Chapter 12- Assessing Innovation Flashcards
What is innovation?
The successful exploitation of new ideas
What was the percentage fall in businesses which are innovatively active.
64% in 2008 to 44% in 2013
Has innovation been more internal or external in recent years?
Internal
What are the factors which make a business more innovatively active
- Are they producing new or improved products (product innovation)
- Are they introducing a new process for making or supplying a product (process innovation)
- Spending on r+d
- Training or acquiring knowledge that is linked to innovation
- introduction of machinery in the process
- Strategic innovation eg changing the structure of the business
How is improving quality a benefit of innovation?
More attractive to customers which increases sales
How is market share a benefit of innovation?
Enables businesses to gain reputation, differentiation and could also lead to cost reductions
How is increasing product range a benefit to innovation?
Diversification giving the business more economy’s of scope
How is reducing costs a benefit of innovation?
Innovation is often used to make processes more efficient which can lead to cost advantages
Give an example of how a business has used innovation to improve its flexibility?
Amazon prime allows customers to get next day delivery
How is uncertainty a problem with innovation?
No guarantee that innovation and r+d will lead to new products and processes
How can competition lead to innovation problems?
Competition can undertake similar activities which can lead to a innovation war leading to cost increases for both businesses
What are some of the factors which are likely to limit innovation?
- Cost
- Excessive risk
- Cost of finance eg interest rates
- Availability of finance
- Government + Eu regulation
- Uncertain demand
What are the four main ways of becoming an innovative company?
Kaizen
R+ d
Intraprenuership
Benchmarking
What is kaizen?
A policy of implementing small incremental changes in order to achieve innovation, better quality and greater efficiency
does kaizen use internal or external talent?
internal, the employees make small changes to improve the efficiency of there work
what is R+D
the scientific investigation necessary to discover new products or manufacturing processes
what is intrapreneurship?
acting like a entrepreneur within a large organisation
what is the difference between entrepreneur and a intrapreneur?
as an entrepreneur you are going to get the benefit of the idea but as an intrapreneur you are likely to give the benefit to the business
what factors determine how well intrapreneurship works?
- Support from senior managers
- Excellent two way communication
- Rewards
- Ownership for projects
name two businesses which encourage intraprenurship?
Virgin and google
what is benchmarking?
the process of setting competition standards, based on the achievements of other firms
what are the benefits of benchmarking?
- A firm can gauge what it is possible to achieve and compare it to its own level of performance
- Inspire firms
- Cost advantages- don’t have to pay for innovation
what are the disadvantages of benchmarking?
- may encourage firms to just copy ideas from other firms
- although the innovation may of been successful somewhere else it does not mean it will be successful at another
- staff can not believe that they are able to reach those targets and become demoralized
- other firms may be reluctant to share their data
how can firms improve the chances of successful innovation?
- Protection eg.Patents
- Making sure you not reaching the maturation stage of the product life cycle
- Developing a supportive culture eg. quality circles
- Maintaining secrecy
what re the three ways to protect innovation and intellectual property?
- Patents
- Copyright
- trademarks
what is intellectual property?
Any intangible assets that arise from human knowledge and ideas eg business name and logo
what are trademarks?
signs, logos, symbols or word displayed on a companys products or on its advertising including sounds
what is a patent?
An official document granting the holder the right to be the only user or producer of a newly invented product or process for a specified period
what is some of the benefits of patents?
- Gives you extra time to see your innovation developed further
- Once you own the patent it can be sold to someone else
- Can make your firm attractive to another to buy you
what are the disadvantages of patents?
- take a long time to see them through and a lot of money which smaller firms may not have
- Firms may have to fight a legal battle over who owns a patent
what is copy right?
Legal protection against copying for authors, composers and artists
