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Innovation A Tool for Growth.pdf

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Innovation A Tool for Growth.pdf

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Businesses that fail to innovate run the risk of losing ground to competitors, losing key staff, or simply operating inefficiently. Innovation can be a key differentiator between market leaders and their rivals.

Businesses that fail to innovate run the risk of losing ground to competitors, losing key staff, or simply operating inefficiently. Innovation can be a key differentiator between market leaders and their rivals.

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Innovation A Tool for Growth.pdf

  1. 1. What is innovation? “Innovation is significant positive change” Innovation is the process through which economic and social value is extracted from knowledge through the generation, development, and implementation of ideas to produce new or improved strategies, capabilities, products, services, or processes which benefits customer, organization and the society” Innovation is a new idea, device or process. Innovation can be viewed as the application of better solutions that meet the new requirement, existing market needs. This is accomplished through more effective products, process, services, technologies and ideas. True innovation is an ever evolving process, the product of unfenced thinking and hard work. Types of Innovation: Innovation can be broadly classified as follows i. Incremental Innovation ii. Radical Innovation Incremental Innovation: Incremental innovation focuses on making modest improvements to existing processes, products or services. This could be anything from tightening up an existing workflow by automating some of the process, to improving our process in order to make self- service easier, thus reducing the number of customers coming to us through more costly and time-consuming channels. Incremental innovation seeks to improve the systems that already exist, making them better, faster cheaper. It includes the improvements in functional characteristics, technical abilities or ease of use. Radical Innovation: Radical innovation involves creating a completely new process or product in response to a market need or opportunity. Radical innovations tend to come about as a result of careful research and development into a specific issue or problem, and frequently make use of new technology to solve them. These kinds of innovations are often seen as 'breakthrough' innovations, some of which can change the entire way an organization operates and, on occasion, can result in a new product or service that impacts an entire market sector.
  2. 2. Radical innovations provide something new to the world that we live in by uprooting industry conventions and by significantly changing customer expectations in a positive way. Ultimately, they often end up replacing existing methods / technologies. It is the complete process of bringing a new product or services to the market. It includes the two parallel paths as follows. • Idea generation, product design and detail engineering. • Market research and market analysis Disruptive Innovation: A disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology. The best approach can be to combine radical and incremental innovation. An example of this would be to develop a totally new process to produce and manage an existing product or service. Developing an idea to bundle several products together is also innovation. This could involve anything from outsourcing part of your manufacturing process, which was previously done in-house, to moving your IT system onto a more flexible platform, such as cloud computing. Need for Innovation Businesses that fail to innovate run the risk of losing ground to competitors, losing key staff, or simply operating inefficiently. Innovation can be a key differentiator between market leaders and their rivals. Make the most of what you already have: Innovation is not only about designing a new product or service to sell, but can also focus on existing business processes and practices to improve efficiency, find new customers, cut down on waste and increase profits. Constantly innovating and improving business practices is also likely to help us attract better staff members and retain more of our existing staff - something which is crucial to the long-term health and performance of our business.
  3. 3. Responding to trends and competition: Innovation can help us to discover what opportunities exist now, or are likely to emerge in the future. Successful businesses not only respond to their current customer or organisational needs, but often anticipate future trends and develop an idea, product or service that allows us to meet the future demand rapidly and effectively. Innovation will help us stay ahead of our competition as markets, technologies or trends shift. Developing a unique selling point: Consumers often see innovation as something that adds value to a company or to its products. Used properly, innovation can give us a commercial advantage - especially in saturated or rapidly shifting markets. Our customers may even be willing to pay more for our well-designed, novel and innovative product or service, rather than choosing a cheaper, but less exciting rival. Increasing Global Trade, Opening the Door to More Competitors from Every Region The Rapid Distribution of Information and Education Reduced Cost of Entry into Markets and Industries Nature of Innovation Product or Service Innovation: The development of new products/services, changes in design of established products/services, or use of new materials or components in the manufacture of established products. Service Innovation can be defined as “a new or considerably changed service concept, client interaction channel, service delivery system or technological concept that individually, but most likely in combination, leads to one or more (re)new(ed) service functions that are new to the firm. The development and market introduction of a new, redesigned or substantially improved product or service. Examples of product innovation by a business might include a new product's
  4. 4. invention, technical specification and quality improvements made to a product, or the inclusion of new components, materials or desirable functions into an existing product. Process Innovation: A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software. Business Model Innovation:

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