Analyzing Innovation related Risks and Impacts

RETAIL PROJECT
INTERGENERATIONAL COLLABORATIVE
TRAINING PACKAGE
Analyzing Innovation related Risks and Impacts

Project funded by:
Erasmus+ / Key Action 2 -
Cooperation for innovation and
the exchange of good
Strategic Partnerships for VET
education
Erasmus+
Retail Project www.retail.erasmus.site
The European Commission's support for the production of this publication does not constitute an endorsement of the contents,
which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of
the information contained therein.
RETAIL PROJECT

1. Introduction to the topic
2. Learning Objectives
3. Learning Contents
Chapter 1: Why innovation is so important?
Chapter 2: Risk and impact of innovation
Chapter 3: Innovation strategies
Chapter 4: How to analyse innovation?
4. Practical Activity
5. Useful Tools
6. Sources
RETAIL PROJECT

O3-A1: Intergenerational approach and collaborative training guidelines
As a first step partners will develop the methodology for an intergenerational approach as chosen to
deliver the training. The aim of this output is to create long term relationships between an
entrepreneur, responsible for running a retail business and a youth, who will help them introduce
sustainable changes to the business. In order to reach this objective, a framework for the
collaboration will be developed. The relationship will be be voluntary and included as such in the
framework but encouraged in order to maximise participation in the training activity and further
apprenticeship programmes. Partners will explore existing suitable frameworks that can be used in
the RETAIL project. In addition, partners will seek involvement of relevant networks to increase the
project scope. For instance, DCC is a member of the Enterprise Europe Network with EASME
actively encouraging members to collaborate and engage with all relevant EU projects. Partner will
also explore other relevant programmes such as mobility programmes (Erasmus+, Erasmus for
young entrepreneurs), etc. From this work, a methodological report will be issued.
1
INTRODUCTION
TO THE TOPIC New businesses in Retail are increasingly looking for
innovative and customised solutions to emerge from
their competitors and gain customers for their
business. Unfortunately, many of them fail to do so.
To enter with your business idea, you need to
understand how important innovation is and how to
analyse the risk of innovation. This will enable you to
respond better to all the obstacles that arise.
This module will show you what to pay attention to
when analysing innovation and the associated risks
and impacts.

2
LEARNING
OBJECTIVES
In this module, retailers and
youth will learn to:
• Identify types of innovations;
• Understand why innovation is important;
• Identify places where to look for innovation;
• Identify barriers of innovation;
• Understand risk of innovation;
• Master risk analysis;
• Identify impact of innovation;
• Understand Blue Ocean Strategy.

3
LEARNING
CONTENTS
This module will be divided into 4 training
chapters, a practical activity, and references to
go further
CHAPTER 1
Why innovation is so important
CHAPTER 2
Risk of innovation
CHAPTER 3
Innovation strategies
CHAPTER 4
How to analyse innovation

3.1 Why innovation
is so important?
CHAPTER 1
Innovation is the driving force behind both your
business and the reason why civilisation is constantly
developing and people can benefit from solutions
that make their work easier and support their quality
of life.
Cambridge Dictionary defines innovation as:
„(the use of) a new idea or method”
When referring to the RETAIL market, we can talk
about innovation when, for example, we introduce
new better products, new sales models, improve
customer service through the introduction of
technology, etc.
WHAT IS INNOVATION?
CONTENT OF CHAPTER 1
What is innovation?
Types of innovation
Why innovation is important?
Where to look for innovations

3.1 Why innovation
is so important?
What is innovation?
Types of innovation
CHAPTER 1
Innovation can take many forms. Here are presented
some areas in which you can look for innovation for
your business:
• Product/Service Innovation
If you sell products that you made yourself, you can
look for new solutions to meet the expectations of
your customers. This can mean improving existing
products or developing new ones.
Types of innovation
Icon made by Freepik from
Flaticon.com

3.1 Why innovation
is so important?
What is innovation?
Types of innovation
CHAPTER 1
• Process innovation
Innovation in the process mainly focuses on
introducing new methods, for example, product
distribution, but can also involve a change of work or
human resources. Their aim is to make business more
efficient in its operation.
Types of innovation
Flaticon.com

3.1 Why innovation
is so important?
What is innovation?
Types of innovation
CHAPTER 1
• Business model innovation
This is a type of innovation that is much more
complex than the previous two types. It changes the
process of delivering value to customers. In the Retail
sector, for example, it may involve a change of
business from a stationary shop to online trading.
Types of innovation
Flaticon.com

3.1 Why innovation
is so important?
What is innovation?
Types of innovation
CHAPTER 1
Why innovation is
important?
The innovation of your business is one of the most
important methods to gain a competitive advantage,
to attract customers or, in a broader sense, to
introduce some good solutions locally/globally (for
example, those in the field of ecology and sustainable
development).
Innovation can also be a requirement to stay in an
uncertain market.
Innovation
ideas
Innovation
develop Value

3.1 Why innovation
is so important?
What is innovation?
Types of innovation
CHAPTER 1
Where to look for
innovations
Constant improvement of your business, also by
exploring innovative solutions, is definitely a difficult
task. However, there are several ways that can help
you get inspired, for example:
• Ask customers – it can be done by a simple
questionnaire / interview;
• Observe customers – observing customers can
give you a lot to think about. You can watch your
customers' activity both in the physical shop and
online (for example by usying mouse recorder);
• Eliminate/Add – consider what you can eliminate
or add to your business / product / service to
increase customer experience;
• What if? – create different scenarios and look for
interesting and surprising solutions.

3.2 Risk and impact
of innovation
CHAPTER 2
Risk of innovation
The risk is integrated part of innovation. However, a
lot depends on how you run your business and what
decisions you make.
Different risks may occur depending on what stage
you are at with your business and what type of
innovation you plan to implement:
• Incremental innovation
will be less risky and will generally have a long
duration;
• Radical innovation
innovations that completely change the way business
operates.
Risk of innovation
Innovation barriers
How to deal with barriers
Risk analysis

3.2 Risk and impact
of innovation
CHAPTER 2
Innovation barriers
When talking about the risk of innovation, we cannot
overlook the barriers. They are risk-related and can be
a source of failure, especially for young businesses.
Among other things, we can mention:
Financial barriers
Technological barriers
Lack of strategy
Lack of knowledge
Risk of innovation
Innovation barriers
Risk analysis
Icons made by Freepik from Flaticon.com

3.2 Risk and impact
of innovation
CHAPTER 2
Depending on which barriers occur in your situation,
you may react differently.
There are several things you can always try:
Academic Business Incubators – you can look for help
in the field of consulting;
Business Angels – you can contact them for financial
support and guidelines;
EU funds – you may receive funding to implement
innovative initiatives;
Internet – is still an excellent source of information as
long as you know how to use it;
Online training – there is an increasing number of
different training courses and workshops, often free of
charge, which can help you to learn how to run a
business;
Crowdfunding – helps to get funding for the idea.
Risk of innovation
Innovation barriers
Risk analysis

3.2 Risk and impact
of innovation
CHAPTER 2
Risk analysis
To analyse the risk of innovation, you can use
templates like this:
•Here you have a choice of
fundamentally 5 techniques
that you can assign to each
of the risks, i.e:
•Avoidance
•Retention
•Sharing
•Transferring
•Loss prevention and
reduction
•This part includes risk
controlling and
monitoring. You must
establish the methods
by which you will check
and monitor the risk.
•Here you have to
assess the risks. You
can do so, for example,
by assessing the
possibility of risk and
making an estimate of
what losses it may
cause.
•Here you have to
identify possible risks. It
is good to group them
into relevant categories
Risk
identification
Risk
evaluation
Risk handing
Risk
controlling
Risk of innovation
Innovation barriers
Risk analysis

3.3 Innovation
strategies
CHAPTER 3
What is the impact of innovation?
Is your product/service innovative?
Blue Ocean Strategy
What is the impact of
innovation?
Nowadays, innovation is often one of the most
wanted characteristics in business. Your retail
operation can be unique in terms of innovation in
many fields, such as:
- Innovative customer service;
- Innovative product;
- Use of the latest technology such as AR or AI.
Innovations will allow to attract customers and stand
out from the crowd of other businesses. Innovation
can also result from respecting specific values.
For 83% of the Millennials it is important that the
company where they buy shares their values and 71%
of them are able to pay more for the product if part
of this money goes to charity [source: 5W PR 2020
REPORT].

3.3 Innovation
strategies
CHAPTER 3
Is your product/service
innovative?
Blue Ocean Strategy
Icon made by katemangostar from Flaticon.com
Try to answer the following questions, which may help
you find out if your offer is innovative.
1. Is it relevant for your costumers?
2. What problem it solving?
3. In what ways is it unique?
4. Is it ethic and value for society?
5. Does it have value for customers to pay for it?
6. Does it fit with your mission and vision?

3.3 Innovation
strategies
CHAPTER 3
Blue Ocean Strategy
The Blue Ocean strategy is based on creating your
own new market instead of competing with other
companies and their products. This is a very
interesting strategy that allows you to adapt your
products to a narrower but not yet developed market.
An example of the Blue Ocean
Strategy is the release of
toothpaste for children. They
extracted part of the market
and reduced the number of
customers, yet it was a very
good idea.
The producers then created a
new market for their product. Icon made by Freepik from Flaticon.com
Blue Ocean Strategy

3.3 Innovation
strategies
CHAPTER 3
Blue Ocean strategy
In your search for innovation, this scheme can help you
BLUE
OCEAN
RAISE
REDUCE
ELIMINATE
CREATE
Raise some of the factors beyond the standards in the sector
Create new values for customers
Eliminate the factors that are considered to be a certainty in your sector
Reduce some of the factors below standard in your sector
Blue Ocean Strategy

3.4 How to
analyse
innovation
CHAPTER 4
Is it innovative?
To assess innovation, the first thing you need to do is
to check if your product is really innovative (see slide
18).
If it is, then the next steps you have to take are to
consider what benefits it will bring to you and your
business and what risks you are exposed to by
introducing it.
Remember to be open to changes to your original
idea. Sometimes authors "fall in love" with their ideas
and do not want to apply any changes to them, even
though they could come up with something even
more innovative and creative.
Is it innovative?
Innovation analysis – risks identification
Innovation analysis – risk matrix

3.4 How to
analyse
innovation
CHAPTER 4
Innovation analysis – risks
identification
You can use the table for a risk analysis considering
what was previously presented in the graph in
Chapter 2 (see slide: 12).
Risk
Identification
Risk evaluation Risk
Handing
Risk
Controlling
Probability Impact
Lack of
technology
1 6 Transfer Audit
Underestimating
costs
3 8 Reduction Monitoring of the
budget
Lack of buyers 4 10 Reduction Monitoring sales
and customer
satisfaction
Is it innovative?

3.4 How to
analyse
innovation
CHAPTER 4
Innovation analysis – risk
matrix
When analysing the risks, for example, of introducing
an innovative product, try to assess always the
probability of occurrence and the impact it may have.
You can use this table to better illustrate the situation.
Medium High Very high
Low Medium High
Very Low Low Medium
Probability Impact
Is it innovative?

3.4 How to
analyse
innovation
CHAPTER 4
Innovation analysis –
risk matrix
You can now put on the table previous risk to better
see what you should be careful of. By applying this
analysis you will know what risks you need to pay
attention to because they have the biggest impact.
• Lack of
buyers
• Lack of
technology
• Underestim
ating costs
Probability Impact
Is it innovative?

4. PRACTICAL ACTIVITY
Try to evaluate your business idea for Retail and evaluate it through the prism of innovation and risk.
Probability
Impact
Exercise 1. Evaluate innovation by answering questions:
1. Is it relevant for your costumers?
2. What problem it solving?
3. In what ways is it unique?
4. Is it ethic and value for society?
5. Does it have value for customers to pay for it?
6. Does it fit with your mission and vision?
Exercise 2. Assess the risks of innovation and try to suggest solutions:
Risk
Identification
Risk evaluation Risk
Handing
Risk
Controlling
Probability Impact
Exercise 3. Fill in the table

5. USEFUL TOOLS
Learn more about Innovation Strategy
Link: https://hbr.org/2015/06/you-need-an-innovation-
strategy
Hot to use risk matrix
Link: https://www.youtube.com/watch?v=-E-jfcoR2W0
Find templates for your risk assessments
Link: https://www.smartsheet.com/all-risk-assessment-matrix-
templates-you-need
Types of innovations
https://www.viima.com/blog/types-of-innovation

6. SOURCES
K. Miller, „3 TYPES OF INNOVATION CHANGING THE FUTURE OF BUSINESS”
Link: https://www.northeastern.edu/graduate/blog/types-of-innovation/
N. Lavanya, | T. Malarvizhi, „Risk analysis and management a vital key to effective
project management”
Link: https://www.pmi.org/learning/library/risk-analysis-project-management-7070
CONSUMER CULTURE [5W PR 2020 REPORT]
Link: https://www.5wpr.com/new/research/5wpr-2020-consumer-culture-report/
T. Eschberger, „10 criteria that make product innovation successful”
Link: https://www.lead-innovation.com/english-blog/criteria-product-innovation-
successful
O. Chowdhury, „What is Blue Ocean Strategy? Examples, Pros & Cons!”
https://tradebrains.in/blue-ocean-strategy/#Examples_of_Blue_Ocean_Industry

PARTNERSHIP
Retail Project www.retail.erasmus.site
The European Commission's support for the production of this publication does not constitute an endorsement of the contents,
which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of
the information contained therein.
RETAIL PROJECT

Analyzing Innovation related Risks and Impacts

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