The creation of new ideas to help businesses compete
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Process Innovation
The creation of a new way of delivering good or services
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Product Innovation
The creation of a new product or good
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Kaizen
Continuous improvement over time to improve quality
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Research & Development
Investigation to discover new products/ processes to ensure they are suited to the needs of the market
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Market Research
Finding out what customers need and how to meet it
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Intrapreneurship
People within the business creating new ideas
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Benchmarking
Setting standards against competitors to monitor progress
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Intellectual Property
Intangible assets from knowledge and ideas
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Patent
Grants the holder the right to be the only producer of a product
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Copyright
Protection against copying someone else's work
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Trademark
Logos, symbols or words on a company's products to distinguish it from its competitors
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Advantages of Product Innovation
- 'First mover advantage'
- Higher prices and profitability
- Added value
- Opportunity to build on early customer loyalty
-Enhanced reputation as an innovative company
-Increased market share
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Advantages of Process Innovation
- Reduce costs
- Improve quality
- More responsive customer service
- Greater flexibility
- Higher profits
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Benefits of Innovation
- Improve health and safety
- Provide a stimulating work environment
- Enter new markets
- Meet regulations
- Replace outdated products
- Increase capacity
- Reduce environmental impact
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Drawbacks of Innovation
- Generic products
- Innovation costs
- Excessive risk
- Uncertainty
- Government and EU regulations
- Lack of information on market
- Market dominated by established businesses
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Key Features of Kaizen
- Improvements based on many small changes
- Ideas come from the workers themselves
- All employees should try to improve their own performance
- Helps encourage workers to take ownership for their work
- Small improvements are less likely to need major c
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How Research & Development Contributes to Innovation
- Helps a business invent new products
- Gains competitive advantage
- Unique ideas can be patented
- Benefit from economies of scale and lower unit costs
- Motivate the workforce
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Examples of Businesses with Successful Intrapreneurship
- Gmail (Google)
- Playstation (Sony)
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What can a business do to encourage intrapreneurship?
- Look out for and encourage entrepreneurial activity
- Give employees ownership of projects
- Make risk-taking and failure acceptable
- Train employees in innovation
- Encourage collaboration
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Some reasons why large businesses are not entrepreneurial
- Complacency / arrogance
- Bureaucracy
- Reward systems do not provide an incentive to innovate
- Short-termism
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Internal Benchmarking
Within the same organisation
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External Benchmarking
Analysing outside organisations that are known as "best in class"
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Strategic Benchmarking
Analysing long-term strategies and general approaches
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Performance/ Competitive Benchmarking
Consider their position in relation to performance characteristics of products
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Functional Benchmarking
Comparing with partners drawn from different businesses sectors to find better processes
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Four Key Steps in Benchmarking
1. Understanding in detail existing business processes
2. Analyse the business procedures of others
3. Compare own business performance with others
4. Implement steps necessary to close performance gaps
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Benefits of Benchmarking
- Firms can recognise their potential
- Data from other firms can provide ideas and inspiration
- Can identify areas that are falling behind
- Can improve a firms competitiveness
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Reasons for Failure when Benchmarking
- May encourage firms to copy
- May not mean innovation will be successful even though it was in another business
- Lack of belief by staff (demoralised)
- Difficulties in gathering reliable data
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How to improve chances of successful innovation
- Protection of ideas
- Early planning in lifecycle
- Developing a supportive culture
- Maintaining secrecy
- Remembering the consumer
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Reasons why intellectual property is valuable to a business
- Set the business apart from competitors
- Offer customers something new and different
- Form an essential part of marketing or branding
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Other cards in this set
Card 2
Front
The creation of a new way of delivering good or services
Back
Process Innovation
Card 3
Front
The creation of a new product or good
Back
Card 4
Front
Continuous improvement over time to improve quality
Back
Card 5
Front
Investigation to discover new products/ processes to ensure they are suited to the needs of the market
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