Invention can be defined as a new scientific or technical idea that can be accomplished or implemented at an economical cost. Invention leads to the production of something that did not exist before, that is, it is an act of discovering something new. Innovation on the other hand is an idea of modifying something to make it better. Therefore, innovation helps in transforming an idea or invention into a solution, which in turn adds more value in terms of the users or customers’ perspective (Gaynor 2012). Thus, innovation and invention have different values since, invention leads to the creation of a new product while innovation improvises an already existing idea or service and adding value into it (Grasty 2012). Innovation is quite significant in oil and gas industry as it has great impact in this industry. Extraction of fossil fuels from the places, which are not easily accessible, has been possible only due to the implementation of technological innovation in this industry. Innovation that can be implemented to achieve growth in oil and gas industry and the different models of innovation are discussed in the following paragraphs.
Innovation in growth of oil and gas firm
Oil is a non-renewable energy resource. A non-renewable resource is a natural resource that cannot be readily replaced by nature (Tugcu, Ozturk and Aslan 2012). Nature is the only source of oil and gas, which are readily depleting since the rate of consumption of these recourses are very high. Innovation is necessary in oil and gas firm to reduce the extraction cost of the raw fuel. Oil and gas firms are improvising the techniques of the raw oil extraction in order to extract the crude oil from places, which are difficult to access. Technological innovation plays a major role in the supply chain management of the oil and Gas. Technological innovation includes new products and processes with significant technological changes.
Strategic Innovation and its seven dimension
Strategic innovation is a process of redesigning and modifying the already existing methods or strategies to yield a better result and gain a competitive advantage (Yusuf et al. 2014). Strategic Innovation is necessary to adapt to the changing trends. The seven dimension of strategic innovation are as follows-
Managed Innovation Process
Managed Innovation process is the first dimension of strategic innovation. It deals with managing the innovation process from beginning to the end of its implementation. This innovation process is important to identify the advantages and disadvantages, pros and cons of implementing the innovation in a business (Damanpour and Aravind 2012). Hence, a thorough research about the market trends and customers is carried out in this strategic innovation process. This also enables to explore the various other fields in innovation, which includes, working with external partners and communicating with the customers. Thus by managing the innovation and searching beyond what is already present, it is possible to influence the organizations to explore new possibilities.
Strategic Alignment is another dimension of the strategic innovation. It enables a firm to arrange support for implementing a new innovative idea. Strategic alignment is necessary to establish the support between the stakeholders to ensure that they are focusing on the same goal. In order to implement an innovation it is essential for the oil and gas firm to engage the stakeholders in an appropriate ways and suitable frequency. The oil and gas firm has to use the strategic alignment to assign the roles and responsibilities in different departments who will be working with the innovation idea. Strategic alignment also focuses on selecting a cross functional team, team leaders to implement the innovative idea successfully. Strategic alignment is used select the proper candidates for the leadership team (Acur, Kandemir and Boer 2012).
Industry foresight is one of the primary dimension of the strategic innovation as it deals with the people’s (within the organization) perspective about the changing and the new trends in the industry. This dimension of strategic innovation researches the success rate of the previous innovations in the market, which in turn helps in improving the innovation process in order to achieve success in the market. A thorough industry foresight enables a firm to plan the implementation of the innovation keeping in mind, the previous success and failure rates. It also helps to identify the new dimension, perspective and challenges that the firm might face while implementing the innovation. Industry foresight is necessary for achieving competitive advantages and customer recognition in the market.
The idea of enabling consumer Insight in the process of Innovation helps the organization to understand the needs of the consumers. Therefore, Consumer Insight is one of the most important dimensions of strategic innovation. Consumer insight helps in innovation of product, keeping in mind the consumers’ need. This in turn increases the popularity of the product among the consumers. Considering this dimension is very important in implementing strategic innovation as it helps in understanding the behavior, perception and the needs of the consumers. Considering this dimension will help the firm to develop better product according to the market demand. Consumers’ point of view should be involved in the innovation process, as they are the ones who would be using the product. It helps in increasing the consumers’ demand, which in turn helps the firm to increase their market value (Simon and Honore 2012). However, consumer insight not only deals with the end users’ perspective but also considers the perspective of stakeholders such as, investors, suppliers, business partners and employees.
Core Technology and Competencies
This dimension of strategic innovation is very important to analyze the core technology that would be required to implement the innovation process effectively. This would unveil the strength and weakness of the firm, which helps in enhancing the innovation process. Technology plays a very important role in strategic innovation as it helps the firm to achieve competitive advantage in the market (Baden-Fuller and Haefliger 2013). Moreover, having knowledge of core technology and competencies helps in identifying the weakness of the firm, which will be very helpful in implementing the innovation process. The knowledge of the strength and weakness of the firm helps in building a long-term relationship with the stakeholders as well.
In order to implement an innovation of the product, a firm’s readiness is very essential. In improves the ability of a firm implement any new idea. It also helps in increasing the power of a firm with respect to operational, cultural and political demands while implementing the innovation process. Apart from organizational readiness, a firm should also consider the operational, structural and cultural readiness in order to implement the strategic innovation successfully. This helps the firm to implement the innovation according to the cultural and operational capabilities of the firm. Organizational readiness helps the firm in implementing new idea quickly and in an organized way (Nordin 2012). This increases the market value of the product a well. Organizational readiness helps to allocate proper resources to the qualified staff of the firm, thus increasing the innovation capabilities of the firm (Vakola 2014).
Proper implementation of an innovation involves a wide range of activities that has to be carried out in a disciplined manner for a successful implementation of strategic innovation. The activities include, planning, prototype designing, testing (both qualitative and quantitative) and establishing the feedback for improving the innovation process. This dimension of strategic innovation has various elements such as a formal approach of project implementation and understanding the priority of the organization. Disciplined implementation also helps in effective management of the implementation of the innovation (Labatut, Aggeri and Girard 2012).
Strategic Innovation in Oil and Gas Firm
While implementation of Strategic Innovation in Oil and gas firm, the seven dimension of strategic innovation plays a vital role in the successful implementation of the innovation.
Managed Innovation process is necessary to for a successful implementation of strategic innovation in the oil and gas industry, because however small or big the oil firm be, it is very essential to have clear strategy of implementing the innovation. After gathering the clear strategy of innovation, it is essential for the firm to manage and schedule the tasks related to innovation accordingly or else, faster competitors may grab the opportunity to develop a more innovative product (Davila, Epstein and Shelton 2012).
Strategic alignment helps in plan the process of innovation keeping in mind the performance of the product, brand and consumers’ engagement. Maintaining the good performance of the product is very essential in oil and gas firm to gain the competitive advantages in the market (Porter and Heppelmann 2014).
Having a clear industry foresight is very essential for oil and gas firm. Oil and gas companies are very successful because the product has very huge demand in the market. Likewise, many oil and gas firm is trying to fulfill the increasing demand for the product. This results in changing and innovation of the product at a rapid rate. In order to match the fast pace and implement a successful and new innovation, Oil and Gas firm should have a clear industry foresight, which unveils the strength and weakness of the industry and the latest trend (Mitchell, Marcel and Mitchell 2012).
Innovation of product in oil and gas firm is implemented in order to fulfill the consumers’ need and expectation from a particular firm or a company. Therefore, it becomes utmost essential to enable customer insight in an implementation. Since the consumers will be using the product, it is essential to keep in mind their needs and reframe the innovation process accordingly. In oil and gas industry, there is a lot of competition, since this market is growing incredibly. Therefore, it is a good idea to implement the innovation by focusing on the consumers (Ngo and O'cass 2013).
Technology plays a very important role in oil and gas firm. Extraction of fossil fuels in Inaccessible geographical areas has been possible only because of the technology. Furthermore, the resources like bituminous sands and gas shale, which was considered as very expensive to access, now finds a good place in the market just because of the application of right technology. Oil recovery has shown a steady increase over the years with the advancement of technology. Every oil and gas firm is implementing various technological solutions to make the fuel extraction process easier to gain more profit. Hence, in oil and gas firm, this element of strategic innovation plays a major role in successfully implementing the innovation (Baden-Fuller and Haefliger 2013).
Competition among the oil and gas firm are very high. In order to achieve a successful strategic innovation in the product, it is very essential for the firm to have an organizational readiness to accept the challenge that the firm might have to face while implementing the innovation process. Having a new idea does not imply a successful innovation. The new idea has to be implemented in time to achieve the success. Organizational readiness helps the oil and gas firm to implement the new idea readily and quickly (Shea et al. 2014).
Strategic innovation requires a planned implementation of the strategies for a successful innovation. Oil and gas firm have ample of product possibilities, hence it becomes essential to plan the implementation of innovation in a disciplined way and maintain that throughout the implementation.
From the above discussion, it can be concluded that, innovation as a striking dissimilarity from invention. Innovation deals with modifying an already existing idea to improve the product. Innovation plays a vital role in oil and gas firm to maintain its value in the market place. Innovation becomes necessary for oil and gas firm to thrive in an extremely competitive environment. Seven dimensions of strategic innovation hold good in strategic innovation process. Innovation in oil and gas industry does not necessarily apply to the increase in production. It ascertains that operations runs safely and remain in the top position. Innovation in oil and gas firm may include monitoring the integrity of the components in changing and thriving in the competitive environment. Finding the right partners and estimating the challenge is a difficult task in strategic innovation. Industry foresight helps to deal with this situation. The correct implement of all the seven dimension of strategic innovation helps successful implementation of an innovation. Successful innovation does not always need smart people but it needs smart implementation; for this, it is essential to have an organizational readiness in successful implementation of the strategic innovation. All the seven dimension of strategic innovation can help an oil and gas firm in successful innovation of their product, procedures and the services they provide to the customers. Successful implementation of the entire seven dimensions in strategic innovation helps the oil and gas firm to achieve a competitive advantage in the market. Apart from these, the dimension helps the oil and gas firm to generate new innovative idea to achieve further success in the market. Thus, it can be said that, implementation of strategic innovation and its frameworks helps the oil and gas firm to involve a disciplined approach towards innovation and significantly helps it to generate effective platform for a sustainable and profitable innovation.
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