Chapter 9: Innovation Flashcards
1
Q
Innovation
Definition
A
- The process of creating something new and improving on existing systems, products and processes
- Can be radical change or incremental improvements
2
Q
Types:
Product
A
- Development of new or improved products in the market in terms of functional characteristics or technical abilities
- To recover declining product sales and extent product lifecycle by adding innovative features, hence remaining competitive in the industry
3
Q
Types:
Process
A
- is changing or improving the way business operates or manufacture, distribute and market their goods and services
- To increase efficiency, cost advantage and reduce production cycle
4
Q
Types:
Service
A
- New or improved service
- Closely related to new service design and service development
5
Q
Benefits:
Financial Gain
A
- Innovation increase income and provide a new source of income through the creation of new market
- To prolong product lifecycle and and delay on set decline stage, therefore increasing sales growth
6
Q
Benefits:
Expansion of global presence
A
- Protecting intellectual property prevents competitors from using the innovation, allowing themselves a competitive advantage which translates to global competitiveness.
- Lead to options like licensing and franchising
7
Q
Benefits:
Increase market share
A
- Innovation result in new p/s that captures market share as they create a new market
- Product may cause a fad that increases consumer demand and allowing a market trend
- This enhances their public image and brand awareness, gaining a competitive advantage over similar p/s
8
Q
Factors:
Timing
A
- Innovation should be released during times of prosperity
- Consumers are more likely to try new products when they have higher standard of living where they are more confident with their high income
- Business should also research on interest of market
- Innovation should be released at the right stage of product lifecycle
- It should be released during it’s maturity stage or the start of the decline stage
- This is because the company would already have strong brand awareness and market presence
- Prevents the company from losing out on sales
9
Q
Factors:
Cost
A
- Innovation requires a considerable amount of time and money for it to be commercialised and profitable
- Meanwhile, businesses would have to bear an operational cost
- Ensure that expected return > cost
10
Q
Factors:
Marketing Strategy
A
- Business should align their production and marketing strategy such as PR, price, advertising and promotions
- This is to build brand awareness and invoke interest and desire for the innovation
11
Q
Factors:
Technology
A
- Technology allows businesses to do things they previously could not
- It provides a platform for businesses to change the way they operate
