9.2 Assessing Innovation Flashcards
Innovation
Process of converting an invention into a good, service or process that creates value for a business
Pressures for innovation
- Survival
- Shareholders and the City analysts
- Competitive environment
- Social and ethical attitudes
Benefits of innovation for a business
- Competitive advantage
- Aligned to/ reinforces strategic positioning
- Greater stakeholder value
- Greater returns for shareholders
Drawbacks of innovation to a business
- High costs associated with innovating (including R+D)
- High risk
- Pressures for short-term is can deter CEO’s from making the investment
Ways of becoming an innovative organisation
- Requires an environment or culture that fosters innovation
- Large amounts of finance required for investment
- Requires leadership that embraces innovation
- Recruitment of employees who have talent and share the organisation’s values
Kaizen
Philosophy of continuous improvement in working practices and efficiency. Involves everyone in the business from the top down and urges all to strive for improvement.
Research and Development
Required for innovation/ developing new products. Amount spent on R+D varies from industry to industry/ business to business. Essential for new product development.
Intrapreneurship
The practice of entrepreneurship that exists within an established business.
Benchmarking
Strategic and analytical process of continuously measuring an organisation’s products, services and practices against a recognised leader.
Benefits of benchmarking
- More efficient
- Cost effective
- Quicker way to make improvements
Patents
A patent is a government license that gives the holder exclusive rights to a process, design or new innovation.
Trademark
A trademark is a recognisable name, logo, slogan or design that denotes a specific product or service and legally differentiates it from others.
Copyright
A copyright is the legal protection provided for the work of authors, composers and artists.
Impact of innovation strategy on the functional areas of a business
Finance:
- Innovation requires funding with no guarantee of a return.
Marketing:
- Innovation will stem from market research or require market research
- New products or services also require promotion = adds costs to the business
Operations:
- Process innovation directly affects operations
- New reduces may also require new processes
Human Resources:
- Involves human resources for the skills + training is required
