Managing Innovation

Managing Innovation

Table of Contents
INTRODUCTION...........................................................................................................................3
Innovation Theories.........................................................................................................................3
Blue Ocean Strategy:...................................................................................................................3
Diffusion of Innovation (DOI)Theory:........................................................................................5
Application of Blue Ocean Strategy in Made.com’s Previous Operations.....................................6
Application of Diffusion of Innovation Theory to Made.com Future Operations..........................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation can be defined as the process of converting an idea or invention already
existing in the markets into valuable goods and services which consumers can make use of in
exchange of money. Innovation can be of many types such as technology, machinery, equipment,
music or business processes and paradigms, but all are immensely influential for the growth of
the innovating organisation in the markets in which it operates in. Innovation provides business
organisations with a competitive edge to compete against their perceived rivals in the consumer
markets while increasing their operational performance, efficiency, productivity and profitability.
The prime objective of innovating is to add additional value to an already existing product or
service in the market in order to make it more accessible, efficient and effective for the
consumers or business organisation (Sitinjak, Pramawijaya and Gunawan, 2018). In this report
we assess the impact of innovation theories on the business organisation Made.com a designer
and retailer of furniture and homewares operating from its headquarters in London, England. The
business was founded in 2010, 10 years ago and conducts their business through online stores
and experiential showrooms across Europe, employing 590 people for its operations as of 2020.
Innovation Theories
Business organisations can make use of and implement into their operations a plethora of
innovation theories with the intention to improve their product or service innovation operations
and to gain a competitive edge against their competitors in the consumer markets. Innovation is
essential to a business organisation’s operational growth and development as it provides the
business organisation with increased operational performance, efficiency, productivity and
profitability in the consumer markets. Some widely used and successful innovation theories are
as follows:
Blue Ocean Strategy:
This innovation theory was first put forward by Renée Mauborgne and W. Chan Kim in
their book titled Blue Ocean Strategy as a critique to Porter’s force business model which
according to the author’s creates merciless competition in the consumer markets, because of

which business organisations remain in ‘red oceans’ which is further discussed in the report.
Blue Ocean Strategy encourages business organisations to pursue lower costs of products and
high product differentiation, from the products offered by their competitors in the consumer
markets with the intention to create new consumer demand in the market and open up fresh
market space for the business organisation. Blue Ocean Strategy operates on the principle to
make the competitors of a business organisation in the market irrelevant by effectively creating
and capturing uncontested fresh space in the market (Ellinger and et.al., 2020). Blue Ocean
Strategy specifies the existence of two kinds of oceans in the market Red and Blue Oceans. Red
oceans comprise of all the business organisations currently operating in the market. In such
oceans or markets, the boundaries are universally accepted and defined with the rules of
competition known. In contrast, blue oceans are made up of fresh market space, uncaptured by
any business organisation in existence. Blue oceans provide business organisations with limitless
opportunities to grow and expand their business organisation for profits. In blue oceans,
competition of a business organisation is rendered irrelevant. Blue Ocean Strategy operates on
four major principles:
 Reconstruction of Boundaries: Businesses first have to reconstruct market boundaries
with the help of innovative technology or processes in order to gain a competitive
advantage against their competitors.
 Innovative Focus: Businesses have to focus on operational innovating thinking in order
to evaluate what needs of customers are currently unsatisfied in the current markets and
innovate or develop products or services which can meet these unsatisfied requirements
of consumers.
 Future Demand: Through their innovations, businesses need to attract potential clients in
the future who are not currently part of the existing market share of the industry for
various reasons (Plakhotnik, Zybrichev and Smirnov, 2019). In this way, businesses can
effectively increase their future market share in an effort to expand and grow their
operations.
 Strategical Plan: Businesses need to strategically develop a plan that identifies all the
issues and problems it might face during the adoption phase of its innovative products or
services by consumers and retailers in order to effectively implement solutions when the
need eventually arises.