Innovation Report: Applying Theories to Made.com's Development

This report delves into the realm of innovation management, focusing on Made.com as a case study. It begins by introducing the concept of innovation and its significance in achieving customer satisfaction and building a competitive advantage. The report then explores two key innovation theories: Diffusion of Innovation and Disruptive Innovation, outlining their principles, processes, benefits, and limitations. The core of the report applies these theories to Made.com, examining its historical development of products and services, including its business models and the application of innovation theories. The analysis extends to recommending possible future development pathways for Made.com, based on the insights gained from the chosen innovation theories. The report emphasizes the importance of managing innovation opportunities to meet customer demands and sustain a competitive edge in the market. The report provides a comprehensive overview of Made.com's innovation journey, from its historical evolution to potential future developments, all while grounded in theoretical frameworks.

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 defined as the factor or aspect of business which is the most essential
element for obtaining customer satisfaction. It is important that all the companies should
innovate their products and services in order to attain success. the most important and essential
factor which is helpful in managing the company’s profits. Innovation is the only factor which
has to be used effectively for building competitive advantage of an organisation (Helper, and
Henderson, 2014). It is essential for the company to manage the opportunities for innovating
products and services so that they are able to develop competitive advantage within market. It is
also important for different organisations to use innovation theories for managing the business
functions properly and meeting the demands and needs of customers. Innovation is known as the
factor that is helpful for increasing profits and sales of the company and gradually market
reputation of the company can be enhanced.
Innovation Theories
Innovation is essential factor that is adopted by various organisations to sustain in market for
long period. Innovative products are more valuable than the existing products as they are having
additional features which are helpful for the customer or client. For any company, there is a
stage that comes in which the present product which their selling needs to have an additional
service or requirement which can enhance they value of the product which they are offering.
Innovation is related to the process of strategic management and it is also helpful for increasing
the customer loyalty and engagement. Another benefit of innovative products and services is
having a competitive advantage. This means that if any addition is done to the existing product
then its value and purpose will be enhanced. In this way, companies can develop good reputation
among the market. Organisations can bring innovation in their product as well as process (Noble,
2017). This is helpful for enhancing the needs and demands of customers. It is directly linked
with maximization of profit and sales. Innovative products can be sold by the company at higher
price. Customers and clients will be attracted towards the new product which is having additional
feature. Made.com is an organisation which focuses on innovating the products and services in
order to enhance profits and sales. It is helpful for the company to manage the research and
development activities for innovating the product and enhancing the services offered by the
company. The demands and needs of customers are achieved by innovating the existing product
1

or service of the company. The different type of innovations that can be used by Made.com are
listed below-
Diffusion Of Innovation (DOI) Theory
The definition of innovation theory was given in the year 1962 by EM Rogers. According to
theory, innovation is the most important factor for the company’s success. It is a social science
theory in which it is specified that innovation plays an essential role for managing the
profitability of any company. This theory states that there are different opinions and ideas as well
as thinking of various people who are using the innovative product (Goolsbee, and Krueger,
2015). What is important for a company that it is providing innovative product so that they can
attract more number of customers towards their product. People have their own ideas and views
or different issues and topics. In the same manner, all individuals have their own requirement
that can be added in the product or service. It is very difficult for a company to evaluate idea and
behaviour of different customers for any product. This can be explained with an example i.e. if
there are four people and they have to choose ice cream flavour which day prefer. According to
this theory, all these four people will have different ice cream flavours. This shows that it is
difficult for the company to choose which ice cream flavour has to be innovated. In such cases,
companies have to to do depth analysis of customers for increasing the sales and profits. This
theory explain that any company should have innovation in process, products and techniques.
This is helpful in increasing profits which can be earned by the organisation and also helpful in
increasing the number of customers. Innovative products as well as technologies are adopted by
the company and these are launched in market (Dodgson, 2018). The new innovative product is
evaluated on the basis of different choices of customers. While launching in market, it is
evaluated by the company that new product is liked by the customers or not. It is decision of
company to look weather innovation in product is liked by customers or not. The customer
analysis is used for taking the decision. If the innovative product is liked by majority of
customers then that product is sold in market or vice versa. New innovative product will be good
to one and bad to another person. It is the responsibility of company to ensure that it there
focusing on requirements of majority of customers. By doing so, it will be easy to attract
customers towards the product. The new innovation which is done by Made.com is providing
video assistance to customers so that they can see how product will look on them. There are
2

various innovation theories which can be adopted by organisations to enhance and expand their
market share. It is also helpful in making profits and doing business in proper manner (Greer,
and Hauptmeier, 2012). There are 5 type of categories of diffusion of innovation theory. These
are described below-
Innovators - this category includes those people who have keen interest in in using the new
innovative product. These are known as those individuals who want to to use the new product
and they have enthusiasm for using the new services which are offered by the company. All the
individuals have to provide knowledge regarding the new technology as well as the way in which
functioning of business can be enhanced. These individuals are having high tolerance capacity
and they are always searching for new technology features which can be launched in market.
Made.com is providing video assistance to the customers at it’s Store. This is very important for
the company to analyse risk of failure before using this technology in their shops.
Early majority - different individuals are involved in analysing innovative ideas. There are some
innovations which are not according to the customer. But on the other hand, there are some
innovations which are very helpful for the customers and they can enhance experience of
customers while using any product or service. Such individuals have to analyse the market
situation in effective manner and innovate the new products in proper manner. Individuals have
to to evaluate the need of of innovation within company for enhancing success.
Early adopters - these are defined as people who have a lot of choices to make in relation to
innovative products. These are opinion leaders who adopt new change and which is helpful in
providing strategic edge to the organisation. It is important for the company to manage the
process of innovating products and enhancing the opportunities for innovative ideas and
processes. the early adopters have to to evaluate and analyse changes which are required in
product for enhancing innovative ideas as well as processes. There are different type of strategies
important for an organisation in order to provide information two other people. Different
companies like Made.com can use this strategy for analysing the market effectively and
increasing the profit level.
Late majority - it is important for a company to have proper way for providing innovation to the
product. The late majority category includes those customers who are helpful for adopting the
new innovative practice and getting desired results. Different planning and strategies are
developed in order to target potential customers as well as evaluating provision of data. It is very
3

important for company to manage the innovations that are done to products. It is ensured that
these innovations are meeting the needs and demands of customers in proper manner.
Laggards - this includes the individuals who are adopting innovative practice process by
conservative ideology and using traditional thinking. Such individuals are sceptical and it is very
difficult for convincing these customers to adopt the new innovation. It requires efforts and lot of
time from the company to formulate various strategies which can be helpful in enhancing profits
and providing innovation information to these customers.
(Source: Diffusion of Innovation Theory, 2019)
It has been analysed from the above theory that this approach is having different stages as well as
levels. This is an approach for knowing that innovation is helpful for the company or not. The
companies have to categorise customers on the basis of above categories in order to know which
customers have to be focused upon more in order to increase the demand of new innovative
product. New innovation in product is brought in order to evaluate factors that will affect
profitability of Made.com. there are various elements which are considered by an organisation
while developing new innovations. These are mentioned below –
Relative advantage - this is known as effect of innovation while the company is utilising
it. Any organisation which has to make profits and enhance market share should innovate it
4
I
llustration 1: Diffusion of Innovation Theory

products effectively. Made.com was facing reduction in number of customers. Thus, it has
decided to bring innovation in it’s service.
Trialability - according to this factor, there is no extinction to innovative product or
service. It is essential for organisation to evaluate the use of technologies which are helpful for
maximizing profits that are earned by the company.
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 (Jurkovic, and et. al., 2015). This is
helpful in analysing the profitability and productivity of the innovative product or service.
Observability: This explores the extent to which the innovative idea or process provides
such benefits which are visible to others (tangible).
Disruptive Innovation Theory
According to the disruptive innovation theory which was given by Clayton Christensen in
the year 1997, innovation is the best strategy used by the company in order to maximize its sales
and profits. Just theory states that a new and innovative product will be able to attract a customer
more than the existing product which it is offering. It is important for various organisations to
develop new strategies and planning in order to innovate their service and products. Various
organisations have to to analyse and evaluate the need of innovation which is helpful for
company to enhance market share and sales of the company. In reference to the Made.com, there
is requirement of of new technology which will be providing service to customers and helpful in
building competitive advantage in market. The main objective of the company is to increase the
number of customers and it is only possible if this company is doing something different that is
not provided from other companies. Thus, the idea of providing video assistance to customers is
an innovative idea which will be helpful for Made.com to provide quality services to customers.
According to this theory, it is very important for any organisation to innovate the product in
order to sustain in market and increasing the competitive advantage. It is ensured that companies
are having good analysis of customers and then new innovative products are are developed
which which is basically on the basis of technological and social aspects. According to this
theory, new innovations which are done in products must be on the basis of new technologies in
the industry and the the new requirements of customers. Disruptive innovation theory states that
5

innovation is defined as a process which is is required by any organisation to sustain in market
for long period. At the early stages of process and product development, the innovative products
which are developed using the disruptive technology are able to serve a niche market.
Innovation history of company
Made.com is an organisation which was started in the year 2010. This is an E-Commerce
company which provides furniture and other wooden products to customers by online delivery.
this company is working across UK and it is using the cost cutting approach for providing
furniture to customers. This company is using strategy to minimise the costing and hence it is
using the online delivery. There is a manufacturing unit in the workstation of this company
where workers are having different uncertainties. The main reason for this company to you have
success in market is that it focuses on continuously innovating products and services.
Historical Development of Products and Services
Made.com provides various type of furniture products to the customers. There is use of
technology naming NFC in this company. It is easy for this company to provide good quality
furniture products to customers by the use of this technology. This company always looks for
using resources effectively and adopting new technologies for manufacturing and delivering the
products. This is helpful in increasing the customer satisfaction level and maximizing profits of
the company. The NFC technology e used by this company is helpful for managing the
organisational work in effective manner and increasing the profits earned by the company. It is
also useful for maximizing the quality of products which are offered to customers. The scanning
technology NFC is adopted by Made.com for increasing the possibilities of reaching needs and
demands of clients. Scanning the product provides good management for the company and
provide quality products to customers.
Future Development of Products and Services
Different organisations are using continuous improvement of product which is done by
innovating the products and adding a new feature to the existing product. MADE.com is a
6

furniture company and it is using latest technology for providing services to its customers. This
is helpful in increasing their satisfaction level and maximizing the profits on by the company.
Artificial intelligence is one of the major factor which is involved in obtaining success within
Market by providing the products effectively to the clients as well as customers.
Application of theories
Diffusion of innovation theory reflects that innovation in the products and services is essential
for managing the profits of the company. It is easy to attract the number of customers and
maximising the market share. It is important for the management of company to analyse the
customers and manage the working of the company (El-Refaie, 2013). It is important for the
company to manage the new and innovative products. It is essential for the company that all the
operations must be done for managing the profitability of company. There are new technologies
developed by the organisation for utilising the technology in an effective manner. Made.com has
to utilise 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 innovation within market. Some of these are mentioned below
 Relative advantage – Made.com is an organisation which is using digital medium for
providing assistance to the customers. It is essential for the company to innovate the
products for managing the organisations in effective manner. There is use of new
innovations and technology for providing product to customer. It is helpful for managing
the information and data effectively for meeting the needs and demands of customers.
 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. It is essential for the
company to analyse the data and information for managing the work. Innovations are
developed by the company in order to enhance the customer satisfaction. The digital
assistance used in Made.com is useful for managing the customers in effective manner.
Complexity - It is important for analysing the trends and demands of customers for making the
new innovative products. It is essential to reach the potential customers effectively for managing
the sales effectively (Acharya, Schaefer, and Zhang, 2015). Made.com is not having sufficient
resources for managing the innovation. By using this strategic management and sustainability,
Made.com is able to develop profits in retail industry.
7

CONCLUSION
From the above discussion, it is analysed that innovation is an important factor that is
helpful for maximising the profits and sales of the company. Innovation is an essential aspect for
managing the business in proper manner for increasing the level of competitive advantage.
Innovation in companies provide effective opportunities for the company for increasing the
market share. It is essential for the company to manage the customer experience and increasing
the level of satisfaction of customers. It is essential for the company that innovation takes place
in the product or service for attracting customers. There are various theories of innovation like
diffusion of Innovation (DOI) and Theory of Disruptive Innovation which is helpful for
analysing the innovation and increasing the profits. There are continuous innovative practices
followed within the companies for sustaining within market. This is helpful for increasing the
competitive advantage in market. Innovation is helpful for increasing the customer interest and
loyalty.
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