Unit 9-Innovation Flashcards
Benefits of innovation (4)
Premium prices
Rep
Cost savings (process innovation)
Economies of scope for innovation
Drawbacks of innovation (4)
Cost-initially and on a large scale?? Time consuming Risk of failure (customer needs)-creates waste Risk of imitation Harm reputation if of poor quality
Kaizen-continuous improvement
Small changes to innovate in long term. Gives control over decision making.
Pros cons of kaizen
+Cheap
+Business doesn’t have to spend lots of time
-long term
-workers aren’t encouraged to think about wants and needs of customer
-not encouraged to think about big change
Intrapreneurship and example
Encouraging employees to act as entrepreneurs. Come up with new ideas and company backs up with resources e.g google
Pros of intrapreneurship (4)
+identify opportunities
+drive innovation
+job enrichment (motivation)
+goes alongside regular job, saves cost of hiring someone solely to innovate
Why large firms aren’t doing intrapreneurial (3)
lazy
short termism
reward systems don’t incentivise employees
Ways to encourage intrapreneurship (5)
Structured time away Teams Secondment (send them to smaller businesses) Competitions Financial incentives
Intrapreneurship requirements (5)
Senior management support+trust Communication Culture for innovation Reward systems Resources
Benchmarking
Sharing best practices between departments or other businesses to improve areas of underperformance
Pros cons of benchmarking
+Motivates. Introducing successful methods rather than unknown ones
+identify what works
- Won’t directly lead to new products-parents copyright limit it etc
- May not be transferable to ur company (culture difference etc)
Reasons for protecting innovation (5)
Maintain USP Maximise return on investment Reduce threat of comp Premium prices Rep
Innovation on finance
Expensive-so may need to raise finance
Innovation on marketing
More market research+usually price skimming for innovative products+promotion
Innovation on operations
Need budget for new machinery+training
