BUS300: Managing Innovation Assessment for Made.com

This report analyzes the application of innovation theories to the business of Made.com, a London-based online retailer of furniture and homeware. The report delves into two key innovation theories: Diffusion of Innovation and Portfolio Management Innovation Theory. It explains each theory in d...Read More

Managing Innovation
Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Theories of innovation................................................................................................................3
Applying each of the chosen theories in order to explain the historical development of one or
more product or service and possible future development of the product or service..................6
How both the theories can help past and future of Made.com....................................................8
Critical analysis of contributory factors related to the commercial success of a business..........9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Innovation may be defined as a process of translating an idea into goods or service which
creates a value for which customers are willing to pay. Innovation simply means a new idea or
creative thoughts or new imaginations which is in the form of a new device or a method.
Innovation in a business is often viewed as a better solution which meet new requirements or
existing marketing needs (Biemans, 2018). Innovation management is a set of tools which
allows a company to respond to the internal and external opportunities by introducing creatively
new ideas, products or processes in a new market. In this report Made.com is taken as an
organisation which is a London based brand which retails and designs home wares and
furniture’s online and also across the experimental showrooms in entire Europe. Present report
discusses about how Made.com will manage the innovations by applying the theories of
innovation.
MAIN BODY
Theories of innovation
Diffusion of Innovation Theory
This theory was developed by Em Rogers in 1962 and is considered as one of the oldest
social science theory. This theory analyses how the social members adopt an innovative idea and
how they possibly made a decision towards adopting the new idea. This theory mainly depends
on the Human Capital, according to this theory an organisation should widely adopt the
innovations in order to achieve sustainability and development (Garza-Reyes and et.al, 2017).
Wherever, this theory was applied by any organisation cultural adaptability played a relevant
role. This theory includes four basic elements such as:
Innovation: It is an idea or a practice which is perceived new by the individual and can
also motivate to do something new in an organisation or simply bring a change.
Communication Channel: Communication channels help in taking the message from
one place to another and it will be communication channels that innovations can be spread across
the world.
Time: It is the total time which can take the people towards getting adapted to the
innovations in a society.
Social System: Social systems are interrelated network groups which are joined together in order
to solve the problems in order to achieve a common goal.

According to this theory innovations are not adopted by individuals at a same time in a
society but individuals tend to adapt the innovations in a particular time sequence which can be
classified in various adopter categories. There are Five categories of adoption which can be
classified below:
Illustration 1: Adopter Categorization
(Source: Diffusion of Innovation Theory, 2019)
§§
Innovators: Innovators are the people who are eager to try new ideas and technologies.
Innovators are people want to be first to try innovations and keep on experimenting on new
ideas and thoughts (de Zubielqui, Jones and Statsenko, 2016.). These people are always willing
to take risk and often become the person to develop new ideas.
Early Adopters: These are the people who tend to be more integrated in a social system
as compared to the innovators. These are the kind of people who represent the opinion leaders
and embrace the opportunities and enjoy leadership roles. Early adopters are the people who
does not need information for change but are comfortable adopting new ideas.
Early Majority: These people may or may not be leaders but they are comfortable in
adopting the new idea. Such people typically need evidence that a particular innovation works
for them and accordingly they will adopt or reject the innovation.
Late majority: These are the people who are not sure about adopting the change but will
adopt the change only when it is adopted by the majority.

Laggards: These are the people who do not accept the change as they are bound by the
traditions or may be conservative. Such people are not willing to accept the change at all and are
considered as hardest group for accepting the change.
There are the five factors which have an influence on adoption of an innovation such as:
1) Relative Advantage- When an innovation is seen as better than a particular idea, product
or program which it replaces the previous innovative ideas.
2) Compatibility- It is the consistency of the innovation with the values, needs, experiences
of a potential adopters.
3) Complexity- How difficult it is to understand the innovation for the adopters.
4) Triability- It is the extent to which the innovation can be tested before its adoption is
made.
5) Observability- It is the extent to which the innovations show the observable results.
Implementation of Theory
According to this theory most of the customers of Made.com are at the category one
which is Early Adopters as the company's target market are those people which get influenced
with the new products but know much more about the product and accordingly take the buying
decision.
Portfolio Management Innovation Theory
Portfolio management innovation theory states the control over the projects and
programmes which are established by an organisation. This theory helps in delivering the
strategic objectives of an organisation in the form of presentations and projects. Portfolio
management theory helps in determining the effectiveness of an innovation and helps in
identification of risk and return on the investment. As the uncertainties in the business rises and
also the complexities in the present business scenario make it impossible for the companies to
determine their business future (Cantero, Gonzalez and Diaz, 2017.). This theory provides the
framework which allows the managers to take up the right project and also helps in balancing the
long term and short term innovations investment of the organisation. This theory involves the 4
steps that help in understanding the operational and strategic objectives of an innovation. The
first step of the innovation includes short term, mid-term and long term strategies of the
innovation. Second step includes the portfolio management which allows the allocation of the
resources for the strategies which are involved in innovation. Third step consists of operational

portfolio management that allows the allocation of the resources which are involved in effective
implementation of the strategies of the innovation. The last step is the execution and
implementation of the project. Such process a can be adopted by Made.com by using
informational technology based platforms within the organisation (Rubin and Abramson, 2018).
The portfolio can be frequently assessed by the organisation according to quantitative and
qualitative criteria such as:
 What is the contribution of the project towards the corporate strategy? (Quantitative)
 What is the project's expected financial return? (Qualitative)
 What is the level of risk which is associated with the project? (Qualititative)
Qualitative and quantitative is termed as number of contributions towards the corporate
strategy where the risk assessment is termed as qualitative and project's financial return is termed
as quantitative. There are various benefits which are associated with the implementation of
Portfolio management innovation theory to the business which can be described below:
 It helps in assessing and analysing the potential failures and growth rate of the innovative
project.
 It helps in providing the proper sequence to the actions and plans in a team.
 This theory helps in the evaluation of the right kind of the project towards the strategic
objectives of the organisation.
 It will also help in maintaining the portfolio budget of Made.com and also helps in
managing the resources which carry out the innovative activities in an organisation.
 This theory will help the organisation in minimising the perceived risk that is particularly
associated with the implementation of innovative project in an organisation.
 Portfolio management theory also helps the organisation in identification of the gaps
which exists in the overall projects which are mainly considered with the innovations in
the organisation's business.
 This theory helps the organisation in determining the methodology that can be used to
incorporate all units of innovation.
 With the help of this theory leaders get a proper idea of how to lead a team in an effective
way so that the objectives of innovation can be easily achieved in a business.

Applying each of the chosen theories in order to explain the historical development of one or
more product or service and possible future development of the product or service
Diffusion of Innovation Theory- This theory can be used by Made.com in order to spread its
innovative ideas among the potential and existing customers. This theory is helpful for the
organisation in adopting and delivering the innovation which leads to the sustainability and
development of an organisation. As this theory has got three elements which includes
communication channels, time and social system which will help Made.com in creating the new
idea in order to adopt the change with the purpose to increase the investment and profits for the
organisation (Kodama, 2018). Different communication channels will be a help for Made.com to
transfer their innovative message to the people in order to advertise their new schemes of
investment and to attract the people in order to increase their capital. Time element will help the
company to measure the extent of time that will be consumed by the people in order to get
adopted to innovation. The last element social system will be used by the organisation to solve
the problems of the society which may be created by the innovation among the people who try to
adopt the innovation in the society. Made.com can provide the digital services to the customers,
with the help of this theory Made.com can provide more digitised services to its customers. A
company can provide its retailing services through its apps, internet and can make its services
more digitised in order to attract more and more customer at the global level. Made.com can also
provide advanced customer support by using the latest technologies and can provide feasible
solution to the problems of the customers. This can help the company to build a strong
relationship with its customers and can provide 24/7 services to the customers.
Portfolio Management Theory- This theory can be implemented by Made.com in order
to take decisions which are related to investment, asset allocation, matching the investment with
the objectives, risk management, etc. By implementing this theory, a company can take the
decisions in such a way that they can increase their returns on investment by making the proper
investment decisions (Curtis and Sweeney, B, 2017). With the help of this theory company can
lower its risks by collecting lower risk assets of investment and can also help in observing the
conditions of the markets in which they operate. With the help of this theory Made.com can
maximise their return on investment and also minimising the risks of investment, which can be
helpful for the organisation in meeting their goals and objectives. Portfolio management
innovation theory can be used by the organisation in maximising the return on investments of

their innovations by formulating the proper strategies in order to meet the objectives of
innovation and allocate the assets accordingly. Such a planning is very important for an
organisation as investors are investing the capital so they want the risk on their investment to be
balanced so that more and more profits are achieved from the business. If, this theory is
implemented by Made.com there begins a process which includes investment, monitoring and
measurement of the performance of the portfolio. Management needs keeps on innovating the
business by providing the effective ideas in order to keep on improving their sales and return on
investments.
How both the theories can help past and future of Made.com
Both the theories can help Made.com in their past and future, a company can make
innovations in their past schemes and can present new scheme to the customers which can help
the organisation in attracting more and more customers which can help the organisation in
increasing their profits. Both the theories of innovations can help the organisation to learn from
their past experiences related to the innovations and can get better ideas for innovating their
business. As Made.com is in online retailing business so both the theories of innovations can
help the organisation in learn from its experiences and records and can help the organisation in
developing a good and bright future (Wilhelm and Dolfsma, 2018). Made.com has got more
capabilities in the future in order to develop their business through innovations with the help of
the technologies options available to the company. Also, an organisation can measure the risk of
the investments and it will be easy to make the calculations in the future. These innovation
theories can help the organisation in attracting the more and more investors through its latest
innovations and can have an effective strategy in order to make the innovations successful and
can easily asses the risk associated with it.
Innovation Model
Innovation model can be defined as the development of new and unique concepts which
can help the organisation in financial viability and fulfilment of its goals and objectives.
Innovation model can help the organisation in providing the conceptualising the framework in
order to identify and advance the change ideas which help in generating the values needed to
create sustainable growth for an organisation (Davies and et.al., 2017). There are various types of
innovation models which can be implemented by Made.com such as Linear model, Diffusion
model and Compound model, but out of these three models Made.com can apply Linear Model

in its organisations. Linear model is the early model of innovation which suggests that the
technical change happens in a liner fashion starting from invention goes through innovation and
ends up at diffusion.
Illustration 2: 3 phases of technological change
(Source: Linear Model of Innovation, 2019)
Linear model can be implemented by Made.com by making a basic research about the
innovation which can be made by the organisation which will given organisation a basic idea
related to the innovation which is to be made. In second step an organisation have to make
applied research which will give them an information about the ideas which an organisation was
to innovate. In the third step an organisation has to develop the idea i.e. bring invention in
innovation and at the last step an innovation is brought into execution i.e. an innovation is
diffused. Linear model mainly focuses on how an invention can result in innovation and it can
result in the diffusion. For an organisation to achieve a successful innovation results, few facts
must be considered by an organisation which includes, goals of an organisation must be clear,
well defined and properly aligned, there should equal and mutual participation of the
stakeholders, there should exist a clear, trustworthy, transparent communication and monitoring
of the accurate results should be done. This model should be implemented by Moad.com at the
smaller scale in order to check its effectiveness. If the model is successful then it should be
implemented at the larger scale.
Critical analysis of contributory factors related to the commercial success of a business
As, per the views of Herregodts and et.al., (2017) the most difficult challenge for any
business is to get prepared for the future even knowing what lies in front of an organisation.
Whenever an organisation is starting up the new practice it is important for an organisation to be
aware of the various options which it has to consider and often this step is most difficult. There
are various contributory factors which result in the commercial success of a business the most
important is Client management which is a difficult task. Made.com has to manage the client's
expectations for example it has to ensure that client should not expect a company to do

something for free. Also, an organisation should ensure that it's client are aware of the outset of
the expectations and should exist a transparency which does not lead to misunderstanding
between the two. Client management is not only this a company has to pay fees on timely basis,
listening the advice from the clients, settle the grievances, etc. According to Isherwood and
Tassabehji, (2016) another contributory factor of the commercial success of a business is risk
management which is an important factor which can lead to huge profits for the business of an
organisation. An organisation should do a proper risk analysis for the investment made and
should check out the possible uncertainties of the investment. For the risk management clients
engagement is vital for an organisation. There should also exist a limitation of the liability of an
organisation. Some organisations agree that it is necessary for a company to ensure that if the
company enters into liability limitations it must be communicated effectively to the clients in
order to ensure that there is no misconduct. So this factor can result in the commercial success of
a business. Another contributory factor is billing the clients of an organisation, clients of an
organisation should possess a good idea about the fee or even if there is a hike in a fee it will
help in managing the relationship with the clients. On commercial basis an organisation should
pay for the work as soon as possible in order to avoid funding Lock-up. An organisation should
ensure that there is a smooth payment and should be able to reduce the chunks in the payment
methods which is really important for an organisation to achieve the commercial success. As per
the view of Fu, (2018) another contributory factor for the commercial success is marketing, this
well help Made.com in creating the awareness of its existing and new products and services
among the existing and potential customers. It is important for an organisation to look for various
marketing trends and ensure that effective marketing strategy is applied by the organisation in
order to attract the right audience. Marketing decisions should be made proper by an organisation
should take care of the key points of the marketing which can help the organisation in achieving
the commercial success.
CONCLUSION
It can be concluded from the report that innovation in a business plays an important role
which can help the organisation in achieving the success of a business. Present report also
concludes that there are various theories of innovation which can be implemented by an
organisation like Portfolio management innovation theory and Diffusion of innovation theory
which can be applied by the organisation in making innovations in its business. An organisation

has to effectively implement these theories and should have an appropriate strategy for
implementing these theories in an organisation. It can also be concluded from the report that
theories can help the organisation to learn from the past experience and make better innovations
for the future. It can also be summarised that it is important for an organisation to develop an
innovation model which can lead to the commercial success of a business.

REFERENCES
Books and Journals
Biemans, W., 2018. Managing innovation within networks. Routledge.
Cantero, J., Gonzalez, N. L. and Diaz, D., 2017. Managing innovation in the Argentinian nuclear
sector: The case of Atucha II nuclear power plant (NPP). Academia Revista
Latinoamericana de Administración, 30(4). pp.565-580.
Curtis, E. and Sweeney, B., 2017. Managing different types of innovation: mutually reinforcing
management control systems and the generation of dynamic tension. Accounting and
Business Research. 47(3). pp.313-343.
Davies, A and et.al., 2017. Five rules for managing large, complex projects. MIT Sloan
Management Review. 59(1). p.73.
de Zubielqui, G.C., Jones, J. and Statsenko, L., 2016. Managing innovation networks for
knowledge mobility and appropriability: A complexity perspective. Entrepreneurship
Research Journal. 6(1). pp.75-109.
Fu, J. S., 2018. Where Does Innovation Come From? Exploring the Dynamic Processes of
Organizing and Managing Social Entrepreneurship and Innovation (Doctoral
dissertation, Northwestern University).
Garza-Reyes, J. A and et.al, 2017. Managing Innovation and Operations in the 21st Century.
Productivity Press.
Herregodts, A. L and et.al., 2017. Managing innovation uncertainties: a user-oriented knowledge
typology. In The 2017 ISPIM Innovation Conference. LUT Scientific and Expertise
Publications–Reports.
Isherwood, A. and Tassabehji, R., 2016. A case analysis of managing “Maverick” innovation
units. International Journal of Information Management. 36(5). pp.793-798.
Kodama, M., 2018. Managing Innovation through Ma Thinking. Systems Research and
Behavioral Science. 35(2). pp.155-177.
Rubin, G. D. and Abramson, R. G., 2018. Creating value through incremental innovation:
Managing culture, structure, and process. Radiology. 288(2). pp.330-340.
Wilhelm, M. and Dolfsma, W., 2018. Managing knowledge boundaries for open innovation–
lessons from the automotive industry. International Journal of Operations &
Production Management. 38(1). pp.230-248.
Online
Diffusion of Innovation Theory, 2019. [Online]. Available Through:
<https://www.ou.edu/deptcomm/dodjcc/groups/99A2/theories.htm>.
Linear Model of Innovation, 2019 [Online]. Available Through:
<https://ipfs.io/ipfs/QmXoypizjW3WknFiJnKLwHCnL72vedxjQkDDP1mXWo6uco/
wiki/Linear_model_of_innovation.html>.