How To Read This Report
This report is designed to effectively profile the two firms JB Hi-Fi and RedBalloon and compare its level of innovation and entrepreneurship within the firms.
We have uniquely set out the report with the intent to demonstrate a clear comparison between the two firms. We hope you find this it easy to read and visually appealing.
Today’s business environment is both fast paced and demanding. Organisational renewal and sustainable competitive advantages are not new ideas in a corporate context however the turbulence of turning these ideas into a reality has increased dramatically over the last decade. Small firms have swept the marketplace with innovative products and services and elaborate business models which have forced many large companies to re-evaluate their own businesses – particularly in areas of entrepreneurship and innovation in order to survive.
This report examines and compares how a fast growth small-medium enterprise (SME) and a large publically listed company in the same industry have adapted to this new business paradigm.
The selected SME is RedBalloon. RedBalloon is an online retail store founded by the highly commended female entrepreneur Naomi Simson. RedBalloon specialise in selling new ‘life experiences’ as gifts particularly to the corporate space as a hook to improve employee productivity. It was listed as one of the fastest growing companies in Australian four years in a row (BRW Fast 100, 2006-2009) and achieved a record annual revenue of $XXXXXmillion in .
The selected publically listed company selected is JB Hi-Fi, an electronics retailer with more than 140 stores Australia-wide. Founded in 1987, the company didn’t achieve rapid growth until the early 2000’s when it was acquired via management-buyout aided by private equity investment. Leading this shift was Richard Uechewitcz who became a marketing superstar turning JB Hi-Fi from 10 stores to 140 stores in seven years.
These companies were chosen due to their largely differentiating business structure, leadership styles, operation and corporate cultures. The research team believed that having two very different organisations would provide for an interesting analysis when presenting findings.
How innovative, risk-taking, and proactive are the firms?
Is it possible to position the company in the entrepreneurial grid and characterise the firms’ entrepreneurial intensity? Consider discussing whether you think there is an appropriate level of entrepreneurial intensity.
When assessing how market driven each firm was the research team analysed how dependent their strategies were guided by market trends and customer needs instead of the firm's productive capacity or current capabilities. Interestingly, both companies evolved since their inception and hence so did their strategies for adapting to market trends. Below is a slightly altered model of how the market focus of both companies changed from inception through different growth stages.
Domain of a new business
Market focus of the entrepreneurial initiative
Existing product in current industry
Product extension in current industry
New product in current industry
New industry entry and/or industry creation
Product focus of the entrepreneurial initiative
For purposes of analysis we assume that the core product of RedBalloon is to sell 'incentive-driven experiences to corporate employees' and that JB Hi-Fi sells 'electronic and entertainment goods at the lowest prices'.
Experience gifting was not a new concept however…