9 - Assessing Innovation Flashcards
What Is Innovation?
The development of an idea into a new product or process.
What Is Product Innovation?
Changing a product that already exists or developing an invention into a brand new product.
What Is Process Innovation?
Finding better or more efficient ways of producing existing products, or delivering existing services.
What Is Innovation Likely To Have & Why?
A patent, as the business looks to recoup the cost of research and development by stopping other businesses from copying their product or process.
What Is The Value Of Innovation?
(4 Points)
~ Businesses cannot afford to stand still in competitive markets.
~ Today’s innovations are tomorrow’s rising stars and cash cows.
~ A business that comes up with the right innovation can guarantee future income if it is protected by a patent.
~ Is expensive, but the alternative risk of losing future markets might be worse.
What Are The Risks Involved With Innovation?
(3 Points)
~ Businesses can make substantial losses if the innovation fails.
~ Other businesses are likely to react with their own innovations.
~ Legal implications often arise with other businesses questioning whether the product or process is really an innovation.
What Are The Benefits Of Innovation?
(7 Points)
~ Creates a USP.
~ Less competition due to patent.
~ More efficient and cost effective production process.
~ Likely to be a premium product with high prices.
~ Improved productivity and reduced costs.
~ Builds a strong organisational culture which should attract more talent.
~ Higher sales and profits.
What Are The Drawbacks Of Innovation?
(3 Points)
~ Can be very costly in the r&d stage and therefore a drain on resources.
~ For all innovations there is an opportunity cost.
~ Few innovations actually become products, so the business is effectively financing waste.
What Are The Ways In Which A Firm Can Become Innovative?
(4 Points)
~ Kaizen.
~ R&D.
~ Intrapreneurship.
~ Benchmarking.
Describe Kaizen
(4 Points)
~ System that concentrates on small but frequent improvements in every aspect of the production process.
~ Improvements can take place at any level of the hierarchy.
~ Requires a highly motivated and committed workforce.
~ A vital component of TQM in order to improve the quality of the production process.
Describe R&D
(2 Points)
~ Through R&D a business can differentiate its product leading to success in either a mass or niche market.
~ Increases market power.
What Is Differentiation?
Being able to offer a good or service that’s stands out from the competition.
What Are The Characteristics Of An Entrepreneur?
(3 Points)
~ Creative and innovative.
~ Enthusiastic and motivated.
~ Good communication skills.
What Is Intrapreneurship?
When a large business enable employees and managers to demonstrate entrepreneurial behaviour in their work to the benefit of their employer.
What Is Benchmarking?
Understanding and evaluating the current position of a business or organisation in relation to best practise and to identify areas and means of performance improvement.
