innovation Flashcards
What is innovation?
improving a product
What is invention?
creating a product
What are the 2 types of innovation?
product and process
Why is innovation improving quality good?
Increase prices
Value for money
Retained profit to reinvest
Increased innovation, more competitive
Why is innovation expanding product range good?
More products
benefit of economies of scope
wider target market, more sales etc
spreads risk over boston matrix products
Why is innovation increasing capacity good?
meet fluctuations in demand
better reputation
How does innovation cause uncertainty?
Does not always mean success
Higher cost, no demand can be disastrous
How do competitors impact innovation?
Quick to respond
Less loyalty
Lower sales
No competitive advantage
What does innovation mean for generic products?
Low level of perceived value for price
Patent expires competitors react
