Managing Innovation Essay

This essay analyzes the importance of innovation in business growth and examines the application of disruptive and diffusion innovation theories to Made.com's product development strategy. It explores the historical development of their foldable wooden table, identifies key adopter categories, and outlines future development pathways using the horizontal innovation funnel.

MANAGING INNOVATION

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Usage of Appropriate innovation theories..........................................................................1
2. Product Historical Development........................................................................................4
Future possible development Pathways..................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In these report it covers the topic of managerial innovation as innovation helps the
company in expansion and growth and also for survival in long time and also by the help of
innovation company can gain competitive advantages and also solve many problems . This report
is base on the company name as Made.com which is base on London and indulge in designs and
retailing home wares and also sell furniture online. It will also involve two innovation theory that
is disruptive theory and diffusion theory and also the linked with the Made.com innovation
strategies (Reinhardt and Gurtner, 2015). It will also cover the linked between the theories and
the historical development of the product of Made.com and it will explain the possible future
development of the product by the help of innovation theories.
MAIN BODY
1. Usage of Appropriate innovation theories
Innovation refers to creating new ideas, thoughts and new imagination. Innovation is
main source of business in the modern world as it helps the organisation to work in long term
basis. Innovation helps the business in expansion and diversification and also helps to give tough
competition to its competitor. As for survival it is important to continuously innovates its product
so that the company will gain competitive advantages . By the help of innovation it creates many
opportunities and help in survival and also solve many problems by various innovative methods.
There are multiple theories and applicable tolls which help innovation process. The theories help
the product growth and development and maintain a strong advantage of the products. And also
Made.com has use various innovative theories for survival and profit generation. Made.com has
innovates its product from big table furniture from fold down table as to sustain in the market for
a long run (King and Baatartogtokh, 2015).
There are majorly two type of innovation theories which are explained below-
DIFFUSION INNOVATION THEORY – Diffusion innovation theory was developed
by E.M. Rogers in 1962, is one of the oldest theory. The end result of this theory is that people
adopt new ideas and product. The basic feature of adoption is that people must understand the
idea . According to researchers people adopt an innovation have different characteristics than
the people who are not flexible for adopting the new ideas . It is important to understand the
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characteristics of the people who hinders adoption process (Zhang and et.al., 2015). In this
theory it has explained the five basic adopter categories that are explained below-
Innovation – these are the people who are flexible and are willing to adopt new ideas and
changes any time and also show willingness to adopt ideas first. Also, they are the people who
take risks and comfortable in facing new challenges and also they are very creative and also
develop new idea and skills. As they know innovation is very necessary and they are always
charges and happy to adopt new methods or product and services in the most willing full
manner . They consider as the risk taker as they are the first one who uses the product and they
are the one who bear the negative impact of the product if the product is not satisfied to the
customers. And also innovators are not bound to the traditional method as they believe in change
and adopt modern method for advancing their life. They do not depend upon the gossips and
rumours about the product they take their own decision and use the product and adopts many
changes (Hutter, and.et.al., 2015).
Early Adopter- Early adopters are known as opinion leader as they enjoy leadership
roles as they are comfortable in any give situation and also they grape change opportunity and
also solve the given problem . They knew that there is need for change and also comfortable to
work in changing environment and adopting new changes. The strategy that appeal is
information sheet as they are depended upon the information.
Early Majority – they are the people of are leader but also they are not willing or adopt
new ideas and creative skills before the average person . Mainly success stories and evidence of
the innovation 's effectiveness are the strategies which are use by this type of population. They
are people who first see the results of innovation before adopting the innovating ideas. Also, they
are dependent upon the mouth to mouth publicity as depend upon the people who have uses the
products. They are the audience which does not take any risk and not comfortable in facing the
risky situation which does not favour them.
Late Majority – these are the population which does not use innovative ideas and skills
after it has been tried by the majority. They consider as very rigid audience as they do not like to
adopt changes very fast. And after the majority audiences has uses that product and also if the
result are positive and many customers are satisfied then they show interest in change or
adopting new ideas. They are the population who believe in gossips and rumours as these can
influence there buying behaviour .
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Laggards – these are the people who has fear of adopting the new ideas as they are
bound by the traditional methods and also they are very conservative as they use the old
methods. They always doubt new methods and ideas. They also have pressure from people in the
other adopter groups. They consider themselves comfortable in traditional methods or old
products and do not welcome change in good manner (Godin , 2015).
DISRUPTIVE INNOVATION THEORY – Disruptive theory was developed by
Christensen in 1995 .It considers as most use theory . It is the key future success in
business .Disruptive innovation theory is an innovation which help to generate new ideas, skills
and also create a new market and network. There are mainly four elements of the theory of
disruptive innovation such as improving the elements of sustaining innovation , second is
sustaining innovation overshoot customers needs , the third element of disruptive innovation is
incumbents are disrupted and the last one is the disruptive elements which have capacity or the
ability to responds. They consider to be an attack on traditional business model with lower cost
solution and also with high quality products in cheap prices. It considers as risky but also it has
greater opportunity. As disruptive theory is widely use and also create disruptive impact.
Disruptive innovation are tended to produce by entrepreneurs and outsiders rather than existing
market leaders. In these unexpected competitor rise and take over the market. According to
Christensen , there are types of innovation such as-
 Sustaining innovation – Represented by better products that is company can sell for
products to its customers. Better products means good in quality and also the demand of
the product is very high. They focus on the growth and expansion of the product by
taking little steps. And always try to innovate continuously so that it improves its
products and perform better day by day.
 Low end disruptions – they served customers at the low end market and also it serves
customers the good quality of the products and generally of the lower profit margin. It
usually serves over deserved customers. It majors motive is to deliver the product of high
quality to the customer in low price . It is best for the customers who demand more but
pay less.
 New market disruption – it generally competes with non- consumption in lower margin
sector of the economy . It usually served underserved customers . it usually served for
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maases and it required heavy advertisement of the product as it is new in nature .
(Christensen and.et.al., 2016).
The second element which is most commonly use is pace of technology in which
companies develop new strategies and develop new attributes to their products. In these process
company do every possible things for satisfying the customers who are not satisfied with the
product and company will adopt new and creative ideas for satisfying and generating more
audiences. they focus on that type of population who demand more but they are able to pay less.
So they provide high quality of product in low price as to generate more customers. The third
element is difference between the disruptive ans sustaining innovation. Sustaining innovation are
that type which improve itself continuously so that to sustain in the market for a long run. They
always perform better than its previous performances. The next is disruptive performance in
which bring products which are as good as current market products. But disruptive technology
gives better result. As if the current products prove not good enough for the customers then it
starts innovating that product for satisfying the customers (Aizstrauta , Ginters and Eroles, 2015).
2. Product Historical Development
Made.com designs and retails furniture online and brand based in London. As the
company is planning to launched new products that is Fold down table for drawing room as the
company is innovative its product as the need of fold down table generated because t is easy to
shift from one place to another and also does not require much space and it is very convenient as
compare to big furnitures as they are very heavy and can't shift easily. That is why the need of
fold down table generated as it is very easy to use. As the company uses Diffusion innovation
theory in which it has categorized five established adopters.
Innovators are the category of population in which they adopt and show there willingness
in adopting the idea of Made.com 's fold down table and also they are ready to take any risk and
they are most loved customers of the company . They show more interest in the idea. The second
establish adopter is Early Adopters in which they act as the leader and also they are comfortable
in changes so they will adopt fold down table as they are already aware of the changes. The third
category in diffusion innovation is Early Majority in which they rarely adopt changes that is they
believe in mouth to mouth publicity. They show willingness for adopting the product only if they
known the success story or if there is evidence of product effectiveness . The company has to
concentrate more on that type of audience as for attracting them heavy advertisement is
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important. The forth step is Late Majority in which they are very rigid and they do not adopt the
change and they depend upon the information in which how many people have use the product
and how many are satisfied with the product. And the last one is laggards in which they use
traditional furniture instead of innovative one as they are very traditional (Eydesdorff and
Ivanova, 2016).
Made.com firstly manufacture big furnitures which was very heavy and required huge
space then it launches medium size furniture which was convenient and then it launches tyre
table which was easy to shift from one place to another and also it is very useful for the
customers and now recently Made.com innovates its furniture as it launches fold down table as it
fold easily and can carry from one place to another . And also it is convenient to use as
Made.com has innovates its product just because of attracting more customers and generating
more demand. So here was the brief history of fold table down development (Reinhardt and
Gurtner, 2015).
Disruptive innovations are an innovative concept that helps company to enhance the
market approach to increase the company value. Eventually it disrupts an existing market and
value network. As per the research, it has been the most influencing business idea taken by the
companies in the early 21st century. The main concept behind disruptive model is to present
different range of product or services with set of distinct values which overtake the existing
product or services. Such as Made.com has launching Foldable wooden table for drawing rooms
which is quite unique concept or product in the market. This is the new product with existing
normal product that contained different USP product quality that helps to attract number o0f
customers. In other words, this concept of innovation which define that technologies that are not
truly disruptive. For an example: Internet was disruptive because it was not a repetition of a
previous technology.
For an investor to understand this concept of innovation is quite difficult. It requires full
focus or understanding about the new product launching by the company.
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Figure 1: Disruptive Innovation Model
(Source: Disruptive Innovation, 2019)
The main aim of the innovation is to keep potential customer retained in the company as
long term manner. It brings high opportunity for the company to analyse the market into more
higher manner. Frequent innovation in the company will make good impact on the market
growth and the future advancement for the company as well. By innovating Foldable wooden
table for drawing room has been given positive impact on the company sells and also increasing
the company reputation in the market. It will also help to restrained the market into more
advanced manner. Company should adopt this model as in sustaining innovations at the higher
tiers of their markets because this is what has historically helped Made.com succeed. In other
words, this system of working will also help to accomplish the customer needs and demand for
the new innovation process or goals. Besides, it is very necessary for the company to get new
management target goals and enhance the company existing performance.
Future possible development Pathways
The another important aspect of disruptive theory is allowing the organisation to maintain
a strict advantage of growth and development in achievement of set goals and requirements
leading to innovation. For example, Made.com while making use of disruptive concept is going
to make use of Horizontal Innovation Funnel. The horizontal innovation funnel is explored
below:
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(Source: Traditional purchase and innovation funnel, 2018)
The current innovative product of Made.com is foldable wooden table for drawing room.
This product is proven as an essential one for the current market needs of the consumers looking
for wooden products to enhance their drawing rooms (Hutter & et.al., 2015). The first process to
gain a strong advantage of the consumer as per the innovated product is the consumer acceptance
to evaluate the success and growth of the innovated product. Below mentioned are the steps as
per the innovation funnel to attract consumers along with understanding their requirement
towards the new product:
 Awareness: This is going to be the first step of the company to increase its customers
loyalty and understanding towards the new built products. The organisation in order to
make its innovation a success and gain an understanding towards what requirements its
products need will be developing a certain awareness of its made product. For example,
in order to understand the consumer requirements and tell about the new product the
organisation is going to make use of effective practices such as advertising, promotion
etc. to deploy its products and services in the market.
 Familiarity: The organisation is going to increase its products familiarity in its initial
stages of product development. In order to do this, Made.com will evaluate the certain
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Illustration 1: Traditional Innovation and Purchase
funnel

aspects which a wooden furniture needs in order to establish required growth and
development (Ekdale and.et.al., 2015). Better familiarity of the products which is going
to be innovated will help the consumers to evaluate that the innovated products is as per
the needs or not. Along with it, it will make the organisation stand apart to produce
products and services which are fulfilling consumers needs and demands. Better
familiarity tends to create an advantage of building products and services which are going
to allow consumer satisfaction and receive maximum growth for Made.com.
 Consideration: It is important for the organisation to take important consideration in
context while innovating its new products. The important considerations are going to
include in what manner the products should be made so that it fulfils the needs and
demands of the consumers and ensure their satisfaction along. Along with it, its is
important for Made.com to evaluate the essential aspect of development and growth
which is necessary for its growth and development. The consumers expectations while
deploying the furniture products also needs to be considered by the organisation in order
to ensure growth and success of the product.
 Purchase: The purchase factor is going to determine the value and understanding of the
products in the market. It is going to bring effective growth to the organisation and will
increase its innovations capability. The overall market needs and developments will be
enhanced from the products needs and requirements. It is going to help the organisation
in developing its overall capability to sell its innovated products in the market and ensure
better innovation after taking the required feedback from the clients.
 Loyalty: The loyalty of the consumers will provide Made.com with and understanding as
how the products and services will be made in order to create necessary growth and
advantage (Aizstrauta, Ginters and Eroles, 2015). The overall product development
capacity will increase the organisational growth and the set loyalty will develop the
advantage of consumer growth and retention. These all factors are going to build better
growth within the organisational environment and are going to ensure better product
development.
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CONCLUSION
The below report identifies the importance of innovation and in what ways innovation
can be used to achieve set growth and advantage in an organisational environment. The report
enhances the product development strategy used by Made.com to gain better growth and
advantage. Important decisions made by the organisation in order to innovate its new product in
the market is explored in the report. The report showcases both diffusion and disruptive
innovation theories in context of developing the appropriate product for the organisation and
achieve and maintain required growth and development. Along with, it explores different
dimensions in which the organisation is developing its products and services to attract the
consumers and in what manner the products are made in order to achieve success within the
business environment.
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REFERENCES
Books and Journals
Aizstrauta, D., Ginters, E. and Eroles, M. A. P., 2015. Applying theory of diffusion of
innovations to evaluate technology acceptance and sustainability. Procedia Computer
Science.43. pp.69-77.
Christensen, C. M and.et.al., 2016. Competing against luck: The story of innovation and
customer choice. Harper Business.
Christensen, C. M and.et.al., 2015. What is disruptive innovation. Harvard Business
Review. 93(12).pp.44-53.
Ekdale and et. al., 2015. Making change: Diffusion of technological, relational, and cultural
innovation in the newsroom. Journalism & Mass Communication Quarterly. 92(4).pp.938-
958.
Godin, B., 2015. Innovation contested: The idea of innovation over the centuries. Routledge.
Hutter, M and.et.al., 2015. Innovation society today: the reflexive creation of novelty. Historical
Social Research.40(3).pp.30-47.
King, A. A. and Baatartogtokh, B., 2015. How useful is the theory of disruptive
innovation?. MIT Sloan Management Review. 57(1).p.77.
Leydesdorff, L. and Ivanova, I., 2016. “Open innovation” and “triple helix” models of
innovation: can synergy in innovation systems be measured?. Journal of Open Innovation:
Technology, Market, and Complexity. 2(1).p.11.
Nagy, D., Schuessler, J. and Dubinsky, A., 2016. Defining and identifying disruptive
innovations. Industrial Marketing Management.57.pp.119-126.
Reinhardt, R. and Gurtner, S., 2015. Differences between early adopters of disruptive and
sustaining innovations. Journal of Business Research.68(1). pp.137-145.
Zhang, and. et. al., 2015. Using diffusion of innovation theory to understand the factors
impacting patient acceptance and use of consumer e-health innovations: a case study in a
primary care clinic. BMC health services research.15(1).p.71.
Online
Disruptive Innovation, 2019. [Online]. Available through:< http://claytonchristensen.com/key-
concepts/>.
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Traditional Purchase and Innovation funnel. 2018. [Online]. Available through:
<https://www.presentationgo.com/presentation/category/charts-diagrams/shapes/funnels/>
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