobile phones became cheaper, had

improved sound quality and as they were also portable, it
eventually displaced the analogue phones. From this example
and many other innovations, it is clear that disruptive changes
suffer from an initial lower performance from the mainstream
market. Despite this, it prospers in a given market niche due to
the new performances that it brings and as the performance
parameters are greatly improved, the traditional method is
eventually displaced.
 Disruption change usually affects many companies and the
effects that they leave behind depend on the preparedness
of the business in dealing with it and the way it is handled
generally. Many businesses are swallowed and never to be
seen again while others emerge successfully. There are
also those that will do their business as usual and struggle
through the change while others simply quit the industry
because they are unable to deal with the change.
 These consequences come as a result of the way people
respond to a disruptive change. For instance, others will
try and deny the disruption and do nothing about it while
those that are smart will act and try to minimize the
disruption and there will be those that will recognize the
disruption but fail to appreciate its magnitude. Whatever
the result, the fact is that the change is inevitable and only
the strong ones survive it.
 Nokia; We all know of Nokia to be a manufacturer
of mobile telephones. But Nokia was originally
founded in Finland in 1865 as a pulp mill (for
making paper). It expanded into electrical
generation, then into manufacturing rubber
products and cables. It wasn’t until the late
1960’s that Nokia became involved in
communication and other business equipment
and, eventually, into mobile telephones. In the
late 1980’s and 1990’s, Nokia divested itself of
its founding business units.
 Transformation: pulp, rubber, and cables to
electronic devices.
 These business and marketing change drivers are:
 1. Ever Changing Technology:

 This is the digital age and therefore, information age. The

industrial world of past was featured by mass production and
consumption, the stores filled with inventories, advertising
everywhere, and liberal discounting.
 The changed information age promises to leading to more
accurate levels of production, more targeted communications
and more relevant pricing. The business has termed electronic
where much of the business is carried on electronic networks
intranet, extranets and the internet.
 Technology which is fast changing is responsible for reducing
business costs, improving the quality, and increasing the
quantity where products are within each reach of consumers of
even lowest income.
 Globalisation:
 The local and national markets are turned
into global markets where the companies are
able market their products and services in
other countries of the world at best prices of
best quality and in required quantities. This
has been possible because of revolutionary
changes in the means of transportations,
shipping, and communication. This made
luxuries of the past as the comforts and
necessities in the present day situation.
 Deregularisation:
 To take advantage of international market, many
countries have deregualised the industries and
commerce with a view to create more and more
growth opportunities and higher degree of
competitive strengths.
 More and more foreign companies are engaged in
industrial and commercial activities of both goods
and services which were held at bay. This has led to
further opening and widening that brings in more
foreign capital and latest technology one hand and
generating gainful employment opportunities which
in turn support the increasing demand and supply
conditions.
 Privatisation is at its best now. Governments
of various countries have realized that it pays
to privatise the industrial and commercial
sectors of their economies. In case of India,
we have privatisation of services namely,
banking, airways, roadways, shipping,
insurance power, infrastructural activities and
even defence products. Public sector is
shrinking for better that has led to improved
efficiency and profitability.
 Customer Empowerment:
 Customers of these days are expecting higher
quality service and a degree of customerization
on an increasing scale. They demand more
convenience as they have problem of time
management as they have been the part of rat
race of earning decent living.
 As a result they perceive lesser real product
differences and portray less brand loyalty. They
are exposed to extensive product information
from internet and other sources that permit them
to shop more intelligently. They are showing
greater price sensitivity in their search for value.
 Customerisation:
 The companies are producing individually differentiated
products whether they are ordered in person, on phone or
on line. By going on line, the companies are enabling the
consumers to design their own specifications of a given
product to meet their individual requirements.
 As a result, the companies have the capacity to interact
with each customer personally so that there is a possibility
of personalizing messages, services, and the relationship,
in addition to individualized product designs.
 By using smart software and the latest manufacturing
equipment, a marketing house can increasingly increase
their sales. As orders will be cut- to-order, the companies
need not invest too much in unwanted inventories.
 Intense Competition:
 Today brand manufacturers are facing
heightened and tougher competition both
from domestic and foreign brands that has
resulted in rising promotion costs and
shrinking profit margins. Further, they are
slapped by powerful retailers who command
limited shelf-space and are putting out their
own store brands in competition with national
brands.
 The industry boundaries are getting blurred at an increasingly
incredible rate as companies are recognising that new
opportunities are at the intersection of two or more industries. In
the past the companies remained in only in core area or areas.
Now it is not so. For instance pharmaceutical companies of past
were purely chemical companies. Now they have been adding
closely allied lines for taking full advantage of synergy.
 They are adding bio-genetic research capacities in order to
formulate new drugs, new cosmetics (cosmoneuticals) and new
foods (nutriceuticals). It is not a surprise when Cosmetics
Company adds dermatology drugs to its port-folio.
 What is true of these pharmaceutical companies is true of other
lines. There is a convergence of comparing and consumer
electronics industries where companies like Dell, Hewlett-
Packard, and Gateway released a flow of entertainment devices
right from MP3 players to plasma TVs and camcorders.
 Retail Transformation:
 Small retailers are now facing a “do or die” situation
because there is growth of powerful giant retailers both
from home and abroad. India’s millions of small stores are
terrified of the onslaught from domestic and foreign
retailers.
 These store based retailers are facing growing competition
from catalog houses, direct mart firms, newspaper,
magazine, and T.V direct to consumer ads, home shopping
T.V., and e-commerce on the internet.
 In response, these entrepreneurial retailers are building
entertainment into stores with coffee bars, lectures,
demonstrations and performances. That is they are
marketing an ‘experience’ than a product assortment.
 The success of the established online companies of the world
namely, AOL, Amazon, Yahoo, eBay, E’TRACE and the like is quite
amazing. They are known for creating disintermediation in the
delivery of products and services, virtually struck, terror in the
hearts of many established manufacturers and retailers.
 In response to disintermediation, good many traditional
companies engaged in reinter mediation and became what is
called as “brick-and click”, adding online services to their
existing offers. Many brick-and click competitors became
stranger. Contenders than pure “click” firms since they had a
larger pool, of resources to work and work established brand
names.
 In such a situation that has undergone a thorough change, the
marketers have to be very agile and alert and take steps forward
only on conforming that it is safer and profitable to do so.
 The changing marketing environment
 All businesses operate within an environment of change.
One of the most important aspects of change is change in
the market place as customers become more demanding.
 Marketing is the process which involves identifying
existing customer needs and requirements and with
anticipating future changes. It is therefore a dynamic
discipline. The marketing environment for most, if not all,
products changes regularly. The challenge facing the
marketer is, therefore, to find out as much as possible
about this changing environment so that the business can
respond in a appropriate way. This remains true for any
company regardless of the industry, from a bottle of car
oil to a Fast Moving Consumer Good (FMCG) such as a bar
of chocolate or a packet of soap powder.
 Because Castrol products are designed to
complement high quality engines the company
works closely with Original Engine Manufacturers
(OEMs) such as BMW, VW/Audi, Ford, Jaguar and
Toyota to develop high quality lubricants that are
tailored to meeting the requirements of modern
engines.
 Castrol's marketing research therefore involves
finding out detailed information from both the
OEM's and motor vehicle users. The desired
result of the research is to produce and supply
the best quality high technology oils to meet the
needs of modern engines.
 The marketing environment in which Castrol
operates is constantly changing because:
 New engines are continually being developed
by the engine manufacturers with new
specifications and requirements.
 Government regulations regularly change. For
example in recent years UK and European
regulations increasingly require engines to be
cleaner and to help to create a cleaner
environment.
 The world is becoming wealthier, and
increasingly modern consumers require more
sophisticated motoring products. More and
more consumers are buying more luxurious
and sophisticated vehicles. To complement
this purchase they require the best quality
oils.
 Castrol's response to these changes is to
provide oils which are technically superior to
anything else on the market, and which are
market focused.
 Volatility is a statistical measure of
the dispersion of returns for a given security or
market index. In most cases, the higher the
volatility, the riskier the security.
 Volatility can either be measured by using
the standard deviation or variance between
returns from that same security or market index.
 In the securities markets, volatility is often
associated with big swings in either direction. For
example, when the stock market rises and falls
more than one percent over a sustained period of
time, it is called a "volatile" market.
 Market volatility can be seen through
the VIX or Volatility Index. The VIX was
created by the Chicago Board Options
Exchange as a measure to gauge the 30-day
expected volatility of the U.S. stock market
derived from real-time quote prices of S&P
500 call and put options. It is effectively a
gauge of future bets investors and traders are
making on the direction of the markets or
individual securities. A high reading on the
VIX implies a risky market.
 A variable in option pricing formulas showing
the extent to which the return of
the underlying asset will fluctuate between
now and the option's expiration. Volatility, as
expressed as a percentage coefficient within
option-pricing formulas, arises from daily
trading activities. How volatility is measured
will affect the value of the coefficient used.
 Volatility refers to the amount of uncertainty or
risk related to the size of changes in a security's
value.
 A higher volatility means that a security's value
can potentially be spread out over a larger range
of values. This means that the price of the
security can change dramatically over a short
time period in either direction. A lower volatility
means that a security's value does not fluctuate
dramatically, and tends to be more steady.
 Volatility is often calculated using variance and
standard deviation. The standard deviation is the
square root of the variance.
 Suppose that an investor is building a retirement portfolio.
Since she is retiring within the next few years, she's
seeking stocks with low volatility and steady returns.
 She considers two companies:
 Microsoft Corporation (MSFT) has a beta coefficient of
1.03, which makes it roughly as volatile as the S&P 500
index.
 Shopify Inc. (SHOP) has a beta coefficient of 1.88, making
it significantly more volatile than the S&P 500 index.
(The S&P 500,[6] just the S&P,[7][8]is an American stock
market index based on the market capitalizations of 500
large companies having common stock listed on
the NYSE, NASDAQ, or the Cboe BZX Exchange.)
 The investor would likely choose Microsoft Corporation for
their portfolio since it has less volatility and more
predictable short-term value.
 Evolution-Transformational change implemented
gradually through inter-related initiatives, likely
to be proactive change undertaken in anticipation
of the need for future change.
 Adaptation : Change undertaken to realign the
way in which the organization operates,
implemented in a series of steps.
 Revolution: Transformational change that occurs
via simultaneous initiatives on many fronts.
 Reconstruction : Change undertaken to realign
the way in which the organization operates with
many initiatives implemented simultaneously.
 EXTENT OF CHANGE

TRANSFORMATION REALIGNMENT

INCREMENTAL
EVOLUTION ADAPTATION

SPEED OF
CHANGE

REVOLUTION
RECONSTRUCTION

BING BANG