Managing Innovation

Managing Innovation

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Innovation theory.........................................................................................................................1
Application of disruptive innovation theory in the historical development ...............................4
Application of the disruptive innovation theory in the future development context.................7
CONCLUSION ...............................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Innovation refers to the process through which a product, service is brought up to date
and renewed by introducing new techniques, implementing new processes as well as establishing
new ideas to generate new value. The generation of value is termed as the characteristic of
innovation. Value is defined in various ways like improvement to current products, introducing
the new product and service line and reduction of cost by implementing fast technology.
Innovation management is a sum of all management and innovation process such as change in
business process, organisational innovation, product and marketing to increase the brand value of
company (Bansal, 2021). To define this concept the selected theory is disruptive innovation
theory and business model canvas applied on Revolut. The Revolut is British financial
technology company which provides banking services.
The report highlights the innovation theory and application of innovation theory in the
historical development context. Further, it covers application of the innovation theory in the
future development context.
MAIN BODY
Innovation theory
Disruptive innovation theory
Disruptive innovation theory refers to the process in that a small business with less
resources come in the market to challenge the big and established company by introducing new
start-up, product and services at the lower level in the market as well as continued to move up
and change market. It is the long process which occur in number of steps. It is the technology
which makes expensive products and services more affordable as well as accessible to a broader
market. Disruptive innovation needs facultative technology, a coherent value network and a
innovative business model (Batac and Maymo, 2019). Sustaining innovation refers to the process
of creating or innovating for the improvement of product and services to satisfied the needs of
current customers. For example in Revolut, to apply the disruptive innovation the company
introduce new facilities in their financial services as online payment method, direct money
transferring form bank account from any company as well as currency exchange services to
reduce the risk of carrying cash all the time.
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There are 4 steps to understand the disruptive innovation theory are as follows-
Not all innovation is disruption- The company must use this theory to make changes in
their process of services. The manager have to understand not all the changes are innovation as
well as not all the innovation is disruption. Disruption means the changes, issues which are faced
by the target customers and big companies neglect the requirements of their various other
segments and new target market (Biemans, 2018). The company can use these as opportunities
to introduce new innovation which fulfil the needs of this segments to attract them towards their
company to earn profit and new customer base.
Disruption can be low end and new market- The disruption is two type such as low
end disruption as well as new market disruption.
 Low end disruption- It is plan of new businesses which come in initial stage of market
and offers services to the customers in a good way which is very effective. The big
company not give importance to this market as when the new business enter and make
huge profit then the big company move ahead upstream and give their full focus and
efforts on that area where the more profit margins are.
 New market disruption- It refers to the companies which emulate against less
consumption in low margin area of an industry. Same as low-end disruption, the goods
and services offered are seen as effective as well as the emerging company is enough
profit at the low price (Bucic and Singh, 2018).
Disruption innovation is a process rather than a product and services- It is not
concerned introducing new product and service, it is related with the process of services as well
as a curing the product and services in fast and effective way. As in Revolut , the company
change payment mode and type by providing the facility of debit card, online payment and
currency exchange to improve the experience of their customers. By using these changes they
can disrupt the current payment process or method of other big companies. As if the company
introduce new financial services they cannot defined it as a termed of disruption innovation.
Choose the battles wisely- Many small and new business come with disruptive
innovative ideas to compete in the market. So the big and established company used it as benefit
and opportunity to understand the disruption innovation and helps the company to generate new
idea or scheme to make improvement in their current product and services to fulfil the needs as
well as demands of customers (Gerybadze, 2020). So the manager of Revolut must evaluate the
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