(PDF) Innovation Project Management

MANAGING INNOVATION
PROJECT

Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY ......................................................................................................................................3
Innovation theory.............................................................................................................................3
Application of theory to AirBnb .....................................................................................................5
CONCLUSION....................................................................................................................................9
REFERENCES .................................................................................................................................10

INTRODUCTION
Innovation is the process of translating an idea or invention into products and services. In
business, Innovation results when ideas are applied by the company in order to meet the demands of
customers. In this assignment, AirBnb will be considered to perform the various task of this study.
AirBnb is an online marketplace and hospitality service provider and it is accessible via its websites
and mobile apps. It is involved in lodging industry and provide accommodation services to its
customer. It receives commission as a broker from every booking which is made through this. This
assignment will provide understanding of different innovation theories and there application to
AirBnb for increasing their customer base and provide more accessible services to its customers.
Moreover, it will include the critical analysis of development trajectory in order to identify the
success of the products and services in the future.
MAIN BODY
Innovation theory
Innovation is refers to an idea adopted by an organisation to improve their products and
services in order to provide the customers with better services. Innovation theories consist of
Schumpeter's theory of innovation which is in the line with other investment. According to this
theory, innovation is changes in methods of production, developing new services, opening up of a
new market etc (Schumpeter’s Theory of Innovation, 2018). Innovation does not mean invention
rather it refers to commercial application of new technologies, new methods etc. Schumpeter's have
developed the stages which consist of first approximation and second approximation in order to
explain the business cycle theory of innovation (Bahemia, Squire and Cousins, 2017). In the first
Approximation the stage begins in equilibrium where there is no involuntary unemployment.
Innovation assist in increasing the demands of their services provided by the company and
increasing their customers base.
Schumpeter's theory of innovation is faces various disadvantages because this theory is more
based on sociological factors rather than economic factors. According to this theory innovation is
related to introduction of new products or services which assist in gaining the new market through
the new products and services to attract customers towards the products and services of the
company (Biemans, 2018). Schumpeter provided S – curve to define the innovation for providing
clear understanding to the different organisation regarding innovation. According to this innovation
is defined as change in existing production system to increase the profitability and reduce the cost
of organisation. The Schumpeter theory of innovation provided that the innovation opportunities
are created on the basis of introduction of new product, entering into new market with new product
etc.

S – curve represent the variation in the performance in function of time or efforts. This
framework is more flexible in order to analyse the introduction, growth and maturation of
innovation.
Another theory of innovation includes the peter Drucker seven sources of innovation in
which it provided with the different sources which can lead to innovation or changes in the method
(Brulin and Svensson, 2016). According to peter Drucker, systematic innovation is related to
monitoring of the seven sources for the innovative opportunity. The first four sources are within the
organisation that lead to innovative opportunity :
Unexpected : The best source of successful innovation is the form of unexpected success
and failures. The organisation can have rise in their market share which may be unexpected.
Incongruity : It is the discrepancy between what is and what should be. It is symptom of
that which is already occurred. It identified that if the demand for the product or services grow
steadily, its economic performance should be improved (Chandrasekaran, Linderman and
Schroeder, 2015). If there is lack of profitability then there is incongruity between the economic
realities.
Innovation based on process need : It means identifying the need of change through
detecting error in the process which can helps the organisation in creating innovation opportunities
for the business to attract more customer and increase the profitability of business.
Changes in industry structure or market structure : It leads due to changes in the
customers preferences, taste and needs. Disruptive technologies address lower market or the market
that is not fully developed (Ćirić, Lalić and Gračanin, 2016). These technologies have the tendency
to grow there market. With the change in industry and market structure provide the opportunity to
organisation for innovation which may assist them in increasing their profitability.
The below sources involve outside the enterprise of industry :
Demographics or population changes : Changes in the population, income level and
human capital provide the organisation with innovation opportunities. Gathering demographic data
assist the organisation in meeting the demands of target market.
Changes in perception, meaning and mood : it means change sin the perception of the
people which provide the organisation to changes their products or services according to their need
to attract customers toward their organisation (Peter Drucker on the Seven Sources of Systematic
Innovation, 2017).
New knowledge : With the increase in the technologies there have been increasing tin the
knowledge such as internet which has brought great innovation in the industry which has provided
organisation to offer their products and services to the large customers around the globe.
This two theories are the important in innovation which provide industries with various