Impact of Innovation on Business Wealth: A Detailed Report

This report delves into the crucial role of innovation and creativity in driving business wealth. It begins by outlining the innovation process, detailing idea generation, screening, prototyping, commercialization, and implementation. The report then differentiates between incremental and disruptive i...Read More

Creativity and Business Wealth

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................2
Critical understanding of the innovation process........................................................................2
Difference between incremental and disruptive innovation........................................................3
Evidences....................................................................................................................................5
CONCLUSIONS..............................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Innovation and creativity in an organisational operations are central in attaining the
business wealth. Along with implementing various initiatives and new idea, the organisation are
also required to manage them effectively (Ma, Sian Lee, and Hoe-Lian Goh, 2014). In present
time, all the businesses do understand the value of innovation for their organisation. However, it
should be recognised that the chosen or framed strategy should be effective for the business
growth. This report covers a detailed process in which innovative ideas can implement in an
entity. Further, difference between incremental and disruptive innovation will be discussed in
this undertaking. In addition to this, evidence of research are provided along with relevant
examples.
MAIN BODY
Critical understanding of the innovation process.
Many market leaders acknowledge the importance of Innovation in business. As said,
“Innovation is key to success”, a company growth depends on the susceptibility to new ideas.
Innovation mean to generate or shuffle out something different, something new keeping in mind
the present as well as the future scenarios. It not only ensures the growth in existing market, but
besides open new arena for performing incredibly & become a market leader. Innovation is the
result of efforts applied constantly, day & night, not by an individual, but rather a team to
achieve something new & extraordinary (McMullen, and et.al., 2015). It is an task intensive
process & requires detailed work out to come up with an innovative idea. Development of an
innovation takes Idea generation/ mobilisation, Screening or discussion, Prototyping &
experimentation, Commercialisation & Implementation. Further, in case of transportation
services the introduction of Internet services is quite helpful in terms of brining the promptness
and tracking the supply of any material, goods or services to the end consumers
The process of idea generation can be considered as sowing a seed. Idea generation is
achieved out by sheer analysis of existing idea & finding out its drawbacks or loopholes. Once
the problem is been identified, innovative ideas can be generated & mobilised through various
logical & physical methods to find out its efficiency as a service or product. Companies should
have an facility for supporting the idea generators or innovators. After the idea is been generated,
it is presented to a core team of experts for discussion & analysis. The discussion within a team
not only helps in getting the idea more refine & precise, but also gets the primary feedback to an
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idea. Many times, a idea generator don't have the skill to present the idea. So discussing it with
team helps in better explanation of the idea. Businesses should include the practice of screening
to improve chances of innovation.
According to the views of Nan, Zmud, and Yetgin, (2014), after the idea is been
discussed & analysed, a rough model or a prototype is been developed to test its feasibility in
practical conditions. This is the phase where the real testing of the innovation occurs. The testing
helps in deciding the implementation of further efforts in development of the idea. Besides this it
also helps in analysing the changes or modifications to be made in the prototype. Companies
should keep on working on the prototypes to improve its product quality. Now once the
prototyping is done successfully, the idea is further more sent for the commercialisation to test its
success. It involves the processes like large scale manufacturing of product, marketing &
launching of the innovative product. Businesses should understand that the success of a product
well marketed cant be denied (radical innovation, 2017). After the idea is well commercialised,
its been launched in market for the implementation by the customers. The customers will
purchase, use & provide with the feedbacks that helps the company to gather an idea of current
market trend as well as customers reactions towards the newly launched innovation. Based on
the feedbacks received experts predict the success or failure of an innovation & the businesses
get idea for making further improvements in functioning & quality of the new innovation..
In contrary to this, as per the views of Nan, Zmud, and Yetgin, (2014), occurrence of
innovation process in the business increases the expenses and affects the finances of the
organisation. A complete procedure to introducing and implementing new ideas in the firm
involves various operations. These steps thus require a certain amount of money and other
resources. Further, it has been added that the accomplishment of the process requires so much
time as there are so many activities under this implementation programme. This harms the time-
effectiveness of the entity which in turn impacts upon work productivity.
Difference between incremental and disruptive innovation.
According to Bouncken and et.al., (2017), organisations are required to introduce
incremental innovations in the businesses. These are the series of small improvements that are
made to the existing products and services of a company. These are focused on the needs and
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demands of the consumers. This research helps in altering the previously present strategies in
effective manner. There are various benefits of having increment innovation in business. Firstly,
the changes are made to the already existing products so the cost for the new development gets
reduced. In addition to this, the organisation that undergoes incremental innovations does not
bring huge changes in the function rather they are aimed on altering a little bit at a time. This tool
can also be regarded as a cost cutting or feature improvement tactic used by the entities in
existing products or services (Smismans and Stokes, 2017). The popularity of incremental
innovation is also due to the fact that there are less risks associated with the use of this tool than
other methods. However, there are some consideration while undergoing addition of creativity in
the products such as the modifications should be relevant to the consumer choices. Alterations in
the products and service should be effective in ensuring competitive advantage for the
companies. Besides this, the changes are required to be intended on the reduction of cost. There
are various renowned firms with strong brand recognition that believes in incremental
innovations. For instance: Coca cola, Cadbury, Gillette, Salisbury, etc.
To have growth in the organisational aspect, there is need to have perfect or adequate
innovations which in turn can be relevant with the product or method of performing various
business operations. Hence, in accordance with the disruptive innovation, it impacts over the
market and economic functioning of various organisations in environment. However, these are
innovations which can be determined by analysing its impacts over operational aspects of the
firm (Bouncken and et. al., 2017). Thus, as per the implication of the new technologies which in
turn affect the operational as well as economic environment such as bring competition,
challenges as well a make reforms in the performance of individuals. Hence, in terms of fighting
such challenges the organisations seeks to develop various methods to be successful such as
bringing the substitute or duplicate products as well as reduce the cost of such commodities.
However, the focus lies over attracting consumers or creating demand of such innovative
products which in turn reflect in improving the brand image in market.
In the current era there has been influence of such innovation which in turn affecting
various nations to make the adequate changes in their economic standard, technological
knowledge as well as in the educational level. However, in Europe and USA the government as
well as various Ozone friendly organisations are planning improve the knowledge in citizens as
well as take necessary steps to lower down the rate of pollutions in the country. Thus, main
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reason behind pollution is vehicles and oil consumption by them which in turn affecting
automotive market (Disruptive Innovation: Implications for Competitiveness and Innovation
Policy, 2012). Hence, innovation took place like switching them from ICE engine to electric
engines as well as reducing weight of cars such as using light-weight material which in turn
increase efficiency of vehicles. Nowadays there has been various electric vehicles which are
available in the environment but are expensive and not being easily affordable by the consumers
(Smismans and Stokes, 2017). Thus, it can be said as to improve the awareness in consumers
towards pollution control so they can be able to understand the importance of such innovations.
Evidences
In terms of having innovative changes in the economy or the corporations China is
playing the main role in making the effective innovative products more than any other country.
Hence, the rate of pollution is higher over there with is due to numbers of industries and
manufacturing units are planted in that country. The government of China has decided to launch
more than 500,000 electric cars and other vehicles in the coming years. Hence, the country has
owned more than 90% of magnetic raw materials which are being used for manufacturing the
most kinds of common type electric engines which are adequate for the country to gain the better
position in the competitive market (Forés and Camisón, 2016). Hence, it can be said that due to
such positive changes the country would be able to have favourable growth in economy as well
as they can have effective development in market.
However, apart from the market innovative changes in the products there were reforms in
the services industries too such as internet and tourism. Hence, the biggest innovation in the
services sector was the introduction of internet in the 1990s which in turn positively affect
people and brings the improvements in the knowledge and the promptness in delivering any
message to people in within a second (Chan and Parhankangas, 2017). Thus, with the help of
introduction of the internet in the current era has brings benefits to traveller, industries and
manufacturing units as well as in many other sectors such as education, hospitality, medical etc.
which in turn have the adequate improvement as well as changes in the operational activities.
Moreover, in terms of transportation and logistics service industries the ICT (Information and
communication technology) have the innovative changes in the making the prompt delivery of
the products and services as well as maintaining the supply chain. Initially they have brings the
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reforms in having the adequate services like facilitating status of the product or services which
are being dispatches, shipped or delivered to end consumers.
In terms with promoting the business operations on the basis of online marketing there
has been various examples for radical innovations such as Amazon. Thus, this company is
established for the motive of providing the various categories of the products to the individuals
such as clothes, electric goods, accessories and products which are used for the daily house hold
purpose (radical innovation, 2017). Hence, the company have brought reforms in the online
marketing as it become the largest organisation which is operating the online business
throughout the world. Therefore, it can be said that such operational activities has being changes
in the entire business models as well as increase the interest in consumers to make the purchase
of goods and services or the online basis. Hence, it can be said that the innovations must be
introduced in context of making development in the environment as well as such innovative
ideas must be unique or creative which in turn helpful in creating the consumer awareness as
well as improves the business profitability. Hence, the changes were adopted as per the
requirements of consumers as well as the changes in the climate conditions which encourage
people to make the innovative ideas.
CONCLUSIONS
Development of the innovative ideas and the creativity in the current era is highly
required by country in terms of bringing the adequate changes in the economic environment as
well as in the climate of such nation. However, it can be said that China, Europe and USA has
adopted the importance of the changes in engines installed in the cars or vehicles as well as
creates the public awareness for the development of such products. Further, in case of
transportation services the introduction of Internet services is quite helpful in terms of brining the
promptness and tracking the supply of any material, goods or services to the end consumers.
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REFERENCES
Books and Journals
Bouncken, R. B. and et.al., 2017. Coopetition in new product development alliances: advantages
and tensions for incremental and radical innovation. British Journal of Management.
Chan, C. S. and Parhankangas, A., 2017. Crowdfunding innovative ideas: How incremental and
radical innovativeness influence funding outcomes. Entrepreneurship Theory and Practice.
41(2). pp.237-263.
Forés, B. and Camisón, C., 2016. Does incremental and radical innovation performance depend
on different types of knowledge accumulation capabilities and organizational size?. Journal
of Business Research. 69(2). pp.831-848.
Smismans, S. and Stokes, E., 2017. Innovation Types and Regulation: the Regulatory Framing of
Nanotechnology as “Incremental” or “Radical” Innovation. European Journal of Risk
Regulation. 8(2). pp.364-386.
Ma, L., Sian Lee, C. and Hoe-Lian Goh, D., 2014. Understanding news sharing in social media:
An explanation from the diffusion of innovations theory. Online Information
Review. 38(5). pp.598-615.
McMullen, H., and et.al., 2015. Explaining high and low performers in complex intervention
trials: a new model based on diffusion of innovations theory. Trials. 16(1). p.242.
Nan, N., Zmud, R. and Yetgin, E., 2014. A complex adaptive systems perspective of innovation
diffusion: an integrated theory and validated virtual laboratory. Computational and
Mathematical Organization Theory. 20(1). pp.52-88.
PDF
Disruptive Innovation: Implications for Competitiveness and Innovation Policy. 2012. [PDF].
Available through
:<http://innogrips.empirica.biz/fileadmin/innogrips/documents/01_policy%20briefs/
ig_policybrief_4_disruptive-innovation.pdf>.
Online
radical innovation. 2017. [Online]. Available through
:<http://searchcio.techtarget.com/definition/radical-innovation>.
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