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Innovation is a new idea or notion that result in a new service or product. Innovation can make a great impact on the purchase, usage and disposition styles. For instance, Microwave ovens have transformed the manner we cook. Text messaging and email has transformed how we interact; digital cameras and mobile phones have transformed how we take photos and exchange them with our friends. Reusable and recyclable packaging have transformed the awareness on recycling the products. For disposing of the scraps or unwanted products or used products, now online sites such as Craigslist, eBay and Freecycle offer innovative means for consumers. (Hoyer, MacInnis & Pieters 2012:417).
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“Why innovation is seen as a core competency in relation to competitive advantage and how this relates to the current highly competitive state of the global event industry?”
The main aim of each business organisation in today’s highly competitive atmosphere is to overthrow competition by winning new customers. Those businesses which are owners of knowledge symbolise a tool for the creation of innovations. As per Hana (2013), nowadays business organisations find it significant to innovate and encourage an innovative culture. According to him, knowledge too is very critical in the process of innovation since it symbolises not only significant but also the output of the alteration progression. According to Bartes (2009), the 21st century is footed upon information, knowledge and state-of-the-art economy. Today, if an organisation wants to be a success, it has to rely on knowledge of the employees, their creative function and with more relevance is imposed on uninterrupted learning and research and development. Tushman & Nadler (1986) pointed out that business organisations can reap competitive benefit only by managing the business effectively today while concurrently fostering creative for tomorrow. (Tushman & Nadler 1986:74). Thus, for any business, innovation is still visualised as a major driver for economic performance. As per Tidd et al., (2006), business owners who tries to employ technological innovation for manufacturing a new or novel product or service or by using a new process in the course of their manufacturing process, definitely will attain a strategic competitive benefit as compared to its competitors (Hana 2013:82).
As per Global Innovation 1000 study (2011), 7 of the top 10 innovating companies were not actually top spenders of innovation. However, these top 10 innovators are able to maintain a good financial performance than the top 10 R&D spenders (Jaruzelski & Mainardi 2011).
The following table demonstrates how the top 10 most innovative companies like Google, Apple, 3M, Toyota, GE, P&G, Microsoft, Intel and Samsung are expending.
Figure 1- Top Most Innovative Companies
Source: (Jaruzelski & Mainardi 2011).
The following figure shows how the top 10 innovating companies noteworthy outstripped their peers on the Global Innovation 1000 list on the major three major financial metrics such as revenue growth, market cap growth and the EBITDA as % of revenue. Thus, innovative companies are able to expand their growth in revenues, market cap growth and an increase in EBITDA (Jaruzelski & Mainardi 2011).
(“Jaruzelski & Mainardi 2011”).
“A range of appropriate definitions of innovation.”
As per Herbig and Kramer (1993), the word innovation derived from the Latin “innovate” which means to renew. As per BEER (2008), innovation is nothing but the efficacious use of new ideas. Innovation is the improvement and propagation of a new service, process or product that engenders social, economic or cultural transformation. Thus, innovation can be explained as the assimilation of new know-how, scientific discoveries and inventive activity resulting in the social and economic value. (BERR 2008). Some of the examples of innovations are Internet, email, digital cameras, global positioning systems (GPS), iPad and Google self-driving car. Uber is the best example of innovation as the company with the help of software is able to generate huge revenues throughout the world without owning a single car (Gilliard 2015).
“The four key dimensions of innovation: Product, Process, Position and Paradigm offering events industry examples of each.”
At the phase of product development, a capability to involve actively with the consumers to demonstrate the soundness of the concepts and to evaluate market perspective and risks and the capability to clout the present product podiums into new products (Carayannis, Samara & Bakouros 2014:50).
Process development stage takes many phases. For instance, Xerox introduced the first ever copying machine in 1949 which had to be operated by the experienced operators manually. Xerox later resorted to processing enhancement and market switching by introducing lithographic plate printing. In 1955, Xerox introduced an automatic version of its copier, and in 1958, it introduced advanced copier machines with after sales services. Thus, for Xerox, it took nearly one decade to improve its process (Smith & Alexander 1999).
Positioning involves placing the invented process or product in a particular context. It refers to how a particular process or product is comprehended symbolically and how they are employed. For instance, Levi-Strauss jeans are a well-known international product which originally produced as clothing material for manual workers then re-branded as a fashion item (elrha.org 2015).
Paradigm innovation refers to the whole sector paradigm-footed innovations which relate to the mental replicas which outline what a business is about. The emergence of community –oriented feeding therapy to eliminate malnutrition is the recent illustration of paradigm shift of innovation as it involves a mixture of a product which is PlumpyNut, a distribution for the whole community (the process), the absence of the role of aid agencies (a paradigm shift) and involving communities to offer a solution to handle the malnutrition at home itself (elrha.org 2015).
At commercialisation phase, a capability to function with the pilot users to phase out the products more methodologically and to coordinate across the whole organisation for an efficient launch (elrha.org 2015).
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“Social innovation, with relevant examples.”
As per Mulgan (2006), social innovation denotes to innovative functions and services that are inspired by the aim of catering social requirements primarily carried over by the organisations whose main aims are social as contradicted to business innovation which is normally supported by maximisation of profit and carried over through the organisations which are predominantly motivated by the concept of profit maximisation. Social enterprise, social entrepreneurship or social innovation have now been considered as conventional ideas in politics that comprehend an assorted set of strategies and initiatives to back up the provisions of public supplies or in general to strengthen the innovative capabilities of nations mainly through the other means instead of through the public sectors. As per Lake 2015, for the USA, EU, Japan and the UK, social innovation is a major notion in accomplishing inclusive and sustainable growth. One another example of social innovation is emission trading which is a pollution control scheme that employs economic incentives to minimise emissions to reduce global warming. (Saiz-Alwarez & Manuel 2016:33).
“Incremental and radical innovation, with relevant examples.”
Incremental innovation is the exploitation of a present innovation in a manner that enhances upon them, but less melodramatically than through the productive innovation. It is an innovation which involves lesser perils and consumes less time as compared to a breakthrough invention ending in solutions deliberated as less cutting-edge. As per Leifer (2000), the example of incremental innovation is the cost reduction or making future enhancements in the existing services or products.(Leifer 2000). For instance, the release of Gmail by Google is considered as a milestone in the Internet mail service. When Gmail was launched, it had very restricted features. After some years, incremental features such as ‘beta’ version and then finally now it is referred as a complete version and up to now, more and more enhancements are being added ( Homme 2012:20).
A disruptive or a radical invention is one that has a noteworthy effect on a market and economic activity of that business organisation in that market. This notion of innovation spotlights on the effect of innovation instead of novelty. A radical innovation can transform the market, establish new markets or make the existing products as out-dated. For example, rechargeable Gillette razors is a radical innovation as a user can use it for many shaves, and due to this, shaving with the blades have become obsolete (Agmon & Sjogren 2016:41).
“Continuous and discontinuous innovation, with relevant examples.”
Continuous innovation is one which has a restricted impact on the present consumption styles of consumers. This type of innovation is employed in much the same manner the products which was used before it. It is to be noted that each and every new product that is being introduced in the market falls under continuous innovation (Ries 2011). Dynamically continuous innovation is one which is likely to have an impact on consumption behaviours. Frequently, these innovations introduce a novel technology. Video cameras with the pocket size such as Flip will fall under the category of dynamically continuous innovation when they were first ever introduced as they transformed the manner that consumers made, stored and exchanged the videos. Even though the Flip was able to revolutionise the camcorder profession, Flip failed to exist in the market due to the largescale availability of digital cameras and smartphones (Hoyer, MacInnis & Pieters 2012:417).
Discontinuous innovation is a new invention which is never known to us earlier. For instance, Internet services and aeroplanes were once considered to be discontinuous innovations that fundamentally transformed the consumer behaviour. Discontinuous innovation is often spawned on an array of peripheral products and linked innovations. For instance, after the introduction of the micro oven, businesses started to offer temperature probes, new pans, cookbooks, food products designed particularly for microwave cooking. For instance, Campbell’s Microwavable Soup at hand facilitates the consumers to taste soups while they away from their residence, which transforms how, where and when the soup is taken (Hoyer, MacInnis & Pieters 2012:417).
“How organisations do or do not manage or implement innovation.”
The managers should feel certain that they comprehend the background in which they function and what their role in the playing field in relation to other players in the industry before initiating an innovative strategy. The five forces framework developed by Porters (1980) facilitates the business organisations to carry out fair action that by demanding the managers to have a closer watch at suppliers. Customers and new competitors, available substitutes for the existing products and the overall competitive position of the industry (Stamm2008:111).
“Porter’s 5F Model.”
Higgins (1996) employed the 7S framework to indicate how to introduce an innovation strategy which is detailed below:
“The 7S framework.”
|Strategy||Should mirror the demands of the future atmosphere and how the business intends to retort to or transform that atmosphere to cater its desires.|
|Structure||Innovation hubs, innovation teams, communication, evaluation of ideas and alliances|
|Systems||Management information systems, to align remuneration and rewards, extending support to creativity and innovation, the procedure for implementing process and encashing and marketing innovations.|
|Style||Transformational leaders, acknowledging failures|
|Staff||Recruitment of people with the innovation, to impart training, to nurture innovative champions|
|Shared Values||Shared values are determined by strategy|
|Skills||To nurture opportunities, to enhance and innovate incessantly, knowledge management process, organisational learning efforts and to invest in R&D|
Source: “(Higgins 1996”)
“The Consequences for not innovating.”
As per Joseph Schumpeter, the business failures are triggered by incidents which are external to the business. There are many business failures mainly due to constant soaring in the market competition which is triggered by innovation. There will be creative destruction if a business fail to innovate and to swim along with its competitors. Some of the businesses that failed not to invent are Xerox, Yahoo, Blackberry, MySpace, Polaroid and the whole publishing industry (Blanchard 2011:10).
“How risk perception can affect the way an organisation can or cannot be innovative.”
Perceived risk is one which is connected with the espousal of the innovation in an organisation. Perceived risk can be many kinds such as functional risk due to performance vagueness, physical risk, social risk and psychological risk. The magnitude of perceived risk banks upon the kind of innovation. There have been lower levels of perceived risk for the consumer products which involves either continuous or minor innovation. The “Discontinuous “or “minor “innovations destabilise disruption of monotonous behaviour and will have higher magnitudes of perceived risk linked with them (Ram 1987:210).
“The link between innovation and creativity.”
As per Florida (2004), creativity pushes the wider innovation process of modern economies by acting as a basic source of novelty (Lee, Florida & 2004:879). According to Christensen 1997), the job of creativity is to search for ideas for novel services and products that will be exclusive and respected in their markets. As per Zhou and Shalley (2008), creativity is a crucial basis for innovation. In reality, it is enticing to treat creativity as the foremost step in a more widespread process to as innovation as a forerunner to the real business of innovation (Cropley & Cropley 2015:14).
“The connection between entrepreneurship and innovation.”
The idea or innovation can be referred as the one solitary feature of the processes of the entrepreneur in turning the business into a success (Schumpeter 2000:51). An entrepreneur is an individual who incorporates or administers a business mainly to accomplish growth and profit. An innovative entrepreneur will use strategic management practices in the business to make it a success and differentiate it from its competitors. Creative destruction developed by Schumpeter in 1934 describes that the introduction of a new idea mainly to seize over a market and connects the entrepreneurs to economic growth and development. Entrepreneur’s innovation may be transforming the processes of production, minimising the size of the workforce by implementing automation mainly to reduce the cost, or by the introduction of a novel product. By doing these, an entrepreneur wants to be ahead in the industry by leaving their competitors behind them. Hence, we can reiterate that there is a definite connection between innovation and entrepreneurship (Bessant& Tidd 2011:196)
“Whether innovation is a personal attribute, or can be learned as a systematic management process.”
An employee can nourish or support innovation or they could obstruct it. (Michalski 2006:22). It is argued that the personal capabilities and qualities make an employee to be innovative. However, some call innovation as a management process. Innovative demeanour in an organisation involves all functions that belong to generating, evaluating, accomplishing, seizing and introducing the novel concepts. Innovation in an organisation will involve the employees search for and the evaluating the new technologies. The identification and employment new phases to attain the goals of the business. The employment of new work methods and the employment of new sources to realise ideas. (Yuan & Woodman 2010:324).
“Whether the size of an organisation can impede or stimulate innovation.”
According to Schumpeter (1950), giant companies with monopoly power were likely to innovate on a large scale due to their easy access to capital, capability to pool risks, and to accomplish economies of scale in running their R & D tasks. As per Scherer (1984), the large scale of innovations is made by small businesses. The small business innovates out of proportion as large businesses innovate roughly in proportion. According to Scherer (1984), there is no reliable corroboration that size of the businesses results in more innovation in the USA (Holmstrom 1989:305). Hence, we can conclude both the large and small business are indulging in innovation mainly to make their survival as certain (wps.aw.com 2015).
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Innovation is like oxygen for any organisation whether it is a small or big one. Business organisations which do not innovate may lose their position in the market. Many companies who do not innovate had disappeared from the market, and the examples are Xerox, Yahoo, Blackberry, MySpace, Polaroid and the whole publishing industry. There are many advantages for the firms that innovate. As per Global Innovation 1000 study (2011), 7 of the top 10 innovating companies were not actually top spenders of innovation. However, these top 10 innovators are able to maintain a good financial performance than the top 10 R&D spenders (Jaruzelski & Mainardi 2011). This demonstrates that if a business organisation wants to grow both vertically and horizontally, it has to innovate and this is needed for their survival and to outperform their competitors.
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