Definition Of Innovation And Its Importance Business Essay Example

market performance and the introduction of new products. In contrast, innovation involves exploring fresh ideas and creativity as part of the overall process, ultimately leading to new products, procedures, or services. Exceptional organizational performance signifies operational excellence overall, while new product innovation enables capturing and retaining market share as well as increasing profitability amidst competition. This text emphasizes the significance not only of generating new ideas but also implementing them into production or management systems for successful innovation.
The text highlights the impact of innovation on opening new markets, introducing novel products and methods, and adapting management systems. It emphasizes how innovation affects both individual companies and a country's economic growth. It discusses the opportunities for companies in China due to its rapid economic development and abundance of labor and natural resources. The text stresses the need for firms to adopt appropriate strategies and modify their management approach when entering the Chinese market. Additionally, it emphasizes the importance of innovation as a means of achieving technical effectiveness by successfully developing new ideas. Continuous improvement in research and development is also emphasized as a way to enhance product quality and productivity through innovative ideas for new products/services or management systems. The text acknowledges that innovation involves transformative changes in people's lives, work, and play beyond just products or solutions. It recognizes incremental innovation as an ongoing process of improving quality and productivity through small advancements in various technologies, using examples like the telephone and electric lighting that rely on gradual improvements in associated technologies such as glass blowing and vacuum pumping.A study conducted by Temple University emphasizes the critical role of incremental invention in continuously discovering pharmaceuticals.

In the field of pharmacology, a majority of clinically significant drugs have been developed through multiple small trials and consecutive improvements over the past 50 years. This approach, known as incremental invention, is favored by the pharmaceutical industry due to its advantages over radical innovation. Incremental innovations involve making gradual improvements to existing products or procedures, which are considered most drugs. On the other hand, radical innovation involves completely changing our thinking and usage of products or developing new ones compared to previous iterations. It focuses on exploring new technology and creating new opportunities in challenging circumstances. Radical innovation has a widespread impact on our lives and is carried out by various individuals and organizations through a gradual accumulation of small improvements. Therefore, extremist invention involves incremental invention to an existing merchandise or procedure system. Even seemingly minor improvements can greatly impact an organization by transforming an existing market or creating new products or services. There are four types of invention: merchandise invention (offering new products/services), procedure invention (improving processes), place invention (changing physical locations), and paradigm invention (shifting underlying principles).Both incremental and radical innovations are crucial in advancing industries like pharmacology and bringing about meaningful changes in our lives. To stay ahead in the market, organizations must continuously improve their existing products or introduce new ones. However, this can also be a threat as competitors may do the same. Therefore, organizations need to respond by introducing new products or services.

For example, Starbucks created a new segment in the ready-to-drink coffee market when it launched Iced Coffee in 2006. By being innovative before its competitors, Starbucks was able to provide value for customers and achieve

superior profits, gaining a competitive advantage. Their advanced merchandise offerings like Frappuccino coffee introduced in 1996 and Double Shot Espresso drink introduced in 2002 further contribute to enhancing the brand's reputation for innovation.

Apple also demonstrates innovation through combining features in its small iPod NANO referred to as the Watch. Procedure innovation refers to improving production methods which reduces supply costs. An example of this is computer manufacturing reducing labor time and prices by minimizing steps involved over years of production [Business Wire, 2006;Mintel 2011]. Process innovation can have a significant impact on production costs and sales prices. It is important for organizations to approach invention and growth systematically rather than relying on random ideas.Dell's competitors were not prepared for the success of this innovation, which enabled Dell to increase its market share by surpassing sales figures.
Apple showcases innovation in both its products and processes, fostering creativity among employees and promoting bold thinking. The text emphasizes Apple's success as a technology company and its ability to take advantage of new opportunities by leveraging its ecosystem and innovative processes. It also highlights the importance of positioning innovation in identifying target markets and consumers.
Starbucks serves as an example of how perception can greatly impact a product.
The upcoming release of Sony's Play Station phone is seen as a significant development in the smartphone market that has the potential to attract gamers. Utilizing the Sony brand could help differentiate their range of products and improve their position in the market.
Lastly, the text briefly mentions paradigm innovation as a creative or innovative approach to entering new markets with new products. The text discusses the distinction between product and process innovation in

the Innovation Life Cycle.
LG's Optimums 2x, scheduled for release in March 2010, is being hailed as the world's first dual-core humanoid-operated smartphone, offering faster mobile internet speeds. This appeals to sophisticated mobile users interested in streaming sports and TV shows live [Mintel 2011].The Swiss Watch industry illustrates this concept as it transitions from mechanical to digital timepieces and positions its watches as luxury goods [Barney & Clark, 2007]. In today's globalized knowledge-based economy, competitive advantage stems from unique capabilities and the ability to innovate. Companies compete not only in the product market space but also for resources that support their product market strategy. Acquiring or developing necessary resources allows firms to gain an edge over their closest competitors [Peteraf and Barney, 2003]. According to Wernerfelt (1984), competition among companies based on resource profiles affects their ability to implement successful product market strategies. The resource-based view theory suggests that organizations can achieve a competitive advantage by offering superior goods, services, or products compared to their rivals through innovative ideas (Barney & Clark, 2007, p25). To establish this advantage, a firm must possess resources and capabilities that surpass its competitors and utilize these resources with innovative ideas to generate more value. Without high-quality resources, rivals can easily replicate the firm's actions and negate any advantage. Organizations must strive for superior differentiation and/or lower costs in order to reap greater benefits.Since the 1990s, intangible resources such as brand reputation and knowledge/skills have become crucial drivers of innovation. These resources accumulate over time and contribute significantly to innovation when utilized effectively. Utilizing Slack resources can greatly enhance innovation. One aspect of innovation is developing new products which can involve

expanding on existing concepts in new ways or creating entirely new categories.

Successfully identifying and launching new products is essential for company growth and success. Many organizations have thrived and expanded by focusing on developing new products and processes, relying on innovative ideas and necessary resources. Skype is a prime example of a company excelling in this area through continuous development and launch of new products.

Skype offers features such as desktop sharing, conferencing abilities, premium quality audio/video services that surpass competitors. This allows professionals to conveniently communicate face-to-face with multiple individuals simultaneously regardless of location. Skype has revolutionized communication for people not in the same country or city to connect and interact.

The demand for group meetings and conference calls has increased as more people work remotely or engage in distance learning.Skype provides conference call capabilities, allowing communication with multiple individuals simultaneously. This service is free for all participants if they use Skype.

PESTLE analysis examines environmental changes, including political, economic, societal, and technological factors.

In dynamic environments, organizations must enhance their ability to innovate discontinuously in order to adapt to these changes. Political alterations such as government policies or laws can influence these changes and impact organizations.

Government policies, legislation, and foreign influences (such as those from the WTO) can have an effect on businesses. For example, improvements in employment laws like wage and working hour limitations can benefit low-paid workers and improve their understanding of their rights at work.

Changes in immigration policy in the UK can have both positive and negative consequences for UK businesses and the economy.

The economic aspect involves shifts in the broader economic system. A dynamic market economy cannot always maintain balance due to changes

in various economic factors. As people's living standards improve, there is an increase in demand for products and services. This leads to a growing need for new high-quality products or services, resulting in competition between different organizations or brands.

Social changes are linked to broader societal shifts such as lifestyle adjustments and changes in consumer behavior.The surge in remote work using computers for communication has brought about a significant societal shift. Traditional work patterns have been transformed, leading to a reduced need for office spaces and transportation as more individuals now rely on rail, coach, or private cars for commuting. Primark's success can be attributed to its efficient sourcing of clothes with popular designs that meet customers' needs. Moreover, Primark is committed to ethically selling these clothes at affordable prices [Primark, N.D].

Technological:

Technological advancements play a crucial role in organizations' efforts to invent and improve. These advancements enhance management and facilitate the development of high-tech products or services. Tools such as radio, television, internet, and newspapers are among the new innovations that enable organizations to explore new areas. Changes in communication technology have interconnected the global economy like never before. Technology empowers organizations to adapt to external changes by analyzing the environment through factors like PEST (political, economic, social, and technological) and predicting future trends. By embracing applied innovations and building confidence, organizations can effectively respond to these changes. It is important to acknowledge that successful inventions often stem from technological advancements [Original text adapted].Technology plays a crucial role in driving innovation and organizational growth. It serves as a catalyst for inventiveness and benefits existing products and markets by facilitating technological advancements within the organization. Numerous

watch companies have incorporated engineering into their designs, such as Tokyo Flash, which recently unveiled a USB rechargeable watch. Similarly, Kempler & Strauss has introduced a GSM cell phone wristwatch with a touch screen that offers various functions like music playback, calling, texting, photography, and storage of voice recordings and pictures.

It is important to note that innovative success is not limited to high-tech companies; even small or medium-sized businesses can achieve success through innovation by identifying opportunities and finding unique ways to capitalize on them. Apple stands out in terms of competitive advantage due to its exceptional design and marketing strategies. Unlike its competitors, Apple consistently delivers highly sought-after products like Macs, iPads, and iPhones. Moreover, Apple continuously introduces pioneering products before its rivals do, effectively capturing people's attention and interest. This trend often leads other companies like Sony, Toshiba, and HP to imitate Apple's product releases in the market.Apple's hardware design is unmatched by competitors, making it difficult for them to replicate. Other organizations can learn from Apple's disruptive innovation methods. Improving performance involves focusing on quality control, packaging design, and efficient delivery systems within the overall process framework. Effective operational processes and management practices are crucial for fostering innovation. Apple's success is attributed to their use of disruptive technologies in product designs. Packaging and advertising play significant roles in consumer behavior and the economy. Google earns substantial revenue through advertising as an internet technology company. Their disruptive innovations, like Google TV, have generated industry interest. eBay created an online marketplace for buying and selling goods and services, establishing a successful person-to-person trading community on the World Wide Web that contrasts with traditional innovation

creating new markets.A report by DataMonitor on food and beverage packaging innovations found that organizations are driven to develop based on health, convenience, and green/ethical factors [Raithatha, 2009]. Entrepreneurs are crucial sources of innovation for these organizations. Effective tools and techniques are necessary to promote innovation and positive change in different situations and challenges within companies. Many companies are utilizing innovative technologies and formats to generate more value or profits for consumers and businesses.

Invention Strategies:

To stay ahead in the competitive mobile phone market, it is essential to develop effective strategies for innovation. Despite the high demand for smartphones, Support Company has increased sales by implementing innovative approaches. For example, Samsung displayed a flexible mobile design screen at the 2011 Consumer Electronics show that can be bent or rolled up, emphasizing the growing importance of style in this industry. Research shows that approximately one-third of customers prioritize style when selecting a mobile phone [Mintel, 2011]. Overall, innovation offers advancements that enhance existing methods and have a lasting impact on technology and industries. Organizational innovation plays a significant role in gaining a competitive advantage by reconfiguring an organization [Tidd, Bessant, Pavitt p332].Organizational innovation now goes beyond internal operations and includes relationships between different enterprises. To succeed in a competitive market, organizations require effective mechanisms to implement ideas or opportunities. It is crucial to establish a supportive organizational context for creative ideas to emerge and be implemented successfully [Tidd, Bessant, Pavitt,p360]. Some innovations can greatly influence both organizations and society. Innovation can be achieved through creation, adoption, or acquisition via purchase.