Background Note | HBS Case Collection | 2011 (Revised from original version)

Innovation: A Customer-Driven Approach

by Marco Iansiti, Thomas J. Kosnik and Ellen Stein

Abstract

Provides a selection of methodologies for the investigation of user needs, concept development, and product design.

Keywords: Customer Relationship Management; Product Design;

Format: Print

15 pages

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Citation:

Iansiti, Marco, Thomas J. Kosnik, and Ellen Stein. "Innovation: A Customer-Driven Approach." Harvard Business School Background Note 695-016, October 2011. (Revised from original November 1994 version.)

In 2011, Microsoft's Server & Tools Business (STB) was large, fast growing and highly profitable on the strength of traditional packaged product lines led by the Windows Server operating system. Even as the current packaged business was performing exceptionally well, Microsoft's leadership understood that cloud based solutions would become more prevalent in the future. As the newly appointed President of STB, Satya Nadella had to find a balance between managing the current packaged business and building the cloud offering.

Senior management at P&G has put a strong emphasis on using data to make "better, smarter, real-time business decisions." The Global Business Services (GBS) organization has developed tools, systems and processes to provide managers throughout P&G with direct access to up-to-date data and advanced analytics. In addition, GBS has embedded analysts within the business units to work alongside leaders and managers in driving real-time information-based decision making. Equipped with the tools provided by GBS, Alan Torres, vice-president of North America Fabric Care, must finalize the forecast for P&G's laundry detergent sales. Results for the two months since introducing concentrated powder laundry detergent in select retailers saw a surprising jump in sales of over 10%, but would the trend continue as the concentrated detergents were introduced across North America?

Supplement for case 613031. Update on progress of Microsoft's Server & Tools Business through July 2011. Satya Nadella and his team explore whether or not to support Linux on Windows Azure.

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