Chapter 12- Assessing Innovation

Question 1

What is innovation?

Answer 1

The successful exploitation of new ideas

Question 2

What was the percentage fall in businesses which are innovatively active.

Answer 2

64% in 2008 to 44% in 2013

Question 3

Has innovation been more internal or external in recent years?

Answer 3

Internal

Question 4

What are the factors which make a business more innovatively active

Answer 4

• 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

Question 5

How is improving quality a benefit of innovation?

Answer 5

More attractive to customers which increases sales

Question 6

How is market share a benefit of innovation?

Answer 6

Enables businesses to gain reputation, differentiation and could also lead to cost reductions

Question 7

How is increasing product range a benefit to innovation?

Answer 7

Diversification giving the business more economy’s of scope

Question 8

How is reducing costs a benefit of innovation?

Answer 8

Innovation is often used to make processes more efficient which can lead to cost advantages

Question 9

Give an example of how a business has used innovation to improve its flexibility?

Answer 9

Amazon prime allows customers to get next day delivery

Question 10

How is uncertainty a problem with innovation?

Answer 10

No guarantee that innovation and r+d will lead to new products and processes

Question 11

How can competition lead to innovation problems?

Answer 11

Competition can undertake similar activities which can lead to a innovation war leading to cost increases for both businesses

Question 12

What are some of the factors which are likely to limit innovation?

Answer 12

• Cost
• Excessive risk
• Cost of finance eg interest rates
• Availability of finance
• Government + Eu regulation
• Uncertain demand

Question 13

What are the four main ways of becoming an innovative company?

Answer 13

Kaizen
R+ d
Intraprenuership
Benchmarking

Question 14

What is kaizen?

Answer 14

A policy of implementing small incremental changes in order to achieve innovation, better quality and greater efficiency

Question 15

does kaizen use internal or external talent?

Answer 15

internal, the employees make small changes to improve the efficiency of there work

Question 16

what is R+D

Answer 16

the scientific investigation necessary to discover new products or manufacturing processes

Question 17

what is intrapreneurship?

Answer 17

acting like a entrepreneur within a large organisation

Question 18

what is the difference between entrepreneur and a intrapreneur?

Answer 18

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

Question 19

what factors determine how well intrapreneurship works?

Answer 19

• Support from senior managers
• Excellent two way communication
• Rewards
• Ownership for projects

Question 20

name two businesses which encourage intraprenurship?

Answer 20

Virgin and google

Question 21

what is benchmarking?

Answer 21

the process of setting competition standards, based on the achievements of other firms

Question 22

what are the benefits of benchmarking?

Answer 22

• 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

Question 23

what are the disadvantages of benchmarking?

Answer 23

• 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

Question 24

how can firms improve the chances of successful innovation?

Answer 24

• 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

Question 25

what re the three ways to protect innovation and intellectual property?

Answer 25

• Patents
• Copyright
• trademarks

Question 26

what is intellectual property?

Answer 26

Any intangible assets that arise from human knowledge and ideas eg business name and logo

Question 27

what are trademarks?

Answer 27

signs, logos, symbols or word displayed on a companys products or on its advertising including sounds

Question 28

what is a patent?

Answer 28

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

Question 29

what is some of the benefits of patents?

Answer 29

• 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

Question 30

what are the disadvantages of patents?

Answer 30

• 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

Question 31

what is copy right?

Answer 31

Legal protection against copying for authors, composers and artists