BUSN11081 Innovation Entrepreneurship And The Market

Introduction

Increasing concerns for over consumption of natural resources, social inequity, and environmental degradation have called for the transition towards more sustainable society and economy. Similar to this concern of economic and social concerns business too have their concern for change in their business due to increasing competition in the globalising world (Tidd, and Bessant, 2014). This demand for change in the business for their long term sustainability demands for innovation. The term innovation in business refers for the change in processes, products, and ideas. These changes are made to enhance the sustainability of business in long term. This discussion is made to understand the innovation and its process. The term innovation defines itself as a change in the existing business product or idea (Rivas-Hermann, Köhler, and Scheepens, 2015). In business context the term innovation can be defined as implementing new business ideas, improving their services, or creating more dynamic products (Martin, 2017). Such changes are made to increase the business sustainability of an organization. Innovation in business can be used as a catalyst for the success and growth, and can help an organization to take a competitive advantage in the competitive world. Innovation does not always means inventing something. Sometimes, innovation stands for a small or big change in the business strategy, service or product (Kindström, and Kowalkowski, 2014).

Innovation 

Today in the merging world innovation the answer of a small question; what is next. For any kind of growth in business, innovation is the key to make a change for growth. While the process of innovation in any business, can be both exciting as well as doubting at the same time. There is no shortage of innovative ideas but leaders have to pick the best one (Tidd, and Bessant, 2018). Picking the best idea for innovation is not the only thing to make a change. Implementation the idea in company’s execution process is the biggest challenge for any organization (Bessant, and Tidd, 2011). In order to implement a new idea company needs a solid frame work describing the whole process of innovation implementation.

Innovation has its own importance in the process of growing an organization in the competitive market. In business, to take a competitive advantage innovation is open for all businesses (Meissner, Polt, and Vonortas, 2017). Along with this equal opportunity for businesses to introduce an innovation there are advantages that can help an organization to embrace its business.

• Solving problems with an innovation
• Adapting the market change in existing business
• Maximizing the business global
• Dealing with market competition
• Enhancing the dynamics of business
• Satisfying the customers with their taste and preferences

Along with such advantages, innovation has so many risks as well. No doubt there are so many advantages of innovation but innovation does not lack in terms of its associated risks as well (Martin, 2017). Although there are risks of innovation according to the type of innovation, there are also some risks that are common to all innovations like:

• Technical failure of the innovation
• Financial strain
• Market failure
• Lack of implementation capacity
• Organizational risks and many more.

After all these benefits and risks of an innovation companies can enhance their business growth with an effective and efficient implementation of innovation in their products or service. Organizations also have some assets individually that make them different from other and they can use such assets in the process of making an innovation successful. There are assets like, experience, creativity, leadership, and brand value. Innovative organization can use their experience in their new innovation. Since such organizations are familiar to the process of innovation and already invented some products or services so they can use their past experiences in their new innovation also.

Implementation

Today in the merging world innovation the answer of a small question; what is next. For any kind of growth in business, innovation is the key to make a change for growth. While the process of innovation in any business, can be both exciting as well as doubting at the same time. There is no shortage of innovative ideas but leaders have to pick the best one (Belias, 2016). Picking the best idea for innovation is not the only thing to make a change. Implementation the idea in company’s execution process is the biggest challenge for any organization. In order to implement a new idea company needs a solid frame work describing the whole process of innovation implementation. The whole process of innovation is carried out into five steps of Ideation, Research, Planning, Prototyping, and Launching (Hwang, Hwang, and Dong, 2015).

Ideation: this is the stage at which companies seek for different ideas from the people working in their organization. At this stage best minds of the company work on the problem that the company product or service is facing. They get so many ideas but there is only one idea is suitable for the company in terms of their capabilities of implementation as well as their resources to execute the idea. Therefore, leaders of the organization have to analyse the feasibility of idea as per the company capabilities and its effectiveness or demand for the product and service.

Research: In this step company has to work on the research task to make the best out of the idea. For this organization has to study the market demand and feasibility of their idea in the market.

Planning: Once the research is complete companies need to plan for the implementation process. Company has to decide the capital amount required for the innovation and other resources.

Prototyping: In this step company make efforts to make their investment worthy by checking the practical feasibility of their innovation by making only some of the products. This shows that hoe much the change is adapted by the customer and how to introduce the product or service.

Launch: Once the prototype of new product or service get success in the real market company can move forward for an official launch of the product. This launch will available the new product to their customer (Saebi, and Foss, 2015).

This whole discussion made on the innovation defines the importance of innovation and its goal. Innovation in the global world is on high demand to make business more sustainable. Also, innovation is note only invent new products but eh it is also the change made in the existing products or services. real world examples of innovation like, Coca-Cola and I-phone are the benchmarks to showcase the power of innovation in terms of business sustainability.

Innovation types

Over the last few years the term innovation has become a bit of catchword that is mentioned to describe the variety of new processed and results. From the beginning, it has been the tendency of business to associate the innovation with most ground-breaking ideas only. But the real fact about innovation in business encompasses the complete range of innovation that is from a smallest change or improvement in the existing product or service to radically new services and products. This conflict between two statements has taken the general definition of innovation to “the act of implementing ideas, instead of its changing impact”. In order to define the complete spectrum of innovation from a smallest change in existing product or service to the completely new product or service, this can be broken or classified into three bandwidths as: incremental innovation, breakthrough innovation and radical innovation (Hartley, Sørensen, and Torfing, 2013). This classification is mapped on two axes as: change in business model and innovation in technology. Incremental innovation also called the “Eureka Moments” for business (Bag, and Anand, 2016). This is the easiest way to introduce a change in the existing services and products of a business. Because of its simple mechanism almost 70% of innovations introduced falls under this innovation. Eureka moment innovation involves introducing small changes in the process of advancing the product or service. This innovation enhance the sustain value of products and service for the existing business. This process of introducing some eureka moments to the business is as simple as adding a new feature to any of the existing product. Different business matrix analysis of incremental innovation illustrates that this kind of innovation relies on the existing business model as well as existing technology. This make is least risky innovation as the product or service has no significant change to make a negative impact and can be reverse in case of failure (Norman,. and Verganti, 2014). This innovation helps organization to maintain their competence in the market along with the predictable revenues of the business. Key factors assuring the success are such as the understanding of whitespace or areas of improvement, understanding of basic customer needs from the existing product or service, and alternative ways of improving the service or product for adoption to meet customer needs. There are example of real world implementation of incremental innovation in organizations like Coca-Cola, Gillette, Cadbury, Sainsbury’s, and many more. Coca-Cola has extended its brand line started from Cherry Coke to Coke with lime and recent Coca-Cola. Such incremental changes in the brand line have enabled the company to survive since a long journey of 130 years. In this journey company had tapped into the emerging market trends and brought the something new to its customer every time (Menguc, Auh, and Yannopoulos, 2014).

Second type of innovation is defined as breakthrough innovation. Compared to the first type of innovation, few innovations fall in breakthrough innovation category as it is rare and difficult. In this type of innovation there is a complete change either in the business model or in the technology. This innovation is at a high risk as it requires a high investment of capital, resource and time as well in comparison to that of the incremental innovation (Silva, Styles, and Lages, 2017). Along with such high risk of asset investments, rewards of the innovation can be great as the innovation provides a new changed product of significantly better value to the customers. Actual implementation of such innovation is quite difficult as customers are very bad at foretelling their needs therefore, it is not that much easy to simply ask them for their future needs. This makes the innovation research more complex and difficult for organizations (Souto, 2015). In order to implement such improvements company need to use some efficient or innovative approach to know what exactly consumers are looking for. For this companies need some external help in the form of market analysts or some market behaviour experts. Third and the final bandwidth of innovation spectrum, is defined as Radical innovation. I-Phone is the best example showing breakthrough innovation in its products. From the very first basic model of I-phone, harnessing the technology company was able to bring new products to create new demands in the continuous process (Slater, Mohr, and Sengupta, 2014).

This type of innovation involves the implementation of harnessing advanced technology and a completely new business model simultaneously (Christensen, Raynor, and McDonald, 2015). This innovation is talked very frequently but in actual it is the rarest innovation among all therefore only remaining 10% of all the innovations fall in this category. Similar to the breakthrough innovation this innovation also requires an innovative approach to conduct research on the existing market and its future demands. But if executed successfully, results can be a market transformational change; defining a new benchmark for the completion, reshaping the existing market or sometimes creating a completely new market for the product. Salesforce is the best example of showing radical innovation throughout its journey. Company’s CRM system is harnessing not only a different technology platform but also shows a new innovative business model (Muckersie, 2016).

Conclusion 

Innovation is the strategy in which companies can invest all they have but they cannot guarantee the success. According to a study, most of the innovative companies are not the biggest investors. According to a survey of 450 innovation executives working at more than 400 companies around the world, they defined the innovation different from investment. Results show that among the top 10 innovators, 7 are not in the list of top 10 investors. And more interestingly, top 10 innovators turned out to be better companies in terms of finance than the top 10 investors. Apple, Google, 3M, GE, Toyota, Microsoft, P&G, IBM, Samsung, and Intel are the top innovators as per this study (Jeruzelski, and Mainardi2011).

References

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