"Why Apple can create blockbusters?" ~ Re-think: Product Planning

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Many companies conduct product management without product planning.
They copy a product which is originally designed by other companies, and modify it.
They strive to survey technology/market trends and roadmaps from leading companies/giant research firms.
And they enhance the variety of functions and/or the numbers to make their spec table better.
They love to swim in the ‘red ocean’.

Apple is one of the companies which is carrying out product planning as well as product management.
It often enters the market very late, but re-creates the market itself.
Apple strives to understand what the user-experiences the customer looks for, values, and needs,
and re-invents the product category to make customers’ lifestyle better.
Apple loves to make her heart sing with her product.

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  • In order to really create a new category of devices, those devices are going to have to be far better at doing some key tasks. – Steve Jobs
  • Martin Cooper
  • “ To establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content.” Masaru Ibuka (Co-founder, Sony Corporation)
  • Sony Walkman TPS-L2 (1979) Photo by GeorgeArthur, Wikimedia
  • "You know how you see a show car, and it's really cool, and then four years later you see the production car, and it sucks? And you go, What happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory! "What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, 'Nah, we can't do that. That's impossible.' And so it gets a lot worse. Then they take it to the manufacturing people, and they go, 'We can't build that!' And it gets a lot worse." Read more: http://www.time.com/time/magazine/article/0,9171,1118384,00.html#ixzz1Uf1Ug8I8
  • "It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do. "So you can't go out and ask people, you know, what the next big [thing.] There's a great quote by Henry Ford, right? He said, 'If I'd have asked my customers what they wanted, they would have told me "A faster horse." ' " http://money.cnn.com/galleries/2008/fortune/0803/gallery.jobsqna.fortune/2.html
  • Sony also often entered market Radio -> Already widespread in 1955 -> Transistor Radio, pocket radio Color TV -> in 1960s, color TV’s market share was growing to 25%. -> Sony released the color TV very late. But it was Trinitron, very bright. Sony had got market leader next over 30 years. VTR -> entered late, but like Apple’s Apple II, first home use VTR Game -> Nintendo, Sega -> PlayStation Walkman and bunch of “world first all transistor xxx. Digital tape, CD, MO, MD
  • “ Towards a Definition of Creativity“ Wisconsin Task Force on Arts and Creativity in Education
  • "Why Apple can create blockbusters?" ~ Re-think: Product Planning

    1. 1. - Version 1.0 - re-­‐think:  Product  Planning ~  Why  Apple  can  create  blockbusters?  ~ Chikafuji,  Ryu
    2. 2. For  persons  who  are  interested  in  consumer   products,  services,  and  markets. –  Aug/25/2011 (last  revised  on  Dec/18/2013)
    3. 3. chapter  1 tempta5on
    4. 4. There  is  nothing  more  important  task  than  to  find  out: “what user-experiences the customer looks for, values, and needs”. Everyone  knows  this,  but  this  isn’t  easy  task.
    5. 5. Instead,  many  companies  give  an  ear  to  the  industry’s   influencers,  and  oversee  compeItors,  apart  from  their   target  customers.   A  Company (a  consumer  products  company) Target  Customers Influencers (big  research  firms,  oligopoly  firms)
    6. 6. Instead,  many  companies  give  an  ear  to  the  industry’s   influencers,  and  oversee  compeItors,  apart  from  their   target  customers.   A  Company (a  consumer  products  company) CompeItors Target  Customers
    7. 7. Curious  to  say,  influencers  provide  the  vision  of  the  newly   defined  product  category  for  their  customers,  the  consumer   products  companies.   (*) examples of influencers
    8. 8. Actually,  many  influencers  have  global  markeIng  plaLorms   to  survey  their  customers’  potenIal  market.  
    9. 9. Problem  is  that  the  influencers’  happiness  doesn’t   correspond  the  companies’  happiness.  
    10. 10. Everybody Netbook! (with Wintel !!!) The  influencers’  happiness  is  to  spur  an  intense  compeIIon   in  their  customers’  market  because  such  compeIIon  brings   them  huge  revenue.  
    11. 11. The  influencers  elegantly  lead   their  customers  into  a  intense   compeIIon.  
    12. 12. The  compeIIon  makes  the  influencers’  hearts  sing,   while  the  companies’  hearts  be  exhausted.
    13. 13. It’s  Ime  to  re-­‐think.
    14. 14. chapter  2 re-­‐think
    15. 15. Many  companies  start  from  products.   They  improve  exisIng  products  and  make  the  spec  table   beRer  one.   New segment Existing market Existing market Sometimes they create a new segment.
    16. 16. Fewer  companies  start  from  people.   They  innovate  new  user  experiences  and  make  the   people’s  life  beRer  one. Existing market Existing market Sometimes they create a new market. New market
    17. 17. My  focus  here  is  clearly  on  the  laRer  case,   “start  from  people” *Lots of theories, practices, consulting services are available for the former case, such as theory of competition, product management practices, social media marketing, etc.
    18. 18. True  markeIng  says,  “These are the user-experiences the customer looks for, values, and needs.” True marketing says, “These are satisfactions the customer looks for, values, and needs.” – Peter. F. Drucker
    19. 19. To  find  out  ”the user-experiences” is  the  starIng  line   for  new  product  planning,  however,  
    20. 20. You can’t go out and ask people, you know, what the next big thing. – Steve Jobs “Steve Jobs speaks out”, CNN Money, Aug/03/2008
    21. 21. [This  product  is  “Innova5ve”]  means  that  the  product   brings  far  be;er  user-­‐experience  to  the  target  customers.
    22. 22. user-experience New trajectory Innovative Product Discontinuity Conventional Products Conventional trajectory (incremental improvement) time In  other  words,  there  must  be  discon5nuity  between   the  trajectory  of  convenIonal  products  and  an  innovaIve   product  in  terms  of  “user-­‐experience”.
    23. 23. What  ordinary  people  can  imagine  is  limited  to   incremental  improvement  of  exisIng  products,   their  imaginaIon  can’t  beyond  this  disconInuity.
    24. 24. If I had asked people what they wanted, they would have said “faster horses” – Henry Ford Founder of the Ford Motor Company
    25. 25. (Around 2000,) We did market survey about the demand for camera-phone, not once, four times. Every time the results showed negative. However, nowadays, camera-phone became standard. – A comment from a marketing director (Martin Cooper’s Keynote Speech at IEEE Wescon 2005)
    26. 26. It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it(*) to them. – Steve Jobs (*) From the context, “it” doesn’t mean prototype, “it” means finished product such as shown at Apple’s conference.
    27. 27. It’s  us  who  have  to  answer  the  quesIon:   “what the next big thing”
    28. 28. Both Honda-san(*) and I had never started product development from technological point of view. The first and foremost priority was our goal what product we really wanted to make. – Masaru Ibuka, co-founder of Sony Quoted from“The Soul of Monozukuri” Masaru Ibuka, photo from www.sony.net (*) Soichiro Honda, founder of HONDA
    29. 29. The idea for the Walkman had come from Ibuka, who was over 70 years old, and Morita(*), himself approaching 60 enthusiastically supported it. Not content to rest on their laurels, both kept looking for new ideas and strove to understand what kind of products would meet the lifestyle needs of young people. – Quoted from “Sony History”, www.sony.net (*) Morita: Akio Morita, co-founder of Sony
    30. 30. "It was very nearly fetishistic, in fact – he even had a collection of Sony letterhead and marketing materials," laughs Deutschman(*). "Sony was a company that Jobs instinctively admired and saw as model from the very beginning.” By Jeff Yang, "How Steve Jobs 'out-Japanned' Japan”, SF Gate (*) Alan Deutschman, Author of "Walk the Walk", Professor at University Nevada-Reno.
    31. 31. Steve  Jobs  simply  described  Ibuka’s  way:
    32. 32. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do. – Steve Jobs CNN Money, Aug/03/2008
    33. 33. Once  we  reach  a  strong  confidence  that   “a lot of other people are going to want it, too”, then  most  barriers  which  prevent  us  from  innovaIon   are  removed.
    34. 34. You  may  have  heard  the  following  sentences.
    35. 35. “I  requested  engineering  team  to  implement  that  feature,   but  they  said  it  was  too  difficult  and  too  risky  to  do  it.   So,  we  had  to  abandon  it.  However,  our  compeMtor  could   do  it  and  we  are  in  for  it  now.  Stupid  engineering  team!” Marketers
    36. 36. “I  asked  markeMng  guys  how  criMcal  to  implement  that   feature  for  our  business.  But  they  didn’t  show  any   compelling  explanaMons.  So,  we  had  to  make  it  lower-­‐ priority  task.  Otherwise,  we  could  do  it!  Our  markeMng   team  doesn’t  work  at  all” Engineers
    37. 37. Before  iPhone,  most  manufacturers  believed  that  it  was   impossible  to  implement  full-­‐web  browser  on  mobile  handset.  
    38. 38. But  just  less  than  one  year  a^er  iPhone,  many  manufacturers   released  mobile  handsets  with  full-­‐web  browser.  
    39. 39. What  does  all  this  mean?  
    40. 40. We  see  a  lot  of  similar  stories  in  our  history: Transister  Radio,  Home  VTR,  Walkman,  Personal   Computer,  Megapixel  Digital  Camera,  Full-­‐flat  CRT,  Large   format  LCD,  Boradband,  Tablet  PC,  …  etc.    
    41. 41. What  does  all  this  mean?  
    42. 42. Barriers  against  an  innovaIon  are  not  so  high   if  we  share  a  strong  confidence  that   “a lot of other people are going to want it, too”.
    43. 43. This confidence fires up us to realize far better user-experiences, innovative products, no matter how high the barrier may be.
    44. 44. You  know,  potenIal  ability  of  engineering  is  much  higher   than  we  expect  and  engineers  can  be  more  flexible  if  they   share  the  confidence.
    45. 45. MarkeIng,  sales,  logisIcs,  legal,  producIon,  PR,  IP,  HR,   or  top  managements,  in  whatever  secIons,  persons  in   charge  can  be  more  passionate  and  creaIve  if  they   share  the  confidence.
    46. 46. The  missing  piece  for  innovaIon  is  the  strong  confidence   that  ”a lot of other people are going to want it, too”.
    47. 47. The  key  to  get  strong  confidence  is  the  ability   to  understand  and  share  the  feelings  of  target   customers,  that  is,  “Empathy”.   empathy: the ability to understand and share the feelings of another. (by Concise Oxford English Dictionary)
    48. 48. chapter  3 think  about
    49. 49. Keynote speech, Mar/2011, from Apple.com It's in Apple's DNA. The technology alone is not enough. That is technology married with the liberal arts, married with the humanities, that yields us the result that makes our hearts sing. – Steve Jobs
    50. 50. This  sentence  explains  about  the  advantage  of  Apple’s   products,  but  it  doesn’t  explain  why  they  can  create   such  aRracIve  products.  
    51. 51. The  quesIon  I’d  like  to  ask  here  is:              “How  to  create  such  a`racMve  products?”
    52. 52. The  answer  must  be  very  basic  and  obvious.
    53. 53. Apple  has  strong  confidence  that  she  gets   what  the  customers  want  to  buy.
    54. 54. Apple  is  always  striving  to  find  out: “what user-experiences the customer looks for, values, and needs”.
    55. 55. Apple  spends  enough  Ime  for  this  task.  
    56. 56. So,  Apple  o^en  enters  the  market  very  late,  and   she  gorgeously  re-­‐defines  the  product  which   makes  customers’  hearts  sing  as  well  as  herself. Category Inception Apple Product Released MP3 Player 1997 iPod 2001 MP3 Download(*) 1999 iTune Store 2003 Smart Phone 2001 iPhone 2007 Mobile App(**) 1999 App Store 2008 Netbook 2007 iPad 2010 Apple’s  blockbusters (*) Napster, etc. (**) NTT docomo, etc
    57. 57. The greatest praise an innovation can receive is for people say, "This is obvious. Why didn't I think of it?" – Peter. F. Drucker
    58. 58. Looking  back  from  today:   The  demands  for  iPod  &  iTune  Store  was  obvious  around   1999. The  demands  for  “Breakthrough  internet  communicator(*)”   was  obvious  around  2005. The  demands  for  “big  iPhone”  was  obvious  around  2008.     (*)  Steve  Jobs’s  introducMon  words  about  iPhone
    59. 59. It  may  sound  paradoxical,  but  Steve  Jobs  says: “We do no market research. We don’t hire consultants.”
    60. 60. MeanIme,  Apple  has  been  building  a  huge  plaLorm.
    61. 61. Apple Store, Photo by Camillo Miller, Flickr Apple  Store  was  launched  on  May/2001,  5  months  before   the  first  iPod  would  be  released,  two  years  before  the  iTune   Store  would  be  launched.   (*)At  that  Ime,  Apple's  annual  revenue  was  only  $5.4  billion  and  loss  was  $25  million.  There   were  only  Notebook  and  Desktop  computers  in  the  Apple  Stores.
    62. 62. In  2011,  Apple  has  336  stores  in  11  naIons: Switzerland:  3 Germany:  5 UK:  30 Canada:  20 China:  4 France:  7 Spain:  2 US:  240 Japan:  7 Italy:  6 Australia:  12
    63. 63. 5.8  millions  people  come  to  Apple  Stores  each  week  and   610,000  members  in  “one-­‐to-­‐one”  service. (data  from  ifoAppleStore.com) One-to-one service at Apple Store Photo by Phil Photostream, Flickr
    64. 64. Apple Store Photo by Camillo Miller, Flickr Apple  has  about  50,000  employees  and  about  30,000  of  them   are  working  at  Apple  Stores  as  full-­‐Ime  employees.  60%  of   employees  are  there  sharing  their  vision  "Enrich  Lives".   (*)  Gateway,  now  a  subsidiary  of  Acer,  had  similar  retailing  strategy,  but  they  didn't  hire  their   own  people,  didn't  own  real  estate.  On  the  other  hand,  Apple  does.
    65. 65. The only way to enrich their life is to be part of their life. – Ron Johnson Senior Vice President of Retail, Apple
    66. 66. Apple  Store  became  the  most  powerful   “empathy”  plaLorm  on  the  planet.
    67. 67. chapter  4 Empathy
    68. 68. The business enterprise has two – and only these two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are “costs” – Peter F. Drucker
    69. 69. Empathy: [em-puh-thee] - the ability to understand and share the feelings of the target customers; “the CORE” ability of Marketing Empathy MarkeIng
    70. 70. Empathy: [em-puh-thee] - the ability to understand and share the feelings of the target customers; “the Source” of Innovation encourage Motivation (act) Passion (triumph) Empathy Innovation (produce) Creativity (think) inspire Imagination (feel) [ref]“Towards a Definition of Creativity“, Wisconsin Task Force on Arts and Creativity in Education
    71. 71. “Empathy”  is  the  very  core  ability  for  both   markeIng  and  innovaIon,  the  two  basic  funcIons   of  business  enterprise.
    72. 72. Some  companies  already  executed  drasIc  investment   for  the  Empathy  as  an  system.
    73. 73. Apple  has  been  building  huge  and  gorgeous   Empathy  plaLorm,  Apple  Store.
    74. 74. Samsung  has  “Regional  Specialist  Program”,   a  very  aggressive  Empathy  culIvaIon  program. (*) see http://is.gd/Eu0Gfy This is very old program, since 1990.
    75. 75. Dyson’s  engineers  home-­‐stayed  in  Japan  several  months   to  understand  and  share  the  people’s  lifestyle  before   designing  DC12. Dyson’s vacuum cleaner DC12, a strategic product for Japan market
    76. 76. However,  to  build  the  Empathy  as  an  effecIve  system   is  not  easy,  especially,  in  this  profound  changing  age.
    77. 77. Life Style Connected Society Declining Birth Rate and Aging Population Sustainable Society Diversity & Inclusion Later Marriage …
    78. 78. Global  Economy Share  of  Global  GDP Ø USA:        31%(2000)  -­‐-­‐-­‐>  18%(2015)(*1) Ø BRICS:    8%(2000)      -­‐-­‐-­‐>  23%(2015)  -­‐-­‐-­‐>  31%(2020)(*2) Share  of  Global  Cell-­‐Phone  Market(*3) Ø USA  market:  50%  (1998)  -­‐-­‐-­‐>  12%  (2015) Ø Asia  market:  19%  (1998)  -­‐-­‐-­‐>  50%  (2015) E7  will  beyond  G7  in  2020  in  terms  of  GDP(*4) (*1) IMF (*2) BRICS Summit (*3) Softbank (*4) PWC
    79. 79. Lifestyle  changes  day-­‐to-­‐day,   market  changes  globally.
    80. 80. Once  again,  “Empathy”  is  the  very  core  ability  for  business.
    81. 81. Are  you  being  inspired  through   target  customers?
    82. 82. Are  you  culIvaIng  your  passion  through   target  customers?
    83. 83. Are  you  and  your  company  ready  for   the  next  decade?
    84. 84. visit: tansalink.com An answer will be shared here in version 1.0 …  to  be  posted.

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