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KANOPY STREAMING SERVICES

MANAGEMENT OF INNOVATION: DIGITAL REPORT

Name: Nazir Bandali Bachu 7E1A8475/15411707 Lecturer: Mr Adriel Sim Day/Time: Wednesday/8am

Total file word count: 3450 Less direct quotes: 240 Less cover page and table of content: 105 Less reference list: 428 Net word count: 2677


Contents 1.0 Executive Summary: ......................................................................................................................... 3 2.0 Kanopy Background: ........................................................................................................................ 3 3.0 Establishing an environment for innovation: .................................................................................... 4 3.1 IP Strategies: ................................................................................................................................. 4 3.1.1 Trademark: ............................................................................................................................. 4 3.1.2 Is she on the right track? ........................................................................................................ 4 3.2 Managing Organisational Knowledge: ......................................................................................... 5 3.2.1 Core Competencies: ............................................................................................................... 5 3.2.2 Knowledge Management: ...................................................................................................... 5 3.2.3 Absorbing Capacity: .............................................................................................................. 6 3.3 Collaborative Strategies: ............................................................................................................... 6 3.3.1 Types of Collaborative Strategies: ......................................................................................... 6 3.3.2 Scope of More Collaborative Strategies: ............................................................................... 7 4.0 Implementing innovation: ................................................................................................................. 8 4.1 Managing Innovation and Operations Management: .................................................................... 8 4.1.1 Pearson's uncertainty map: ..................................................................................................... 8 4.1.2 Innovation Process: ................................................................................................................ 9 4.2 New Product Development: .......................................................................................................... 9 4.2.1 NPD as a strategy for growth: .............................................................................................. 10 4.2.2 Network model of NPD: ...................................................................................................... 11 4.2.2.1 Generating Business Opportunities:.................................................................................. 11 4.2.2.2 Screening of business opportunities:................................................................................. 12 5.0 Questions from the CEO: ................................................................................................................ 13 6.0 Conclusion and Recommendations: ................................................................................................ 14 7.0 References:...................................................................................................................................... 15 8.0 Appendix:........................................................................................................................................ 17


1.0 Executive Summary: Kanopy has won numerous awards like WA Innovator of the Year Award- Mitsubishi Growth Category and made it as a finalist of the MassChallenge Accelerator Program. This astonishing performance is down to the innovativeness of Kanopy's streaming services. This report examines Kanopy's innovativeness in implementing and formulating strategies. All in a bid to meet customer requirements who in Kanopy's case are students. This report is divided into four parts; establishing and environment for innovation, implementing innovation, questions from CEO, Olivia Humphrey and recommendations for Kanopy.

2.0 Kanopy Background: Kanopy Streaming Services is a pioneer when it comes to educational technology partnering up with global film makes like Universal, Epic Motion and Mad Men films to provide higher educational institutions in Australian, The Asia Pacific region and North America with a one stop shop for online educational videos. There is a growing demand for educational institutional to extend their video resources digitally to reach more off campus students. Before Kanopy, University librarians had to try and procure copyrights to any video, face currency complications, licence fees and also had to acquire the technology required and involved in streaming videos. Kanopy has been nicknamed the Netflix of the education sector by the founder and managing director, Olivia Humphrey. In 2002, Olivia Humphrey noticed the opportunity to distribute non cinematic film to the academic sector particularly to higher education institution. She was at the time working for Road show entertainment and on her off time she would travel the world and develop a business plan for Kanopy. During this time she realised that the largest number of online users was students in the tertiary sector, however this form of media was rarely used as a teaching medium. Kanopy currently has over 15,000 catalogues of videos and employees only 12 people who cover sales, marketing and administration. However before Kanopy could stream online they had to create a fully customized platform and collection of applications that aided the teaching and learning experience and also created a tool to measure usage. Before Kanopy could start streaming online they had to creating and launching a platform which was costly and initially Kanopy had to distribute DVD's to libraries as they tried to raise the required funds. Click here for a graphical representation of Kanopy and its development over time.


3.0 Establishing an environment for innovation: 3.1 IP Strategies:

In the world of business literature intellectual property means the property of a person's intellect, asset of the innovator and company. It can include ideas, writings and other creations. There are four categories of IP ,these are Copyright, Trademark, Patent and Designs (Troot 2008, 147). The importance of protecting intellectual property has been ever increasing coupled with the cost of developing a product and the risk of exploitation from others (Bently 2012). 3.1.1 Trademark: Trademarks comprise of designs, signs, sounds or any identifiable but still unique feature that a product has over its competitors in a given market (Susan 2011). According to Trott (2008, 160), trademarks is a way that enables a customer to differentiate products and recent development have lead to people associating trademarks with quality assurance and originality. Kanopy should consider trade marking their logo as it is fast becoming popular. 3.1.2 Is she on the right track? Yes she is, Kanopy is growing well and works with no transparency to competitors about its codes and platform. The only organisation with knowledge is Media Education Program as part of the agreement that enabled Kanopy to receive content to stream in the US but it is advised to Olivia to adopt a trade secret policy just to ward off competitors and copy cats. Trade secrets have numerous advantages in the modern information economy but one of the most significant is the sheer breath of matters it covers. Trade secrets include computer codes, details of processes and blueprints. Kanopy uses codes to protect its platform it would be advised that the trade secret the process so as to protect the codes and platform (Pooley and Bratic 1999).


3.2 Managing Organisational Knowledge:

3.2.1 Core Competencies:

Low

Imitability

Negligible

Long term

profit

profit

No

Short term

Profits

Profits

High Non-Core

Core

Extent of Coreness

The figure above shows how core competency, profits and imitability are related. Kanopy's core competency is explained by this figure. The imitability for Kanopy is low due to the fact that the coding they use is not accessible to the public or its competitors and is frequently changed. Furthermore, Kanopy is expected to experience long term profitability especially if they can successful start-up in the US. 3.2.2 Knowledge Management: In order to move forward and become successful organisations have to manage knowledge that is available to them (Stevens, Millage, and Clark 2010). Knowledge is a vital asset for any organisation and currently organisations are struggling to gain strategic advantage by capitalizing upon their know-how (Helm 2010). On the surface, knowledge management is difficult to define but can be subdivided into two categories; Tacit knowledge and Explicit knowledge. Tacit knowledge is defined as the type of knowledge that is hard to communicate and spread this knowledge because of the fact that it is cannot be codified or written down as a process but can be transferred through personal experience and training (Calo 2008). On the other hand explicit knowledge is defined as the opposite of tacit knowledge, it can be codified and


written down as processes making it tangible and easier to communicate and spread thought the organisation (Singh 2008). Kanopy operates under a flat hierarchy system of management which makes communication between employees easier which in turn increasing the firm's ability to transfer knowledge. Furthermore, Olivia Humphrey has used outsourcing as a means to curb the lack of knowledge that wasn't available to them. An example are the Marc records which have been outsourced to other companies. 3.2.3 Absorbing Capacity: Absorbing capacity was first defined by Cohen and Leviathan (1990, 569) as "a firm's ability to recognise the value of new information, assimilate it and apply it to commercial ends". The higher a firm's capacity of absorption is the more innovative they can be (Volberda 2010, 931). The ability to exploit external knowledge is essential part of a firm's innovative capabilities. It is also worth mentioning that the absorption capacity of a firm is dependent on individual members (Troot 2008). Olivia Humphrey has over 10 years working experience in this industry and she also has a background in psychology that all lead to a high absorption capacity for Kanopy.

3.3 Collaborative Strategies: Collaboration is defined as the action of working with someone to produce or create something(Min et al. 2005). The rationale behind collaboration is that one company cannot successfully compete on its own, customers are becoming more demanding and competition between firms is also increasing (Kotler 1997). Kanopy has recognised this and has managed to collaborate with film makers, librarians and higher education institution. 3.3.1 Types of Collaborative Strategies: Kanopy is currently collaborating with film makers, librarians and higher education institution in order to gain a competitive edge in the industry. Some of the types of strategies that they have used are licensing , outsourcing and supplier relations. 3.3.1.1 Licensing: Licensing entails the arrangement that business have between each other that gives them the right to use property or services owned by another company. Some of the issues that licensing can solve is the cost of building infrastructure required, distribution of products and


marketing. Kanopy has a video catalogue of over 15000 videos and has managed to acquire the licences for these videos from film makers like Epic Motion, Universal and even individuals like Margaret McAllister. Kanopy main source of revenue also comes from licensing. Kanopy also creates websites for each university in order to provide easy access to all licensed contents that have been purchased by that university (Fulwood 2013). 3.3.1.2 Outsourcing: Outsourcing is defined as the process of contracting a third party to provide services. Initially, organisations viewed outsourcing as a means to cut costs but recently it has been discovered that the main driving force behind outsourcing is reducing infrastructure and staffing issues (Neshevich 1998). According to Olivia Humphrey, she did not have any knowledge of how to create Marc records for librarians and she outsourced the job to professional Marc recorders also she pointed out the fact that they at Kanopy had no knowledge of IT and the coding involved so they employed people who knew on a part time basis. 3.3.1.3 Supplier relations: Supplier relations are becoming increasingly important in the world of business, firms are entering into agreements with suppliers which are usually founded on cost benefits to the supplier (Troot 2008). This mutually favourable association delivers greater innovation levels and competitive advantage that could not have been achieved (Min et al. 2005). Kanopy will begin operations in the US this June, however they already have a wide customer base. They managed to get this by approaching Media Education Foundation who they already work with in the Asia Pacific region, they offered them the chance to use their platform and in return Kanopy would receive licenses to stream media content from Media Education Foundation in the US. This relationship is mutually beneficial as when sales are made Media Education Foundation takes the lion share but Kanopy is still profiting as well. 3.3.2 Scope of More Collaborative Strategies: Joint ventures are described as the mutual aid of organisations to share the costs of risk without involving equity (Vaidya 2009, 8-9). Benefits that are associated with such alliances are like the increased ability to leverage investments and also reduce risks associated with long term investment (Inkpen et at 1999, 35). It is also important to point out that when selecting who to enter a joint venture agreement to consider factors like resource fit, impact of strategic direction, strategic fit, impact on external


and internal environment are important in order for the agreement to be mutually beneficial (Troot 2008).

4.0 Implementing innovation: 4.1 Managing Innovation and Operations Management: 4.1.1 Pearson's uncertainty map:

Pearson's uncertainty map aids in the understanding and analyzing of innovation and uncertainty process and focuses on two uncertainties; process and output (Pearson 1990). Innovation is complex process with several factors playing a role in one way or another causing uncertainty. Successful management of uncertainty will create an environment that fosters innovation (Troot 2008, 77). Kanopy is located in Quadrant 4, where they have low uncertainty about both process and output. They are combining market opportunities with technical capabilities. Furthermore, organisation who find themselves in quadrant 4 are likely to display characteristics like high technical skill, acceptance of outside technology, adequate resources and stable management.


Olivia Humphrey is now tasked with ensuring that Kanopy can take advantage of these developments and capitalise on them. 4.1.2 Innovation Process:

Numerous studies have been conducted in order to better understand innovation process, while some scholars like Prajogo and Ahmed (2006) discovered that innovation capacity was influenced by a combination of technological and human factors (Troot 2008, 82). Human factors vary from place to place due to culture and people. Humans provide an important aspect of innovation, the creative spark. Organisations that manage to facilitate this have an increased capacity for innovation (Chun and Ming 2010, 2234). On the technological factors, R&D is the driving force for innovation capacity. R&D activities have a positive effect on innovation, create new market and meet customer needs (Chun and Ming 2010, 2234). Olivia pointed out that Kanopy was constantly updating their library and empowering the students to dictate needs. Furthermore, Kanopy is continuously engaging students and creating apps that run on multiple devices in order to increase the level of depth in terms of viewing experience.

4.2 New Product Development: In the dynamic world of business, competition is fierce and organisations have no room for mistakes when developing new products because of the investment cost and opportunity cost involved. However, new products can also be successful at maintaining market position and improve profits (Ali 2000). Innovation and well-organized management are important in order to be successful (Shilling 2010). New product development therefore entails the step by step innovation of a product and the various perspectives during the process (Troot 2008).


4.2.1 NPD as a strategy for growth: One of the best methods used by marketers who have a focus on growth as the business objective by identifying various options. The Ansoft matrix is the tool used, it plots markets against products and then further sub divides them into existing and new categories. This helps identify market opportunities and product opportunities (Trott 2008, 392).

4.2.1.1 Market Development: Companies that have managed success in terms of growth of market share might seek opportunities in different geographical locations. Products would remain as they were but the audience that were aimed at would change. Kanopy should continue investing in the US as it promises to be their biggest market also they should consider introducing their services to lower education institutes and aim at where higher education students come from.


4.2.2 Network model of NPD:

A network model shows the theoretic viewpoint of a process, during the process of new product development it is expected that managers should be able to control the activities concerned (Trott 2008, 521). 4.2.2.1 Generating Business Opportunities: This is the stage in the NPD processes that is concerned with opportunity recognition. It examines prospective business opportunities that can be developed into a product. These opportunities can be created by 3 ways; reverse engineering, examine competitor products and brainstorming (Lilien et al. 2002). Kanopy has the opportunity to revolutionise education in the sense that their product appeals to their customers and creates a new dimension in learning. They should explore ways of further integrating their product with students and the web.


4.2.2.2 Screening of business opportunities:

The above diagram represents the general stages involved in screening of business opportunities. Better-quality ideas have the chance of becoming opportunities but there are four criteria that it is required to meet these are, solving a problem, creating value in the eyes of a consumer, ability to attain market share and also be commercially viable. Kanopy has to examine this section if it is to continue growing and ensure that they have the capacity to create products that meet the criteria.


5.0 Questions from the CEO: QN 1: How and where do you think Kanopy can continue to innovate preserve the trajectory of being true game-changers? Kanopy is advice to integrate their platform further with the web, they can do this by exploring already existing technologies like Popcorn which is a software that allows the user to remix and connect video to data and content with a real time link. Popcorn therefore is an online tool that allows anyone to combine video with online content that is pulled live directly from the web. In addition to the above, Kanopy has not explore any opportunities outside higher education institution and are advised to explore where do university students come from. Currently the education system in US is not doing well, click here for more info. Kanopy should look to team up with the examining boards and explore how videos can be used to stimulate curiosity in an aid to inspire learning and reduce the number of drop outs from school. This is where Kanopy should adopt strategies like market penetration and market development. According to Troot (2008), when a product is successful an organisation should keep innovating and renovating products in a bit to no lose their competitive edge and also keep updating their capabilities such as product development, design and others. QN 2: What do you think some of the challenges Kanopy will face in scaling up globally? Kanopy will be targeting a wider audience and will have an increase in customers. One of the challenges that they will face is the growing costs involved in cloud computing also they have to look at introducing subtitles in the videos so as to appeal to Non-English speaking people. If successful in the US, demand for Kanopy will rise and they will attract universities from developing countries, however in order for Kanopy to function in developing countries they will have to create a version of their website that can run on slow connections.


6.0 Conclusion and Recommendations: Kanopy is in the growth stage of the business and in order to capitalize on their innovation, Kanopy is recommended to; Firstly, use trade secrets as a means of protecting as it is fast and more affordable than patents. Kanopy should also align their business strategies with their IP strategies to enable them to also fend off competition. Secondly, Kanopy should also look at importing knowledge from the external environment or complementary technologies that are freely available like Popcorn. Furthermore, Olivia should focus on creating a culture where employees can share information among themselves and also aid them with necessary training all in a bid to increase their absorption capacity, ability to recognised opportunities. Thirdly, considering that Kanopy should pursue a market development strategy and capitalize on the opportunity presented by operating in the US. Kanopy already has a customer base even before they formally start operations in the US. This is courtesy of their alliance with Media Education Foundation, this type of collaborations is highly advantageous for Kanopy.


7.0 References: Ali, Abdul. 2000. "The Impact of Innovatiness and Development Time on New Product Performance for Small Firms". Marketing Letters 11(2): 151-163. http://www.jstor.org.dbgw.lis.curtin.edu.au/stable/40216567 Ansoff's product/market matrix. 2009. http://tutor2u.net/business/strategy/ansoff_matrix.html Bently, Lionel. 2012. "What Is "Intellectual Property"?" The Cambridge Law Journal 71 (3): 501-505. http://search.proquest.com/docview/1205329084?accountid=10382.Helm, R., 2010. Knowledge management in a multigenerational workforce: challenges and opportunities presented by older workers. Indian J. Econ. Bus., 9: 219-232. Calo, T., 2008. Talent management in the era of the aging workforce: The critical role of knowledge transfer. Public Personn. Manage., 37: 403-416. http://www.entrepreneur.com/tradejournals/article/ 192352085_5.html Cohen, W.M & Levinthal, D.A. 1990."Absorbptive capacity: a new persepective on learning and innovation". Administrative Science Quarterly, Vol. 35, No. 1, Special Issue: Technology, Organizations, and Innovation pp. 128-152. http://links.jstor.org/sici?sici=0001392%28199003%2935%3A1%3C128%3AACANPO%3E 2.0.CO%3B2-5 Fulwood, A. 2013. Streaming to Libraries. The Weekend Australia Financial Review: Smart Money Enterprise. March 9-10. http://www.kanopystreaming.com/sites/default/files/Financial%20Review%20Article.pdf Grant, Robert, Bella Butler, Humphry Hung, and Stuart Orr. 2011. “Contemporary Strategic Management: An Australia Perspective� Milton: John Wiley & Sons Australia, Ltd. Henk W., Nicolai J. Foss, and Marjorie A. Lyles. "Absorbing the Concept of Absorptive Capacity: How to Realize its Potential in the Organization Field." Organization Science 21, no. 4 (2010): 931-954. http://search.proquest.com/docview/725824476?accountid=10382Inkpen, Andrew C. and Li Kou-Qing. "Joint Venture Formation: Planning and Knowledge-Gathering for Success."Organizational Dynamics 27, no. 4 (1999): 33-47. http://search.proquest.com/docview/210594180?accountid=10382. Kotler, P. (1997), Marketing Management, 9th ed., Prentice-Hall, Englewood Cliffs, NJ.


Lilien, G.L. Morrison, P.D. Searls, K. Sannack, M. 2002. Performance Assessment of the Lead User Idea-Generation Process for New Product development. Management Science 48(8): 10421059. http://www.jstor.org/stable/822674 Min, Soonhong, Anthony S. Roath, Patricia J. Daugherty, Stefan E. Genchev, and et al. 2005. "Supply Chain Collaboration: What's Happening?" International Journal of Logistics Management 16 (2): 237-256. http://search.proquest.com/docview/235942954?accountid=10382. Neshevich, Carol. 1998. "Seeking Outside Help: Outsourcing the Network Can Save Companies a Lot of Hassle, but at What Cost?" Network World Canada 8 (21): 26-27. http://search.proquest.com/docview/198766747?accountid=10382. Pearson, Alan W. 1990. "Innovation Strategy." Technovation 10(3): 185-192 doi:10.1016/01664972(90)90023-d Pooley, Jim, and Walt Bratic. 1999. "The Value of Trade Secrets." Managing Intellectual Property (93): 66-69. http://search.proquest.com/docview/233238690?accountid=10382. Schilling, M. A. 2008. Strategic Management of Technological Innovation 3rd edn. Mc-Graw-Hill/Irwin, New York.Stevens, Roxanne Helm, Joshua Millage, and Sondra Clark. 2010. "Waves of Knowledge Management: The Flow between Explicit and Tacit Knowledge." American Journal of Economics and Business Administration 2 (1): 129-135. http://search.proquest.com/docview/1323908021?accountid=10382. Susan Ward. 2011. Trademark Definition. http://sbinfocananda.about.com/od/trademarks/g/trademark.html Singh, S.K. 2008. Role of leadership in knowledge management: a study. Journal of Knowledge Management 12(4): 3-15. Emerald. http://www.emeraldinsight.com.dbgw.lis.curtin.edu.au Trott, Paul. 2008. Innovation Management and New Product Development. Persons Edition.Volberda, . Vaidya, Sameer. "International Joint Ventures: An Integrated Framework." Competitiveness Review 19, no. 1 (2009): 8-16. doi:http://dx.doi.org/10.1108/10595420910929022. http://search.proquest.com/docview/213065243?accountid=10382.


8.0 Appendix: 1. Timeline of Kanopy:

2002 Opportunit y recognition

2008

-6 months off to explore the business plan

-Kanopy started off distribut ing DVDs

2007 -Kanopy was founded in Australia -Travelled the world to meet new customers

2011 -Kanopy started streami ng online

2009 -Kanopy breaks even and starts making a slight profit

-Curtin University, Edith Cowan University and NSW University first to start using Kanopy

2013 -Boston Concept offices

2012 -Entry into the US -New office in San Fransisco -Awarded WA Innovator of the year award -Kanopy was one of the finalist for the Mass Challenge Accelerator program

2. URL Links: 

http://www.youtube.com/watch?v=KVRpwVtAhsg

https://www.facebook.com/KanopyStreaming

http://www.youtube.com/watch?v=alV1uBRC-S8

http://www.youtube.com/watch?v=AORoMxgp428

http://www.ted.com/talks/ryan_merkley_online_video_annotated_remixed_an d_popped.html

http://www.ted.com/talks/sir_ken_robinson_bring_on_the_revolution.html

http://www.christianfea.com/4-powerful-joint-venture-advantages.html

http://www.kanopystreaming.com/sites/default/files/Financial%20Review%20 Article.pdf

http://www.mediaed.org/


Bachu moi digital report 2013  

Kanopy has won numerous awards like WA Innovator of the Year Award- Mitsubishi Growth Category and made it as a finalist of the MassChalleng...

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