This week I will analyze some of the strategies and tactics that Cree used as they prepared to launch their consumer LED light bulb in 2013 (Collis, Furey, & Shaffer, 2014, p. 1-25; Gourville & Norris, 2016, p. 1-20). As I do so, I will discuss how I would use these strategies and tactics if I were the communication manager of a fictional insulation company called Insulation Inc. Some of the points I will discuss in this post include analyzing the competition, maintaining maximum control, and building partnerships with other companies.
First, Insulation Inc. should borrow Cree’s strategy of analyzing the competition. For example, when Cree was preparing to shift from a business market to a consumer market, they studied their competition and realized that many of their rivals had stopped being innovative (Gourville & Norris, 2016, p. 11). They also realized that many of their competitor’s light bulbs were costing customers “$7 of electricity a year if used three hours a day” and that the average light bulb only lasted a couple of years. This analysis inspired Cree to develop a new LED light bulb in 2013, which could last for 20 years and only cost customers $1 per year in electric fees (Helman, 2013, par. 5).
To apply this strategy to Insulation Inc., I would examine how my rival’s products were influencing their customer’s lives. Some of the factors I might consider in this analysis include how thick the material is, what the material is made of, and how much the material costs to make. Once I had this information, I would then use it to develop a more unique and innovative product that would more adequately meet my target’s needs. For example, if my research indicated that other products weren’t holding in enough warm air during the winter, I would find a way to create a new type of insulation that could more effectively regulate temperatures (Steffan, 2016, par. 1).
Next, Insulation Inc. should borrow Cree’s strategy of maintaining maximum control over their value chain (Gertner, 2015, par. 2; Gourville & Norris, 2016, p. 10). For example, when Cree was creating their LED light bulb, most of their research and development took place in a hidden warehouse to avoid drawing the suspicion of both employees and competitors. This tactic allowed Cree to keep their new light bulb a secret until they were ready to publicly launch it (Gourville & Norris, 2016, p. 10-11).
In the case of Insulation Inc., I would maintain maximum control by keeping the company’s upcoming products “under lock and key” (Collis, Furey, & Shaffer, 2014, p. 8). For example, if Insulation Inc. was developing a warmer type of insulation, I would only allow employees to know about it if they were assigned to directly work on its development. These employees would each have special security clearance to a discrete location of the company, where they could research and develop the products without others finding out. I would also keep any essential documents about these projects in a safe that only company owners could access.
Lastly, Insulation Inc. should borrow Cree’s strategy of building partnerships with other companies. For example, When Cree was first developing their LED light bulbs, they formed an exclusive partnership with The Home Depot. This partnership was a huge benefit to Cree because it helped them quickly reach their target audience and make “$1.3 billion in [light bulb] sales and $70 million in earnings” within only a year (Gourville & Norris, 2016, p. 16; Helman, 2013, par. 5, 11, 13-14). If I were the communication manager of Insulation Inc., I would try to build relationships with companies who had a direct line of access to the homeowners I wanted to reach. Some of the companies I would try to establish relationships with would include Lowes, The Home Depot, and other similar hardware stores. This would be done to help Insulation Inc. maximize their chances of reaching their target audience of homeowners who want to upgrade their homes (Gourville & Norris, 2016, p. 12).
References:
Collis, D., Furey, M., & Shaffer, M. (2014). Cree, Inc.: Which bright future? Harvard Business Review, 1-26.
Gertner, J., & Gertner, J. (2015, February 09). Cree. Retrieved July 20, 2019, from https://www.fastcompany.com/3039591/cree.
Gourville, J., & Norris, M. (2016). Cree, Inc.: Introducing the LED light bulb. Harvard Business Review, 1-20. Helman, C. (2013, May 28). How Cree Perfected The 20-Year Lightbulb. Retrieved July 20, 2019, from https://www.forbes.com/sites/christopherhelman/2013/05/22/how-cree-perfected-the-20-year-lightbulb/#2cf0901a1cc2.
Steffan, R. (2016, October 07). How Does Insulation Conserve Energy? Retrieved July 23, 2019, from https://homeguides.sfgate.com/insulation-conserve-energy-78704.html.
