Entrepreneurship Report: Innovation Theories and Hostmaker Analysis

This report delves into the concept of innovation, defining it as the process of discovering new ways to approach tasks, encompassing both radical and additive changes to products, processes, or services. The report focuses on Hostmaker, a home rental management company, as a case study, examining its application of innovation theories. The report explores two key innovation theories: the Diffusion of Innovation Theory, which analyzes how new ideas and products are adopted by different groups within a social system; and the Three Horizons of Growth, a framework for balancing short-term and long-term projects. The report provides a historical overview of Hostmaker's development and speculates on its future, emphasizing the role of technology and strategic partnerships. The report concludes by analyzing the theories and their application to the Hostmaker company's services, and how they will influence the future of the company.

INNOVATION

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
Innovation Theories....................................................................................................................1
Question 2........................................................................................................................................5
Historical and possible future development of products & services...........................................5
CONCLUSION................................................................................................................................8
Appendixes .....................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Innovation can be defined as a procedure where consist of various activities to uncover
new ways to do things (Bereznoi, 2015) . It should not be confused with creation and act as
making, inventing or producing something. The statement of innovation may states to both
radical and additive changes to products, processes or services. It is considering on major driver
of the economy and their factor lead to innovation which is considering as to be critical to
policymakers. To understand the report selected company, Host makers which is an award
winning home rentals management company. It was launched in July 2014 to growing at a triple
digit YOY. It can provide services of interior designing and help in smart algorithmic pricing
decision. The company invent and provide services of tinny house which can easily movement.
In the report consist of innovation theories which can adopt by companies and understand in
deep knowledge. Additionally these theories applied on historical development of one and more
products or services and analysis possible future development.
Question 1
Innovation Theories
To get success in business is totally depend on the self evident. It can create different
values in reference to market that will expand on the basis of get competition due to competitors.
The innovation theories applied by Host makers to analysis of historical and future development
regarding to their product and it will help to get success to launch new product in market in
effective manner. There are selected innovation theory that will help to invent new product in
effective manner and guide how to deduct their risks. There are discussed theories -
Diffusion of innovation theory
This theory was formulated by E.M. Rogers in 1962 which is known as one of the oldest
social science theories. It developed in connection due to define over time and thought or
products regarding to momentums. These are diffuses for the particular population or social
system. In the end of result, the activities relate to which people who is portion of social system,
they can follow a new idea, behaviour or good. The meaning of adoption that a person can do
something different than what they had early. For example – A person purchase new product and
use it, assume and perform a new behaviour (Chesbrough, Vanhaverbeke and West, 2014) . The
key of acceptance is that the particular people must focus on the thought, action or product as
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new or innovative. It is possible with the help of diffusion. So with the help of particular theory
focus on the tiny house design which can move easily.
Due to acceptance new idea, behaviour or products in reference to innovation of tinny
house does not occur at the same time in a social system. The particular process which can
defined that where people mainly thinking about the creation and apt to take the invention rather
than others. To conduct creation need to target population according to product like for tinny
house target to single people who can easily stay any where in their house. It is essential to
analysis about the target population and their taste & preference according to their invention. As
a result it can help to modify product according to target people to increase sales. The particular
theory has been classified into five categories and there are general group categorise into middle.
It is important to understand of characteristics of target group. At the time of promotion of
invention there are several plan of action applied to asking to the different adopter accumulation. Originator – According to this category there are consisting those types of people who
want to be the first to try the innovation. Such types of people interest in ventures and
new ideas. They believe to take risk and are often the first to create new ideas. Very little,
if anything, needs to be done to appeal to this population. Early followers – Most of the individuals are discreet when it comes to follow choices in
compare of innovators (Foxall, 2014). these types of early adopters can present to their
thought in front of leaders and clutch the change opportunities in reference to select
expected products which may assist in supporting to edge of them in the organisation. For
this they are highly aware for the need and follow the change at the place of market.
There are encouraging for invention ideas, thoughts and appropriate to do new things.
The strategies are appealing and consist of how to manuals and also information sheets
which contain data in relation to execution. Early majority – The particular group consist of those individuals who can select
effective innovation ideas as well as process in effectively way. It is compared to
adopters and innovators to constitute with majority of the market place. These are
personnel need a proof in reference to get success of in creation due to follow of any
invention idea or procedure. Different strategies can dhow impact on the people
belonging of this group where consist of evidence regarding to their effectiveness of
invention.
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 Late majority – According to this category include those people who are sceptical of
change and focus on the innovation after that it has been tried by majority. Strategies to
entreaty for the population where consist of information on how many other people have
tried the innovation and get is successfully.
 Laggards – In the category include those people who can bound by tradition and very
conservative. They are very skeptical of change and are the hardest group to carry out on
board. There are preparing strategies for appeal to population where consider of statistics,
fear appeals and pressure from people in the other adopter groups (Garud, Gehman and
Giuliani, 2014).
These stages are carrying out by individuals through following of an invention to
comprises of creating awareness for carry out innovative idea and practices, after that decide to
select the invention so for this use of the idea to test of their feasibility and activity of invention.
Eventually, noted that there are primarily due to select of innovations. There are selected
different features which can affect to single and play significant role to impact on adopter
strategies. There are defined factors to affect the adoption rate of innovation within market place
are briefly described below - Relative advantage – The are defined about the degree which can help to do better an
innovation which is seen as better than the idea, program or product it replaces. Compatibility – It is focused on the invention with the values, experiences and needs of
the future adopters. Complexity – There are considering of difficulties regarding to tinny house Triability – The extent where the company can be tested or experimented with before a
commitment to adopt is made.
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 Observability – In this segment with the help of creation get tangible result of new
product design.
Limitations of diffusion of innovation theory
There are various limitation of diffusion theory of innovation in reference to new product
which include the following -
 To apply particular theory for new product need much of evidence where consist of
adopter categories and did not arise in public health. It was not developed to explicitly
apply to accepted of new behaviours or health innovation (Heij, Volberda and Van den
Bosch, 2014).
 It does not foster a democratic approach in order to accept of a idea of new product.
 The particular theory works better with adoption of behaviours rather than stop and
interference of behaviours.
 It does not take into account an individuals resources or social support to follow new
behaviours means new product invention.
This theory successfully applied in many areas like communication, agriculture, public
health, marketing, sales, criminal justice and social work. To invention in market use particular
theory in order to categories different categories then take appropriate action. The intervention to
address problems regarding to invention of new product and promoted to people in a social
system with the goal of innovation (it is mainly based on the diffusion theory).
The three horizons of growth
This theory was developed by McKinsey & company, is a well known model for
organizations to set structure for initiatives and finding an appropriate balance between short and
long term projects as per the portfolio. The particular theory is focused on growth and
innovation. This strategy framework need to divide of goals into three various horizons -
Horizon 1 (Maintain & defend core business) – This is the first level of innovation of any
organization. It focuses on the innovation of the core business idea. The most revenue generating
products or services are the first priority of an organization to be developed or innovated. Main
objective of this level is to maintain the potential or efficiency of the essential business or
product which is main source of the cash flow. This may be in form of decreasing cost or
increasing quality of the product. One thing is to keep in mind is that these products or services
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will not always be the as productive as in today's market so it is compulsory to eliminate the
unnecessary costs and elements (Hogan and Coote, 2014).
Horizon 2 (Nurture emerging business) – Horizon 2 is the next stage of innovation in
order to upgrade or transform the business. This stage focuses on the development of existing
products on the next level to meet with preferences of next generation. It focuses on expending
the market for the upgraded products. Investment on this horizon may be profitable, positive or
neutral. This is the most difficult level of the innovation. All sales and marketing efforts lies with
this horizon. Situations and trends change over the time hence the innovation is necessary for the
essential business. These innovations may take place to comply with the expectations of the
existing customers. The investment is made on the products that may replace the existing
products within a short time period.
Horizon 3 (Create genuinely new business) – This the furthest level of innovation in
which new opportunities and thoughts are created. On this level, major part of investment is done
on research and development process. The 3rd horizon is about the learning and development of
new business ideas (Swann, 2014)
Question 2
Historical and possible future development of products & services
Innovation History of Hostmaker:
Hostmaker established itself as a Home Rental Management Business in 2014 with its
headquarters located in London, UK. With a purpose to induce innovation in the future
hospitality industry, this business mainly deals in redefining the stay experience of the customers
by providing end-to-end management service. Apart from this, the pricing strategies utilised by
the business includes employment of decision-making practices using business intelligence. Due
to the rapid advancements in technology and introduction of disruptive innovations such as
Artificial Intelligence, Augmented Reality and Internet of Things (IoT), there has been vast
improvements in the manner in which hospitality services are delivered to a business entity's
audience. Currently, Hostmaker delivers its services in 9 cities which are situated in 6 different
countries (Kung and Schmid, 2015) .
One of the main strategies adopted by the company since its inception includes the
integration of local market expertise and proprietary pricing so as to create an everlasting
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experience for the customers of Hostmaker. As the business model of Hostmaker is founded on
the concept of Internet of Things (IoT), the company aims to induce innovation in the services
delivered by it across all its operative locations. For this purpose, Hostmaker continues to
collaborate with different organisations so as to enhance quality of service as well as customer
value. Initially the idea of Hostmaker was to eliminate the gap between the customer demand and
supply of property.
Historical development of Hostmaker's services:
Historical development relates to past activities where focus on those products and
services which can improve through particular theory. In past, company can provide rental house
services to local people and also those people who came only for business purpose for few
months. Even though Hostmaker is fairly new in the hospitality industry, the business has been
able to garner immense popularity among travellers all around the world. Initially the company
recognised itself as a full-service management company which offered offered its services to
hosts in a hotel-style setting at reasonable prices. By inspiring from the concept of Airbnb,
Hostmaker today provides end-to-end management services to its customers who are looking for
an enhanced stay experience (Laeven, Levine and Michalopoulos, 2015). For this purpose, it
looks after the listings that are made on various websites including Airbnb and helps in ensuring
that property is maintained in excellent condition. In addition to this, Hostmaker is also
responsible to overlook guest check-ins, supplying fresh hotel linen as well as for taking pictures
of various real estates that are listed on such sites. Thus, ensuring that the gap between the
service seekers and providers in an effective manner, specifically in regards to short and
medium-term rentals. At present the company undertakes extensive market research which
targets eight European cities viz. London, Paris, Rome, Florence, Madrid, Barcelona, Cannes and
Lisbon. The rationale to target these cities is the inflow of visitors that flock in such destinations
throughout the year. In order to achieve property at reasonable prices, the company offers to the
property suppliers in the form of three subscription plans which are as follows :
 Fixed: Ensures stable revenue to such suppliers. It includes services such as ensuring no
'empty' month goes by between tenants. Apart from this, it uses predictive analysis to
check how the revenue can be maximised for these parties by employing a combination
of mixed and long-term lettings.
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 Flex: Ensures stable revenue to such suppliers. It includes services such as ensuring no
'empty' month goes by between tenants. Apart from this, it uses predictive analysis to
check how the revenue can be maximised for these parties by employing a combination
of mixed and long-term lettings. However, a management fee of 12% is charged by
Hostmaker.
 Pro: Ensures flexible lettings through the employment of blended yield model and tech-
fuelled algorithms. Apart from this, it uses single and multi-city inventory management
model along with the expertise of portfolio managers and tailored interior design
packages.
Future development of products and services
Due to inflexion of time, Host makers has been continued focus on the carry out
innovation in reference to terms of products, processes and different features. To follow of ritual
of a company, it is capable for bringing up tinny house which is easily movable and people easily
live in personal apartments (Love and Roper, 2015) . It is considering as unique as well as
creative tinny house which will allow to separate apartments for living. This will let users
transform to their space for different activities like sleeping, working, entertainment all with just
the push button. The particular elements face of furniture retail industry to provide system of
different experience to motivated by customers with the usage of tripling of a specified space.
The high tech wardrobes slides features within particular system. Develop a tinny house which
can easily move and equipped with bed, desk, closet, lighting etc.
Application of theories
On the basis of Diffusion of innovation theory, apply for an innovation need for time
which can help to determine of the elements or technology and ten make a purchase. The
innovation bring out by Host Makers and in the past of
Relative advantage – The historic innovation of reduce mediators between landlord and
tenants and it will provide advantage to reduce mediator fees.
The future innovation of tinny house that hi tech apartments that aim to ease of
experience by customers and provide them space as per their personal agreement.
Compatibility - The future innovation of Host makers to provide facility to direct contact
to owner and take movable house which can help to select suitable place as per the demand of
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customers. It provides opportunity to convert their space as per the action to conduct willingly
with living and working anywhere.
Complexity – The past and future innovation can not need to advance feature into their
product by customers. It can implement on the innovation is not as a too much complex and can
be conducted by users easily due to occur of their shopping experience (Mikhalkina and
Cabantous, 2015).
Triability – The personal website and reduce mediators allow to users to collect extra
informations regarding to attribute of their products and it will help to take decision to purchase
home from direct owner. It is implementing for customers can increase knowledge regarding to
product before buying the product.
The tinny house is provide facilities to customer to select particular place as per the
requirement. The customer with the facility moulding the house and provide facility of
customization. The element can help to take on rent as per the demand and tested by customers
within the rental house (Saebiand Foss, 2015) .
Observability – The advantage of tinny house as well as focus on the house property
which is provided by Host makers to their customers thereby rendering a competitive edge and
assist to retaining of the customers for a long period of time.
CONCLUSION
As per the above report it has been concluded that innovation is a process which can help
to any person to carry out new product and services with unique and different creativity. The
particular tool can help to achieve strategies as well as advantage in competitive environment.
There are assessed theory of diffusion and growth theory in order to analysis of historical and
future development. There are analysis of application of theory in reference to company to
achieve advantages.
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Appendixes
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REFERENCES
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Economic Transition. 57(8). pp.14-33.
Chesbrough, H., Vanhaverbeke, W. and West, J. eds., 2014. New frontiers in open innovation.
Oup Oxford.
Foxall, G., 2014. Corporate Innovation (RLE Marketing): Marketing and Strategy. Routledge.
Garud, R., Gehman, J. and Giuliani, A.P., 2014. Contextualizing entrepreneurial innovation: A
narrative perspective. Research Policy. 43(7). pp.1177-1188.
Heij, C. V., Volberda, H. W. and Van den Bosch, F. A., 2014. How does business model
innovation influence firm performance: the effect of environmental dynamism.
In Academy of Management Proceedings (Vol. 2014, No. 1, p. 16500). Briarcliff
Manor, NY 10510: Academy of Management.
Hogan, S. J. and Coote, L. V., 2014. Organizational culture, innovation, and performance: A test
of Schein's model. Journal of Business Research. 67(8). pp.1609-1621.
Kung, H. and Schmid, L., 2015. Innovation, growth, and asset prices. The Journal of
Finance. 70(3). pp.1001-1037.
Laeven, L., Levine, R. and Michalopoulos, S., 2015. Financial innovation and endogenous
growth. Journal of Financial Intermediation. 24(1). pp.1-24.
Love, J. H. and Roper, S., 2015. SME innovation, exporting and growth: A review of existing
evidence. International small business journal. 33(1). pp.28-48.
Mikhalkina, T. and Cabantous, L., 2015. Business model innovation: How iconic business
models emerge. In Business models and modelling (pp. 59-95). Emerald Group
Publishing Limited.
Saebi, T. and Foss, N. J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal. 33(3). pp.201-213.
Swann, G. P., 2014. The economics of innovation: an introduction. Edward Elgar Publishing.
Wallace, D., 2017. Environmental policy and industrial innovation: Strategies in Europe, the
USA and Japan. Routledge.
Zott, C. and Amit, R., 2015. Business model innovation: Toward a process perspective. The
Oxford handbook of creativity, innovation, and entrepreneurship. 395.
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