Chapter 9 (Business Innovation)

Innovation: is about creating something new, and improving existing systems, products and processes. It can be a radical change or change built from incremental improvements.

An outcome of innovation is the continuous improvement of products, processes and systems. This involves building on good practice and identifying ways to keep getting better. Innovation can be based around process and/or product.

Innovation can lead to:

  • improved economic outcomes
  • survival and growth
  • increased employment
  • increased exports
  • improved skills in the workforce
  • new ways of working such as virtual work groups
  • better management of environmental impact

Sources of ideas for innovation:

  • competitor analysis
  • sales and cost data
  • feedback and ideas from staff
  • feedback from suppliers
  • market research
  • production and quality data
  • customer motivations and preferences
  • feedback from customers

Process innovation: changing and improving how a business operates and/or manufactures, distributes and markets its products and services. An emerging process innovation is cloud computing. Companies are using it to increase efficiency and reduce costs.

Product innovation: changing and improving the features, materials or functions of a product or service.

Benefits of innovation:

  • Financial gain
  • Expansion of global market presence
  • Increased market share

 

An innovation has to work, can be commercialisedintegrated into a product or service and generate income.

Factors that affect innovation success:

  • Timing
  • Cost
  • Marketing strategy
  • Technology
    • Managers of technology must be able to:
      • manage and analyse information
      • generate ideas
      • realise ideas
      • protect the technology

Intellectual property protection

A company is more likely to benefit from an innovation if they can prevent competitors from using it too. An innovative product design, manufacturing technology or improvements made to features or packaging may result in increased sales, a new market or increased profit through lower costs.

Protecting the design through a patent, copyright or a registered design will stop competitors from making and launching their own versions and benefiting from the time and money another company invested in the innovation.