Innovation And Entrepreneurship In Business Essay.

What is Innovation?

Question:

Discuss about the Innovation and Entrepreneurship to Enhance Business Practices.

Innovation is the process of translating invention or idea into a process, good or service that creates value for customers, government or organizations (Baregheh et al., 2009). Innovation also involve implementation of new or significantly improved product that creates value to the society. The idea must therefore satisfy a specific need in order to be regarded as innovative. The customers’ change in taste and preferences requires organization to generate new ideas that can be applied to processes, products and services to satisfy the needs and expectations of the customers. The innovation is prerequisite for business organization to create revolutionary products that create new markets (Archibugi & Iammarino, 2002). The scientific knowledge generated through experimentation studies has contributed immensely to creation of many things that has not previously been in existence. With this regard, organization need to allocate resources for research to stimulate innovation that increases competitive advantage. The IT industries producing electrical like phones, tablets, laptops and desktop computers are being innovative by incorporating new features to their products to create niche and increasing purchasing power for its customers. This is seen in several new phone and computer models released into the market every day (Bhuie et al., 2004).

The transport industry has huge potential of employing innovation to create market for its services. Innovations are evolutionary in the sense that it finds ways of making improvements to existing goods and services. There are huge benefits to organization engaging in creativity and innovation, in that it is able to improve employee performance, foster company’s image and apply new technology in business to minimize cost and increase production efficiency. Innovation is also important for organization to differentiate its products from those of competitors. This is because the clients and customers are keen on products with distinctive and valuable features (Kristensson et al., 2008). The innovation by employees can be achieved through motivation.

The population is growing rapidly in many parts of the world necessitating creation of jobs to provide employment opportunities for young population. The entrepreneurs need to be innovative to solve problems associated with rapid population such waste management, provision of better healthcare, increase food security, high-quality education and clean energy and improve transport and communication. Entrepreneurship simply refers to taking risk in business venture to make profit (Koellinger, Minniti & Schade, 2007). Creativity is the heart of enterprise to create value to the society through provision of goods and services while accumulating wealth (Fillis & Rentschler, 2010).  The developed countries can attribute their economic development to innovative entrepreneurial approach to business. This is due to shift in focus of managers from quantity to quality and products to processes (Baron & Tang, 2011). This is true for many industries across the world that have realized the need to increase customer satisfaction through laying foundation of their business in creativity and innovation. 

In the current century, innovation and entrepreneurship seems inseparable. Innovation is a necessity for all business organization irrespective of their sizes due to competition that has extended from local to global scale. Krishna and Swathi (2013) argued that Indian companies are able to compete successfully against international companies due to investment in research and development to improve performance. Trade liberalization led to abolishment of tariffs and quotas, reduced protection of local industries, minimization of government controls, increased foreign investments and increased competition. These factors have forced entrepreneurs to be creative and innovative in order to survive (Anderson et al., 2014). Creativity and innovation is vital for entrepreneur to deliver a mix of value by doing things differently. Furthermore, entrepreneur’s creativity allows him to drive well in the market by changing process and goods to create demand. Entrepreneurs drive innovation and creativity to produce solutions to their business by developing alternative approaches (Berry et al., 2006).

Importance of Innovation in Organizations

The competitive advantage of Uber is attributed to its adoption of technology to cab transport. The company has developed smartphone app that allows customers to connect with nearby available drivers. The popularity of Uber app has risen significantly and it is being used in more than 58 countries worldwide. Many authors have reported that the current customers have changed their shopping behavior preferring online shops rather than physical stores (Çelik, 2011). Uber recognized market gap and develop mobile app that is easy to use since many customers do research of products and services online. Uber speed up thing by providing its drivers with app to check customers out and ease their mobility. The digital experience for millennials customers is proving useful for Uber to create its own niche by attracting the both old and young generation who spent more time mobile internet platforms.

Dennis et al. (2010) mentioned that business stand to benefit on employing technology to win customers due to rising population that spend more time browsing and shopping online. Furthermore the increased information and technology has led to increased customers engaging on social media platforms and mobile applications enabling Uber to take advantage of this opportunity to build its brand by enhancing customer experience. The company is actively engaged in digital and social marketing to win customers on many social networking sites like Facebook, Twitter, Snapchat, Instagram and many more by increasing digital presence and  gain competitive advantage (Cusumano, 2015).

The Uber company allows flexible company for its employees particularly the drivers who choses when to work. Uber allows drivers to use their own vehicles and offers flexible work schedule in that Uber drivers can turn their availability off. Flexible working conditions has been reported to benefit both the employer and employee. Employees can work wherever they need to be that could include home, during commute or even in a café. By using technology such as mobile internet, Uber drivers are able to connect with their customers without necessarily being in a given place waiting for customers or driving around looking for customers. As a result this innovative strategy has attracted many drivers to join Uber so as to save on fuel and time. The benefits the Uber has gained by allowing wok flexibility of its drivers include better customer service, increased drivers retention, more motivated workforce and having working hours that suit drivers and customers.

Uber has invested heavily in the growth of business to increase its business the bigger the company the stronger it is. Being able to cater for transport services that meet and surpass customer expectation before competitors realizes is a winning strategy for Uber. Uber is always fats in raising capital to secure more rider and acquire larger market share in order to increase its profitability. Speed is critical component of entrepreneurship as it enables business to be adaptive to changing external environment. Uber is always on the move researching customers’ needs and making improvements to change current processes to match market demands delivering what transport market want and growing the business (Sun & Edara, 2015).

Entrepreneurship in Business

Ubers speed to the market gives it competitive advantage when it comes to innovation, opportunity to dominate the market and a better reputation for being the leader in the industry rather than a follower. Uber is using speed in innovation to add new services to cab industry that maximizes customers’ value and experience. The company initially allowed payment using credit cards only, however, Uber acted swiftly to accept cash payment in many country with less credit cards like India. Furthermore, the company is pursuing an option to adopt self-driving cars to achieve competitive advantage in new market created by self-driven vehicles. Furthermore, Uber is forging ahead to increase its service delivery by having innovative partnership with other companies like Tarwood, UberRUSH, UberFRESH and Uber EATS (Levinson, 2015).

Conclusion

The most innovative way the Uber is using to gain competitive advantage is by leveraging on technology to cut cost and gain competitive advantage. The company has been able to grow its share market by lounging competitive products that match customers’ needs. Particularly the mobile technology is playing significant role in Uber business since the customer and drivers communicate through mobile app regardless of where they are. In this case, the drivers are able to respond quickly to customers call for a ride. It can be concluded that  mobile-based technology has created new marketplace for Uber thus enhancing its performance.

The company is able to executive innovative ideas by tapping on skilled and talented workforce. Uber has poached experts from Google to help in enhancing its app in relation to mapping and geospatial solutions (Wingard, 2015). The talented workforce in Uber is aimed at enhancing service delivery to the customers though easy order, ensuring certainty of arrival for customers and easy payment. The organization is offering customers relatively lower prices as compared to the competitors as an innovative strategy to gain wide markets share.

Uber is treating its drivers same was as customers so as to motivate them cultivate a higher-quality workforce that lead to increased customer satisfaction. The company is motivating its emloyees by offering competitive wage and commission packages that is higher than other competing taxi drivers. Another innovative strategy to save on cost and maximize profit is by allowing driver to use their own cars thus saving on cost associated capital expenditure on acquisition of new cars and expenses associated with car repair and insurance. The Uber’s innovative business practices are aimed at boosting drivers satisfaction that translates to maximum customers’ experience.

However, there is need of Uber to improve their app in terms of ease to use, learnability and efficacy in order to win customer loyalty. Furthermore, there has been many issues related to drivers welfare in terms of social security and insurance policies. These issues must be addressed to prevent strike, negative publicity and disruption of service delivery to customer.

References

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Archibugi, D., & Iammarino, S. (2002). The globalization of technological innovation: definition and evidence. Review of International Political Economy, 9(1), 98-122.

Baregheh, A., Rowley, J., & Sambrook, S. (2009). Towards a multidisciplinary definition of innovation. Management decision, 47(8), 1323-1339.

Berry, L. L., Shankar, V., Parish, J. T., Cadwallader, S., & Dotzel, T. (2006). Creating new markets through service innovation. MIT Sloan Management Review, 47(2), 56.

Bhuie, A. K., Ogunseitan, O. A., Saphores, J. D., & Shapiro, A. A. (2004, May). Environmental and economic trade-offs in consumer electronic products recycling: a case study of cell phones and computers. In Electronics and the Environment, 2004. Conference Record. 2004 IEEE International Symposium on (pp. 74-79). IEEE.

Çelik, H. (2011). Influence of social norms, perceived playfulness and online shopping anxiety on customers' adoption of online retail shopping: An empirical study in the Turkish context. International Journal of Retail & Distribution Management, 39(6), 390-413.

Cusumano, M. A. (2015). How traditional firms must compete in the sharing economy. Communications of the ACM, 58(1), 32-34.

Dennis, C., Morgan, A., Wright, L. T., & Jayawardhena, C. (2010). The influences of social e-shopping in enhancing young women's online shopping behaviour. Journal of Customer Behaviour, 9(2), 151-174.

Fillis, I., & Rentschler, R. (2010). The role of creativity in entrepreneurship. Journal of Enterprising Culture, 18(01), 49-81.

Koellinger, P., Minniti, M., & Schade, C. (2007). “I think I can, I think I can”: Overconfidence and entrepreneurial behavior. Journal of economic psychology, 28(4), 502-527.

Krishna, R. R.., & Swathi, A. (2013). Role of creativity and innovation in entrepreneurship. Innovative Journal of Business and Management, 2(5), 112-115.

Kristensson, P., Matthing, J., & Johansson, N. (2008). Key strategies for the successful involvement of customers in the co-creation of new technology-based services. International journal of service industry management, 19(4), 474-491.

Levinson, P. (2015). 3 reasons why Uber will win in the end. Retrieved on May 4, 2017 from Business Insider: https://www.businessinsider.com/why-uber-will-win-in-the-end-2015-10?IR=T.

Sun, C., & Edara, P. (2015). Is Getting an Uber-Lyft from a Sidecar Different from Hailing a Taxi? Current Dynamic Ridesharing Controversy. Transportation Research Record: Journal of the Transportation Research Board, (2536), 60-66.

Wingard, J. (2015). What Uber is getting right that other startups aren’t. Retrieved on May 4, 2017 from Fortune Insider: https://fortune.com/2015/09/19/uber-google-skills-gap/.