Managing Innovation: Theories, Application, and Future Development

This document explores the theories of managing innovation, including the diffusion of innovation theory and disruptive innovation theory. It discusses the application of these theories in the context of Made.com, a company in the retail sector. The document also explores the historical development of products and services, as well as the future development of innovative products and the use of technology like NFC and robots. Overall, it highlights the importance of innovation in managing a company's profits and enhancing customer satisfaction.

MANAGING
INNOVATION

Table of Contents
INTRODUCTION...........................................................................................................................1
Innovation Theories................................................................................................................1
Disruptive Innovation Theory................................................................................................5
Innovation history of company...............................................................................................5
Historical Development of Products and Services.................................................................6
Future Development of Products and Services......................................................................6
Application of theories...........................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Innovation is the most important and essential factor which is helpful in managing the
company’s profits. It is essential for the company to manage the functioning of the company and
enhancing the number of customers. With the help of this, maximum benefits could easily be
gained by business company through fulfilling all the needs and demands of customers. Through
focusing upon a range of factors, innovation can easily be brought in among products or services
that a particular business organisation is offering to the consumers. The company considered in
this report is Made.com. Organisation is performing business within the retail sector and offering
customers with furniture along with housewares and these are all being sold online across United
Kingdom and in Europe as well (Helper, and Henderson, 2014). Along side this, organisation is
headquartered at London, United Kingdom. Report is going to be enclosed with various
innovative theories as well.
Innovation Theories
Innovation is defined as one of the major factor which is required by the companies for
enhancing the the sustainability of the company in market. When a new innovative product is
launched by the company like in Made.com, customers are more attracted towards that product.
Result full for enhancing the the service and product quality which company is offering.
Novation is involved in the strategic management of the company e and helps to build customer
loyalty and trust. Competitive advantages another factor which is enhanced by using the the
innovation technique in products. The company naming Made.com is putting efforts for
expanding the business and adopting a new innovation that will help in providing best quality
product to the customer. Research and development department of the company e is helpful for
taking care that what type of products should the company be considering and innovating for
maximizing profits. Good market research is conducted by the researchers and marketers of this
company to analyse what are the needs and demands of customers from the company. In this
way, their demands are fulfilled by bringing those innovations which they required in the
product. There are following type of innovation which are implemented by made.com. some of
these are mentioned below-
Diffusion Of Innovation (DOI) Theory
1

The diffusion of innovation theory was given by EM Rogers in the year 1962. This is an social
science theory according to which innovation is the most essential factor that was helpful in in
maintaining success of company within market. Different individuals are having their own
opinion regarding any new concept or idea (Noble, 2017). They have their own perspective and
views on any discussion. Similarly, they have their own perspective about what they required in
a product or service. Individuals of different areas have there on requirement for novation in
product or service. It is very delicate idea for the company to analyse Idea, behaviour and
perspective of different individuals regarding a single product.
According to this theory, there is need of of innovation in techniques, process and product which
are offered by the company As this will help in enhancing the profits earned by the company.
Renu technologies or innovative products are launched in market, there are several individuals
are customers who you like that innovative product within very less time. On the other hand,
there are some customers who do not like new innovative products and they want to have the
experience of earlier version of product. So this is a dilemma for the company whether to use
the innovative product or not. Ideas and perspectives of different individuals towards two
innovative product are different. The company chooses concept of majority while taking
decisions that new innovation for innovative product is liked by the customers or not. Made.com
will have to analyse the behaviour of customers towards new innovation that is robotic assistance
at stores.
From the above theory it is concluded that there are various companies which are expanding
their business effectively and this will help them to earn more profits and money in market.
Basically five adopter categories of the diffusion of innovation theory and some of these are
mentioned below-
Innovators - these are defined as those individuals who take interest for adopting the new
innovation offered by the company. These people are are good acceptors and they have full
enthusiasm for approaching the new product or service. these are having good knowledge about
the new technology and how it can enhance the functioning of daily activities. these people have
high tolerance capacity and they are always looking for new technology features brought within
market. Made.com can use this technology for analysing the risk factor of failure why launching
new products in market.
2

Early majority - It is important for any individual to analyse innovative ideas. Not all
innovations are bad for the customer and these are helpful in in analysing the situation by which
good tasks can be done. Innovative ideas are important and these are are adopted by various
people of early majority group. These people take more time for evaluating the the market
situation and then slowly e they go for new innovation (Goolsbee, and Krueger, 2015). People
are going forward for bringing new innovation which will help in success of the company.
Early adopters – these are defined as those individual are having more choices of innovation
than the innovators. These people comes under the category of opinion leaders and these are
good opportunities for adopting potential products which will help in giving strategic edge
within the company. It is important for the early adopters to analyse change and enhance
appreciation for innovative processes and ideas. There are various strategies which are helpful
for a company to know the manual way for informing the data and information to other
customers. Made.com is an organisation which can adopt this type of approach for remaining and
market for longer period and maximizing it's profit.
Late majority - according to this, it is person belonging which is causing sceptical for adopting
the new innovation. These are helpful for adopting innovative processor practice for analysing
the favourable outcomes. These are helpful for adopting the majority of individual's choices.
There are various strategies which are used for targeting the potential customers and analysing
the provision of data which is associated with the number of individuals who are using this
innovation effectively.
Laggards - these are defined as those individuals who adopt innovative practices process by
traditional thinking and conservative ideology. These people are sceptical. It is not easy to
convince this for adopting innovation in proper manner. It takes lot of time to make these
individuals adopt the new innovation. there are various factors which are formulated for these
people which will overcome the fear that these are facing before adopting the new innovation.
3

(Source: Diffusion of Innovation Theory, 2019)
From the above mentioned theory, it is concluded that there are different levels and stages which
are used within this approach. It is known as the approach used by individuals for knowing
whether the innovation is good or bad (Dodgson, 2018). It is important for the companies to
analyse that whether the innovation comes under which category from the all stages including
innovator, early adopters, laggards, late majority or early majority. It is essential for bringing the
new innovation in product so that it is easy to analyse the factors which will impact the business
of made.com. there are various factors considered while making the new innovation. Some of
these are described below -
Relative Advantage: This affects the innovation for making the company to evaluate the
factors which will help in making profits and money. Innovation must be able to analyse what
are the factors that will help in observing the services and products in better manner by the
made.com.
Trialability: This factor suggests that there is no extinction to the innovative service or product.
It is important for the company to analyse the latest technology that can be used in the processes
for maximising profits (Greer, and Hauptmeier, 2012).
Compatibility: This refers to the extent to which an innovation is consistent with the
requirements, needs, values and desirability of potential adopters.
Complexity: This factor suggests the way of innovation. It provides information about the
extent by which customers will like the new innovation. This is helpful in analysing the
profitability and productivity of the innovative product or service.
4
I
llustration 1: Diffusion of Innovation Theory

Observability: This explores the extent to which the innovative idea or process provides
such benefits which are visible to others (tangible).
Disruptive Innovation Theory
This theory was given by Clayton Christensen in the year 1997. According to the thinking of this
person, innovation is the best method that a company can adopt for maximising it’s profits and
sales. The new and innovative products are sold more than the existing products of the company
(Jurkovic, and et. al., 2015). In context of the Made.com, it is considered that there is need of
providing new and innovative products so that there is development of own value and
importance. This theory suggests that it is important for the company that new innovation will
bring the company in more competitive advantage for the organisation. This is helpful for the
organisation for developing good image and reputation within market. This theory mainly
focuses on the technological aspects of the working of an organisation and bringing new
innovation in product.
On the other hand, if it is talked about disruptive innovation theory, innovation takes
place within any company in the way of a process. In the early stages of product or process
development, goods developed using disruptive technology tend to serve only a niche market
which values their non-standard performance attributes. As per this theory, market disruption
occurs only when new yet inferior products developed as a result of disruptive technology
displace the mainstream goods irrespective of their superior performance.
Innovation history of company
Made.com was a company that was launched in the year 2010 and this company was a e-
commerce organisation which was offering furniture and similar products to customers through
online delivery. This company provided good quality furniture across UK. This company used
cost cutting approaches for delivering of furniture and other products to potential customers and
clients. This company was also having a manufacturing unit in the workstation in which workers
work on the basis of uncertainties (El-Refaie, 2013). The main reason behind success of this
company was it's focus on innovating the products and services it is providing. This company
uses technology naming NFC. This was given by cloudtags. NFC chips are provided in each and
every product that the company manufactures which helped this company for becoming a good
brand in the E-Commerce retail industry. This has provided opportunities for this company to
develop good marketing reputation and have a large number of potential customers. This
5

company followed the aspect of innovating the products and has captured various customers
towards buying the products and furniture of this company.
Historical Development of Products and Services
There are different products and services which are offered by Made.com. this company
emphasises on various types of innovation for promoting the products offered. This company is
using a new type of technology naming NFC. This has affected the way in which customers are
provided quality furniture products (Acharya, Schaefer, and Zhang, 2015). This company is
using latest technology while providing products and services so that it will enhance the
customer satisfaction level. The company’s strategy for using new and latest technology within
it’s manufacturing and delivering process has helped in building customer satisfaction.
Made.com provides furniture and other products both offline as well as online platform. This
company has utilised the new technology and resources for attaining success in market. It is
important for this company to maintain good reputation among the customers so that goals and
targets can be achieved in less time. The NFC technology has helped this company to manage
work in an effective manner and earn profits and money. Made.com is an organisation which is
using latest technology for raising the quality of products and services it is providing to the
clients and customers.
The scanning technology NFC is helpful for made.com in such a way for knowing when
the product was developed, and on what date it was assembled. This helps in knowing what was
the way for utilising the development of product. It is essential for the company to manage the
functioning of the company by using the resources in effective manner and innovating the
products it is offering. This is helpful in maintaining the product is effective manner. This is very
important for achieving the needs and requirements of customers. The scan on products is
helpful for managing the experience of clients and customers in an effective manner.
Future Development of Products and Services
It is very important for various companies and business organisation to have continuous
improvement of products and services and innovation in them for attracting customers towards
buying it's products. Made.com pizza company which is involved in providing furniture and
similar products to customer and the main focus of this company is to innovate the approaches in
which customers are provided products. Artificial intelligence is one of the major factor which is
6

involved in obtaining success within Market by providing the products effectively to the clients
as well as customers (Pound, 2013). the new innovation that this company can adopt is use of
robots and various physical stores. Use of robot will help in managing and handling store work
in less time. National also help in developing competitive advantage within market. Robots can
also take digital feedback from the customers so that company will know what kind of furniture
or other products are required by the customers.
Application of theories
Diffusion of innovation theory suggest that it is important for any company into Bank
innovations in product so that it will be easy to attract more number of customers and make them
to buy the new and innovative products. it is very important for the customers to become familiar
with the latest technology that the companies providing so that they can take full advantage of
the technology that this company is providing. Made.com is using both technology that are NFC
and cloud tags which is helpful for the customers to analyse the latest technology which will help
in making high profits and money. There are various factors which affect the the innovation
within market. Some of these are mentioned below
 Relative advantage – Made.com words using a a very innovative technology that will
help in company to capture market of London in less time. This company uses new
innovations and technology for providing product to customer and this is helpful in
making it competitive within market. The new technologies used are helpful in providing
information about the best time on month in which sales of the company will be highest.
 Compatibility - by using cloud tags and NFC, it is easy for the company for attracting a
number of customers and providing them good quality furniture. This technology helps
the customers to take information on their tablets about the furniture a product that they
are buying or they are searching for. The new innovation which is done by made.com is
using robots for providing assistance to customers while purchasing of furniture and other
products. These robots will be placed in different stores of the company.
Complexity - there are various people who believe in past and according to them innovation and
new technologies are not providing effective services and products. Such type of people are not
potential customers and they can influence the potential customers who can buy the product
(Grandori, ed., 2012). Complexity e with made.com was that it was not having sufficient
7

resources which will help in in gaining competitive advantage in market. By using this strategic
management and sustainability, this organisation can easily develop profits in retail industry.
CONCLUSION
With the help of above mentioned report it can easily be concluded that, using innovation
within a company or any other business organisation can help up in gaining ample number of
competitive advantages. Along with this, it can be said that with the help of innovation company
could easily reach to to new heights where they could deliver high customer experience to
targeted consumers. On the other hand, using Diffusion of Innovation (DOI) along with the
Theory of Disruptive Innovation could help a company in managing all the innovations and aid
in enhancing overall profit margins of the company. Continuous innovative practice if followed
by the company, it will directly help them in in sustaining within the competitive market and it
will also help organisation in building customer loyalty and interest as well of customers in
regards to the products and services offered by them.
8

REFERENCES
Books and Journals
Helper, S. and Henderson, R., 2014. Management practices, relational contracts, and the decline
of General Motors. Journal of Economic Perspectives. 28(1). pp.49-72.
Noble, D., 2017. Forces of production: A social history of industrial automation. Routledge.
Goolsbee, A. D. and Krueger, A. B., 2015. A retrospective look at rescuing and restructuring
general motors and chrysler. Journal of Economic Perspectives. 29(2). pp.3-24.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Greer, I. and Hauptmeier, M., 2012. Identity work: Sustaining transnational collective action at
General Motors Europe. Industrial Relations: A Journal of Economy and Society. 51(2).
pp.275-299.
Jurkovic, S. and et. al., 2015. Induction machine design and analysis for general motors e-assist
electrification technology. IEEE Transactions on Industry Applications. 51(1). pp.631-
639.
El-Refaie, A. M., 2013. Motors/generators for traction/propulsion applications: A review. IEEE
Vehicular Technology Magazine. 8(1). pp.90-99.
Acharya, V. V., Schaefer, S. and Zhang, Y., 2015. Liquidity risk and correlation risk: A clinical
study of the General Motors and Ford Downgrade of May 2005. The Quarterly Journal
of Finance. 5(02). p.1550006.
Pound, A., 2013. The Turning Wheel-The story of General Motors through twenty-five years
1908-1933. Edizioni Savine.
Grandori, A. ed., 2012. Interfirm networks: organization and industrial competitiveness.
Routledge.
Online
Key Innovation Management Models and Theories. 2019. [Online]. Available
Through:<https://www.viima.com/blog/innovation-management-models>.
Diffusion of Innovation Theory. 2018. [Online]. Available Through:
<http://sphweb.bumc.bu.edu/otlt/MPH-Modules/SB/BehavioralChangeTheories/
BehavioralChangeTheories4.html>.
5 innovations propelling the furniture industry into the future. 2019. [Online]. Available
Through:<http://www.furnituretoday.com/blogpost/14955-5-innovations-propelling-
furniture-industry-future
9

10