Exploring the Importance of Innovation in Business Development

This essay highlights the critical role of innovation for organizations, emphasizing its impact on growth, development, and market position. It argues that innovation is essential for maintaining a competitive edge, citing Amazon as an example of a company that continuously innovates to retain its leading position. The essay further explains that innovation applies not only to products but also to services and processes, enhancing their effectiveness and adapting them to market conditions. Examples such as the evolution of promotional campaigns due to the internet and advancements in manufacturing processes through technology are provided to illustrate this point. The essay concludes that organizations should encourage employees to generate new and creative ideas to gain a competitive advantage, with Desklib offering additional resources for students.

Running Head: Innovation
The Importance of Innovation

Innovation 1 | P a g e
1. Why it is important for organizations to be innovative?
Innovation and creativity are two crucial concepts for an organization through which constant
growth, overall development and other objectives could easily be attained. Along with this,
innovation helps the organization to retain its position amongst the target market. With the help
of innovation, organizations could easily develop its effective image in the target market which
directs the organization towards attaining competitive edge over other companies in the industry
(Birkinshaw, Hamel & Mol, 2008). For example, Amazon is one of the behemoth players of
online retailing industry and in order to retain their acquired leading position, organization
constantly tries to update their products and services along with introducing innovative and
creative products and services for retaining customer’s interest in the organizational products and
services. Amazon’s latest and new products are Amazon Prime services under which they
provide entertainment content to their users. Apart from Prime Services, organization is now
planning to introduce drone delivery system through which consumers will be able to get their
ordered products up to 5 pounds within 30 minutes from the time of placing the order. Drone
delivery is yet in beta testing and it is tested in Cambridge and in the UK. With the help of drone
delivery system, organization would be able to expand its market share in the target market along
with enhancing its revenues, sales and profitability. Thus, innovation and creativity, both are
crucial concepts for an organization and in relation to this; every organization should promote
and encourage their employees to think out of the box in order to generate new and creative ideas
for the objective of gaining competitive advantage (Varis & Littunen, 2010).

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2. Why it is necessary to acknowledge that innovation applies not only to products but
also to services and processes?
Yes, the above statement is true because innovation helps in enhancing the effectiveness of
products as well as of services. Innovations are sort of new ideas through which effectiveness of
existing products and services could be enhanced as well as make it as per the latest market
conditions and consumer’s demands and wants (Sawhney, Wolcott & Arroniz, 2006). For
example, business entities were used to promote their products and services through traditional
approaches such as newspapers, magazines, board hoardings, etc. till the time, internet and
globalisation were introduced in the business markets. After introduction of internet and
globalisation, promotional campaigns of the business entities have entirely been changed. Social
media platforms, email marketing, search engines, third party website promotions and many
more are innovations of internet which have helped the business corporations to expand their
businesses by promoting their products and services in various markets with the help of digital
promotional tools. Thus, innovation of internet is a type of service through which various
platforms of promotion and advertisement have been introduced through which organizations
have expanded their businesses in the domestic as well as in international markets.
Apart from this, innovation also applies in the processes such as back in 1970s and 1980s;
traditional approaches were followed in businesses for executing manufacturing related
activities. Mainly, manual techniques were used whereas, with the help of innovation in
technology, advanced machineries have been introduced through which manufacturing activities
could be easily be executed along with higher productivity. Thus, innovation could be applied in
products, services as well as in processes (Harris, 2015).

Innovation 3 | P a g e
References
Birkinshaw, J., Hamel, G. & Mol, M.J. (2008) ‘Management innovation’, Academy of
Management Review, 33 (4), pp. 825-845.
Harris, J. (2015) ‘Making it Real: Enterprise and Innnovation’, Sage.
Sawhney, M., Wolcott, R. & Arroniz, I. (2006) ‘The 12 different ways for companies to
innovate’, MIT Sloan Management Review, 47 (3), pp. 75-81.
Varis, M. & Littunen, H. (2010) ‘Types of innovation, sources of information and performance in
entrepreneurial SMEs’, European Journal of Innovation Management, 13 (2), pp. 128-154,
Emerald Insight [Online].