- Innovation has an important role in the business in order to survive in the competitive market (Verworn & Herstatt, 2002). FutureMed is famous and large radiopharmaceutical company operating in Australia. The company provides pharmaceutical drugs that are radioactive.
- Company has unique medicinal formulations including radioisotopes that can be used in major clinical areas for diagnosis and therapy.
- There are various operations in the company including finance, operations, marketing, and research and development. The senior management team is made up to manage every department.
In case of the Company FutureMed, there are various internal factors affecting the innovation process of the business. The innovation process of the company is the result of the accumulation of resources and generating new ones especially knowledge. Internal factors of FutureMed affecting the innovation process are described below:
- Human resources- The role of human resource department in the company is to motivate the employees towards the innovation process. The HR practices in FutureMed is helpful in facilitating innovation by reinforcing employee role behaviors such as creativity, cooperation and trust, long-term orientation, risk taking and tolerance of conflict. Employees can create resistance towards the innovation and bin such condition; company needs support from the human resource department in terms of training new skills, and psychological support. So, human resource can affect the innovation process in FutureMed.
- Research and Development activities- Pharmaceutical companies like FutureMed is engaged with the research and development activities since most of the developed innovations are technological. In order to maintain a strong competitive position, FutureMed is facing continuous pressure to innovation. It is observed that research and development environment mainly experiences challenges in internal collaboration. Sometimes, there is the lack of motivation for explorative activities.
There are some more internal factors affecting the innovation process and those are as follows:
- Management and leadership support-Company FutureMed can face challenges in terms of leadership or management challenges while focusing on product innovation. Leadership in the company creates the environment in which people interact and operate. If leader or manager in the company does not show any interest in innovation then employees will not be ready to adapt the change related to innovations. In FutureMed, there can the issues with innovation related to group think and decision making. So, leader must be active to check the messages otherwise this can degenerate the group thinking (Glor, 2002).
- Lack of Ideas-In FutureMed, innovation is not possible with the new and innovative ideas. If there is the lack of ideas among the employees, they will not be able to actively participate in the product innovation process. Lack of knowledge on innovation, weak learning environment and lack of need to innovate are the factors that restrict the employees to share their new and innovative ideas.
- Financial Resources- Innovative projects in FutureMed needs financial resources. Sometimes, inflexible funding in the company can be a big issue. Funding can be a problem due to alignment of centralization or decentralization principles and differences in power level and types. Now. There is the uncertainty of various sources of funds.
- Weak Change management- Further, weak change management program can also be a factor that can impact the innovation process in FutureMed. The company may be scared of various consequences and are not inclined to act innovations. Weak change management will not be able to deal with the resistance to innovation. There can be three types of resistance i.e. open (employees expresses the grievances or react immediately), hidden (loss of willingness to work and loyalty) and delayed (real reaction after a certain period of time). Weak change management can be a barrier for the innovation in the company (Ya?ar, 2010).
In order to address the internal factors in the Company FutureMed, there are some recommendations so that the innovation process can be effective,
- Supporting and encouraging employees- Company will be successful when leadership and management will support the innovation from all the levels of business. Senior management of the company should communicate about the mission and the commitment to innovation, empower the employees, give them opportunity to express new ideas and make the connection with the innovation process (Afuah, 2009).
- Rewarding Innovative Employees- Human Resource Management of the company should support innovation by rewarding the employees who develop innovation process by their new ideas. The management can also provide group incentive rewards in order to push the creativity for innovation (Giedraityte & Raipa, 2014).
- Learning from other companies- Management should seek out and benchmark best practices by bringing experts, facilitators and by participating in professional networks. It is important that senior managers support and encourage the learning. Employees should be encouraged by workshops and trainings of creative knowledge.
- Experimenting and evaluating- Innovation basically includes success as well as failure. If company faces failure, then management should learn from the mistakes and looking forward for creativity and innovation.
- Various external factors are affecting the product innovation, and business process innovation of FutureMed while operating the business. In this study, some external factors are considered i.e. industry maturity, customer needs and expectations, technological factors, intensity of competition, etc.
- Industry Maturity- The market of radiopharmaceutical products is matured as companies are competing based on the product differentiation and investing in the new product development. In the industry, companies are focusing more on the business process innovations rather than product innovation.
- Customer needs and expectations- The needs and demands of the customers in changing continuously. Innovation in the Company FutureMed is directly affected by consumers. There is active competition in radiopharmaceutical among the companies for the consumer market saturation. Companies have to meet the needs of the customers by enhancing the quality of products (Koper & Janoszka, 2014).
- Apart from these issues, company is facing issues due to various regulations in radiopharmaceutical industry. Company needs to register itself on Australian Register of Therapeutic Goods (ARTG) but it is not easy for the company to register successfully.
There are some more external factors that impact on the business and product innovation.
- Technology Advancement- New drugs, drug delivery systems, diagnostic methods and medical devices provide the opportunity of better treatment and of care that is disruptive, less costly and painful. For instance, implanted sensors are helpful in monitoring the disease of patients more effectively. But it is important to understand how and when to invest or adopt in the technology. If the technological infrastructure may not be placed on time then the time to gain competitive advantage will pass. So, technological factors affect the innovation process of FutureMed (Ettile, 2006).
- Suppliers-Suppliers have strong place that affect the innovation process in the company. Suppliers can impact on the product innovation due to level of price, quality, volume, components, delivery time, relevant raw material and more. In the pharmaceutical market, there are various attractive proposals from the companies for the suppliers and they switch to the companies according to them. High numbers of competitive suppliers enable the company to learn new ideas and impact on the innovation trends in the company.
- Competition- There is the strong competition among pharmaceutical companies. In order to compete in the market, FutureMed needs additional costs of research and experimental development for the innovation process. So, competition is considered as the continuous process affecting the innovation process of the company.
- Regulations-While operating the business in the country, FutureMed has to deal with various rules and regulations imposed by the Government of Australia. The government regulations undergo change adversely impact on the innovation. It is important for the company to understand the extensive network of regulations that may impact a particular innovation. Regulations impact on innovations as company can be punished for under ruling, and approving harmful drugs.
- Further, radiopharmaceutical is the new concept in the industry so there is less awareness among the people related to this concept. Further, it is difficult for the company to raise fund for the business innovation.
In order to deal with the external factors, there are some recommendations for the Company FutureMed.
- Company should clearly use of its resources in order to make the innovation successful. It should focus on developing new range of drugs and clinical service so that the customer base can be enhanced.
- To deal with the competition, company should make immediate patent of its products so that its product ideas can be secured at the significant level (Dominiquini & Loewe, 2006).
- To sustain the market share, company should undertake some significant measures. Company should focus on the product innovation by increasing its medicine lines.
- Intellectual property rights should be used in the innovation system of company. It will help in encouraging innovation and investment in innovation. It encourages the diffusion of information about the sources and principles of disruptive innovation throughout the economy.
- Company should follow the government rules strictly so that it can maintain a sustainable business position with all the regulations set by government in various countries (Pree and Louw, 2008).
There are various external influences which impact on the innovation process of the Company FutureMed based on marketing perspective. Those factors are as follows:
- Market dynamics- The key market dynamics of pharmaceutical company are market size, growth and segmentation. Due to changed market dynamics of pharmaceutical industry, new level of innovation is required today. Competition from low-priced companies, demands from various customers, changing government policies in terms of reimbursement, needs of emerging markets raising R&D cost and declining R&D productivity are affecting the ability of FutureMed to innovate and deliver the value.
- Competitors’ action- There is the strong competition in the market as there are various big players in the market like Pfizer and GlaxoSmithKlin that create tough competition for the other companies. Along with this, companies are providing low cost drugs to the patients. Thus it becomes necessary for FutureMed to innovate its products in order to say competitive in the market.
- Social and political changes- Policies of government have impact on the innovations as compared to other factors. In order to get attention from the companies because of increased economic presence, government provides various incentives to encourage the industry. For instance, GSK increase its operations in Singapore due to low taxes and government support. But in US, prices of drugs are high due to the lack of price control. Further, Rise of patients as consumers also impact on the innovation process of FutureMed.
- Economic environment- The pharmaceutical company FutureMed is also affected interest, taxes, exchange rates and inflation. Innovation in the marketing may affected due to high interest rates that discourages investment for FutureMed. Further, R&D is lengthy procedure that is economically affected in the industry.
- Limited participation in market research- It is observed that the company has limited participation in market research and R&D department has limited knowledge about the needs of target market. Company is basically targeting physicians and doctors.
- FutureMed should focus on the critical analysis of business environment in order to identify the strength and weakness of innovation process. Company should try to sustain human resources for the optimum use of resources in the innovation process.
- In order to deal with the competitors, company should continuously invest in innovation of medicines and drugs related to radiopharmaceuticals.
- Company FutureMed can diversify the political risk in order to make the innovation successful. Management should focus on the costs and benefits of diversification of material and resources (Teece, 2010).
- Company should hire skilled people in the R&D department for the successful innovation in business. Company can implement cost-effective strategy in order to stay competitive in the industry. Creating effective marketing team will also be helpful for the company to implement innovative strategies (Barreau, 2002).
Based on the technological perspectives, there are some factors that impact on the innovation process of FutureMed in the business. Those factors are described below:
- Advanced technologies- Companies in the pharmaceutical industries are affected by the rapid technological changes and shortening product life cycle and that create great opportunities for the innovation. These have to be taken into account when setting the marketing objectives by the company. With the advanced technology, FutureMed is able to provide new treatment options to the patients. Advanced automated machines have enhanced the output and reduced the cost.
- R&D Development- The new treatment options are research and developed successfully in the company due to technological advancements. Patients and other customers are expecting a lot more as compared to the past and this drive to the innovation process in the business. Company has ability to make profits and recoup on the investments based on the research and developments (Chesbrough 2003).
- Value chain- There are various new technologies available in the pharmaceutical industry driving the innovation process. Those are radio technology, advanced weighing technology, social media revolution, transport management software, and data analytics. New drugs and delivery systems are now more innovative.
- Company needs to implement the communication mediums in order to communicate with doctors and physicians so that their needs can be identified.
There is some technological advancement that can be used by FutureMed in the innovation process.
- Company can develop electronic health record that is helpful in recording the information of patients. Integrating this system with one platform will allow more integrated and effective care of pateints.
- Now, patients are active player in their own healthcare so, FutureMed should use portal technology to access their medical records and interact online with them.
- Further, company can also use real time locating services in order to identify the problem areas quickly. This tool provides the opportunity for the last minute changes.
- Healthcare trackers and sensors is another way to collect data that can be used by FutureMed as an innovative tool.
Thus, there are various factors that impact on the innovation practices of FutureMed. Technology factors have an important role in order to implement new and innovative practices. Further, business expansion is considered as an effective strategy for innovation process. Along with this, company can also adopt new business model and organizational structure for the disruptive innovation. Disruptive innovation has a crucial role for the radiopharmaceutical industry as it can help in creative new networks and new products. It drives competitive advantage to the industry.
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