Managing Innovation: Theories and Frameworks for Business Growth

This article discusses the importance of managing innovation in business and introduces the Blue Ocean theory and Disruptive innovation theory. It also provides a case study of Vinted, an online marketplace, and suggests future development strategies for the company. The article is relevant for students studying innovation management, business strategy, and entrepreneurship.

Managing Innovation

TABLE OF CONTENT
Contents
INTRODUCTION...............................................................................................................................3
TASK....................................................................................................................................................3
Theoretical Explanation.....................................................................................................................3
Theory Application............................................................................................................................6
Future development...........................................................................................................................7
CONCLUSION....................................................................................................................................9
REFERENCES..................................................................................................................................10

INTRODUCTION
In a competitive market place, it is important for company to be innovative and create
unique and innovative products to attain success. Basically, innovation is considered as an
important procedure of introducing something new or different that assist business in inviting
more and more customers. As it leads to the launching as well as coming with new ideas,
methods and products that contributes in attaining competitive growth at wider market place.
Thus, it is significant for business organization to effectively manage innovation and always
tries to come up with new and creative ideas in their product line (Sanz-Llopis and
Ostermann, 2020). With the assistance of this, company can improve their customers base
that positively contributes in increasing profitability level at competitive market place. For
attaining the same, being innovative and creative is crucial for company through which
capturing larger market share from its competitors can be easier. Current project is based on
Vinted, is a famous Lithuanian online marketplace that provide path to user to sell, purchase
and swap new or second-hand items including clothing and accessories. Company also
focusses on providing new and innovative products to its customers in order to make them
satisfied. Project is going to discuss about different innovation theories and framework that
may assist company in improvising their overall performance at competitive market place. At
last, future development is also mentioned in this project that directly provide opportunities to
establishing their positive brand image in-front of customers and market as well.
TASK
Theoretical Explanation
Innovation is the development of renewing and updating an area, a company, or a service by
launching innovative methods, establishing new techniques, or generating successful
concepts to produce new value. The successful introduction of effective ideas is critical to a
company's opportunities to boost its procedures, bring newly designed products or services to
market, maximize productivity, and, very crucially, improve efficiency. Changing or
eliminating organizational efficiency and profitability, or to allow the company to broaden or
improvement of existing products and services (Gasparin and et. Al., 2021). As, innovation
planning is fundamental since it is what allows the company to stay successful in the long run
by continually staying ahead of competition and having higher profits. Inability to see the
significance of innovative business results in an organization remaining trapped with old
offerings, or even going out of business, while competition begin to maintain its leading
position by giving new and greater benefits to clients. In this context, Vinted is also operating

for introducing new and innovative ideas to developing unique product line. This can be
assist providing quality products to its customers as per their need and wants (Brem, Tidd and
Daim, 2019). For attaining favourable results, Vinted use various innovation theories to
maintain their positive brand image at competitive market place. As there are various
innovation theories that company can use to make their product more unique and innovation.
All the innovation theory can be understood by following points:
Blue Ocean theory of innovation: The combination of high - quality and low cost at
the same time in order to open up a growing market system and increase market pressure is
known as a blue ocean strategy. It is all about generating and controlling unchallenged
market space and so rendering the competitors irrelevant. It is founded on the concept that
market borders and business environment are not fixed and may be recreated through the
thoughts and behaviour of industry participants. Basically, A Blue Ocean Strategy refers to a
demand for a particular product in which there is no or very little competition. This method
entails looking for a company in which only a few companies exist and because there is no
factor determining. Blue Ocean Approach can be used in a variety of industries or enterprises.
It is not limited to a single industry. But first, let's define Blue Ocean strategy and how it
differs from Red Ocean approach. In today's economy, most businesses compete fiercely for
market dominance and will go to any length to obtain it. When a product's price is under
competition, a company's operations are at risk. This happens most often when a company
operates in a crowded market, commonly described as a 'Red Ocean.' A Blue Ocean Strategy
seeks to identify and create “competitive advantages” (uncontested, rising markets) while
avoiding “red oceans” (overdeveloped, saturated markets). In a blue ocean market, a
company will have much more performance, less risk, and higher profitability. When there is
little potential for expansion, organizations look for niches or ways of establishing new
company from which they can enjoy unchallenged market penetration, or 'Blue Ocean.' A
blue ocean arises because there is the opportunity for higher earnings due to the absence of or
insignificance of rivalry. By developing a product with greater characteristics, the strategy
tries to capture fresh demand and render competitors irrelevant. It assists the corporation in
making large profits because the goods can be priced a little high due to its unique qualities.
This strategic thinking technique differs from the traditional skills and management,
which focuses on numbers and competitor analysis (Dawson and Andriopoulos, 2021). Blue
Ocean Strategy is about building demand in a rising, uncontested industry and conquering
this unchallenged space, instead than aiming to capture higher market share for an already

competitive market. The goal of the blue ocean approach is not to gain sustainable
competitive advantage. It intends to render the competition obsolete by reshaping industry
boundaries. Whereas traditional strategic objectives encourage companies to describe their
industries similarly and focused on becoming the best inside them, blue ocean strategy
encourages them to break free from the established bounds that determine how companies
operate. Instead of searching within these borders, managers must look through them in order
to generate blue oceans - new and unchallenged market area with new market share and high
enhanced profitability. Blue ocean strategy provides methodical techniques and frameworks
for distinguishing oneself from the competitors and creating a blue ocean of uncontested
market space. In contrast, the discipline of management has primarily concentrated here
about how to participate in traditional businesses, developing an arsenal of analytic tools and
approaches to do so effectively (Brem, Tidd and Daim, 2019).
Disruptive innovation theory: Disruptive creativity is the implementation through
which a local company, generally with limited staff, is able to contest an established
corporation (sometimes referred to as an "incumbent") by entering from the low end of the
market and moving up. Disruptive innovation process usually happens through a number of
steps:
1. Businesses who have just established or considered as incumbent, make some kinds of
innovation in their product and services so as to appeal to the masses, majorly their
demanding customers. Thus, companies here ignore the demands and needs of
downmarket.
2. In some cases, the new entrants get the opportunity and target the ignored market
segment by reducing the cost of the commodity as compared to the incumbents. This
helps the new entrants in meeting the needs of consumers and also help in gaining a
standard in marketplace.
3. Whereas, the established corporation i.e., incumbent, instead of responding to new
entrant continue to focus on their services from which they can get more and more
profits.
4. Besides all these, new entrants with the help of their services and facilities eventually
move in upwards direction, and tries to appeal to the mainstream customers who are
associated with incumbent.
5. Therefore, the disruption occurs when the new entrant successfully manages to attract
the incumbent mainstream customers.

Therefore, disruptive innovation theory, is referred as something through which
company provides its services to more skilled segments of customers not only to the highly
sophisticates consumers but also to those who are more affordable and accessible which
means the broader population (Mao, 2021). Moreover, it can be said that, the disruptive
innovation does not only have the negative aspects for incumbent organisations rather
company can use this as a process for improving the services by enhancing the products for
the target customers or group. However, company can use technology in order to make the
processes easy and available to all including the non-targeted market. For understanding
descriptive innovation then we can understand the same with the help of an example; the
introduction of digital music downloads which has in some context has replaced the use of
compact disc (CDs). However, it has brough losses to CD making companies but trough
digital music downloads company can reach out to maximum number of people. Therefore,
as the bottom line, in order to sustain in the market area as a disruptive innovation then, it is
required that company make proper use of technology because technology is the only source
through which a company can transform the product and services. Over the period of time,
there are many companies who have evolved and came up as a market disruptor for new
entrants and other companies for example, Amazon, Netflix etc.,
Theory Application
Application of theory, whether it is successful or not can be determined after the
analysing the consequences if these are positive or negative. After going through the previous
portion of the assessment i.e., theoretical explanation, it is determined that “Blue Ocean
Theory” will be the most suitable theory of applying in business. The main reason behind this
is tendency of exercising typical management system by focussing majorly on competitive
benchmarking instead of putting an emphasis on gaining more market shares in the present
market space. Thus, with the help of this theory company will be more prominent in creating
strategies that demand growth. As compared to disruptive theory, blue ocean theory is more
theoretical as company can have a study of their success and failures based on the relative
data other then the unproven ideas (Bushuyeva, Bushuiev and Bushuieva, 2019). However,
through the application of blue ocean theory, the sense of competition becomes irrelevant, as
the main priority remains to focus on aims and goals so that, if the present strategy is not
giving them the better results then the company can focus on redrawing the boundaries of
industry, so that, within the new boundaries or space the company can do better.

In context with the company, Vinted, the organisation can think of the theory as the
distinctive opportunity which can further take the company beyond the artificial boundaries.
For example, Vinted company can choose the right place to start the business-like online
platform as it will make the company to reach out to maximum number of people in single
time frame. Thus, in order to do this, the company requires a team who can use their rightful
talent in providing excellent services to its customers. Meanwhile, Vinted, with the help of
technology and research and development team, they can analyse and get a clear state of the
market area so that according to the same some effective strategies can be developed. For
example; developing an application for providing a space to customers where they can have
an open space to choose from the provided products (Tidd and Bessant, 2020). As Vinted,
deals in selling second hand clothes, the company should also uncover the hidden services so
that limitation regarding the current size of the company (mainly reaching out to customers)
can be expanded. For instances; the company can start giving clothes on rent for a specific
time of period, and that too in a very reasonable price. Therefore, people who urge to wear
fashionable clothes but because of their budget could not afford can afford the clothes now.
Nevertheless, all these activities require a systematic strategy because there might be a
possibility of failure if not implemented properly. Therefore, the theory of blue ocean should
be first analysed properly and then it should be implemented for better results.
Blue Ocean theory, although, provides with a large number of benefits but it also
unfolds certain limitations which should be considered by the company in order to eliminated
the possible consequence right on time. For example; Shift in blue ocean, as we know that
over the period of time, fashion is changing and people are preferring clothes which are more
stylish. Thus, if the fashion changes like this, then there can be a possibility that the stocks
that is available with Vinted can go out dated. Therefore, the company’s strategy must
include some innovative features which can add value to the product.
Future development
Considering the future development in business, if the company is looking for
sustaining its growth rate then it is important that the company should focus on pulling the
quality of the services and products provided. It will take a significant strategic approach in
order to take the business to the next level so that associated clients and customers can last
forever. In relation with the company, Vinted, company must go along with the changing
trends because the sector on which the organisation is dealing (fashion) has always been
known as the sector that pushes itself towards new trends. Thus, Vinted should provide

clothes that are sustainable and eco-friendly because over the period of time, fashion will be
casted amongst one of the biggest contributors to waste due to the changing trends. But if the
company will move towards gathering clothes that are more sustainable in terms of fabrics,
then consumers will be more likely to purchase the same. Moreover, after having conducting
a survey, it has been evaluated that nowadays, around 88% of consumers seek for clothes that
are environment friendly. Even more, in coming times it is estimated that the second-hand
market is expected to hit around $64 billion by 2024 thus, one could see a strong growth.
Apart from the changing trends, Vinted, as a future development should adopt new and latest
technologies in order to enhance their business. Switching towards digitalisation is one of the
most promising platforms for selling clothes. Over the period of time, people have become
more comfortable with the convenience and speed of online shopping. Even if the customers
are not buying the clothes, they can try the clothes on virtual platform with the help of sizing
tools. Therefore, unlike big companies, Vinted should inculcate an option of AR to virtually
try on items. As a result, this action will help the customers to stay more confident while
purchasing the item. Eventually, Vinted can incorporate “3D prototypes on avatars” in their
mobile application as it will make things easier to showcase and thus, testing the product will
be easier. Artificial Intelligence, one of the important components of technology, has played a
crucial role in enhancing the shopping, data analysing, boosting the sales, forecasting trends
and so on. Through chatbots customers can easily ask their queries and look for the
suggestions from the respective company’s team. For example, providing a space in mobile
application where, with the help of specific keywords and navigation patterns customers can
sort their required products. Doing so will reduce the usual time taken.
With the change in course of time, instead of creating eight collection a year,
companies have shifted its fashion in two collections a year, simplified in spring/summer and
fall/winter. Simplified fashion has provided companies with a leverage to provide consumers
with an option of saving money even after staying stylish. Vinted can also look for taking its
business towards vertical marketing. Through this, the company can go after the priority
accounts and clients who are more likely to purchase the goods and service of the respective
company. Despite all these aspects, making the product reach out to customers is the
prominent factor. Moreover, as a future development, Vinted, can focus on developing
coherent value network such as developing a better coordination between suppliers and
distributors because it will help the company in delivering the products to its respective
company really fast and secure as well.

Therefore, being in a market where the frequency of businesses is changing relatively
fast company has numerous options for selecting their preferred category. Like showing more
engagement in social media sites because in today’s scenario, an average person spends
around 116 minutes on social media hence, interacting with on the platform will assist the
company in improving their customer’s base. Therefore, making the company more
optimised with mobile, will assist the company in attracting a huge number of customers in a
single time frame. In relation with the operating systems of today’s businesses most of the
companies look for attracting more and more customers and thus, accumulated a lot of
strategies. Moreover, considering this factor Vinted, should personalise its content. If the
company manages to do so then it will definitely assist the company in developing
relationships with its valuable customers.
CONCLUSION
From the above report, it has been concluded that, managing innovation is one of the
important activities for business organization as it provides a path in which company
introduce new product line in market place. This can be assisting in increasing the
possibilities of attaining competitive advantage from its competitors. In addition to this,
company also use different management theories to enhance their positive brand image. With
the assistance of this company can capture customers attention towards its new product line.
In addition to this, Vinted should offer items that are both sustainable and environmentally
friendly, as fashion will become one of the most major contributors to waste throughout time
as a result of shifting trends. Customers will become more likely to buy items made of more
sustainable fabrics if the industry looks in that direction. They may analyse and gain a clear
condition of the commercial district with the use of technology and research and innovation
teams, and build successful strategies based on that information. For instance, creating an
application that allows clients to have an open space wherein they can select between a
variety of things. By this company can easily sustain in market place for longer period of
time and maintain their competitive brand image.

REFERENCES
Books and Journals
Tidd, J. and Bessant, J.R., 2020. Managing innovation: integrating technological, market
and organizational change. John Wiley & Sons.
Mao, Y., 2021. Managing innovation: The role of collateral. Journal of Accounting and
Economics, p.101419.
Bushuyeva, N., Bushuiev, D. and Bushuieva, V., 2019. Agile leadership of managing
innovation projects. Innovative Technologies and Scientific Solutions for Industries, (4 (10)),
pp.77-84.
Brem, A., Tidd, J. and Daim, T.U. eds., 2019. Managing Innovation: Understanding and
Motivating Crowds (Vol. 32). World Scientific.
Dawson, P. and Andriopoulos, C., 2021. Managing change, creativity and innovation. Sage.
Brem, A., Tidd, J. and Daim, T.U. eds., 2019. Managing Innovation: Internationalization of
Innovation (Vol. 34). World Scientific.
Gasparin, M., Green, W., Lilley, S., Quinn, M., Saren, M. and Schinckus, C., 2021. Business
as unusual: A business model for social innovation. Journal of Business Research, 125,
pp.698-709.
Sanz-Llopis, J. and Ostermann, M., 2020. Innovation in project management through framing
and challenge redefinition. International journal of managing projects in business.
Lütjen, H., Schultz, C., Tietze, F. and Urmetzer, F., 2019. Managing ecosystems for service
innovation: A dynamic capability view. Journal of Business Research, 104, pp.506-519.
Erdogan, I., Rondi, E. and De Massis, A., 2020. Managing the tradition and innovation
paradox in family firms: A family imprinting perspective. Entrepreneurship theory and
practice, 44(1), pp.20-54.
Simmers, C.A. and McMURRAY, A.J., 2019. Organisational justice and managing
workplace innovation: How important are formal procedures?. International Journal of
Innovation Management, 23(03), p.1950026.

Lee, S.M. and Trimi, S., 2021. Convergence innovation in the digital age and in the COVID-
19 pandemic crisis. Journal of Business Research, 123, pp.14-22.
Reimann, M., Xiong, Y. and Zhou, Y., 2019. Managing a closed-loop supply chain with
process innovation for remanufacturing. European Journal of Operational Research, 276(2),
pp.510-518.
Hwang, J., 2019. Managing the innovation legitimacy of the sharing economy. International
Journal of Quality Innovation, 5(1), pp.1-21.