Assessing Innovation

?
Define Innovation and the two types with an example
The successful exploitation of new idea, enabling businesses to compete effectively. Process (new way of making, providing or delivering a good) Product (creation + launch of a new good or service). Netflix has caused Blockbuster to go bankrupt.
1 of 27
What are the external pressures for innovation?
Comes from the need to compete as markets have become more competitive globally. Also from other external factors, such as changes in tech leading to existing products becoming out of date, changes in consumer tastes, need to meet govt. leg.
2 of 27
What are the internal pressures for innovation?
If a firm prides itself on the quality + range of its products, there will be a contest need to ensure that these factors are enhanced to keep customers attracted. Shareholders want added value.
3 of 27
State the benefits of innovation
Increase value added as it helps a firm to develop goods/services that have a USP. Increase market share as it helps them improve the core competences. Enter new markets. Replace outdated products/processes. Increase product range.
4 of 27
State the problems of innovation
Uncertainty can occur as there's no guarantee that innovation will lead to new products/processes. Operational difficulties - may suffer setbacks when new products are released or processes introduced. Generic products (i.e. pharmaceuticals).
5 of 27
State the 4 ways of becoming an innovative organisation
Kaizen, Research + Development, Intrapreneurship, and Benchmarking.
6 of 27
Define Kaizen
Continous improvement of implementing small changes in order to achieve innovation, better quality +/or greater efficiency, i.e. Toyota - employees are to suggest improvements when an abnormality is found. Based on gradual change + staff suggestion.
7 of 27
Define Research + Development
Scientific investigation necessary to discover new products or manufacturing processes.
8 of 27
Advantages of Research + Development
Improvement of production processes can lead to higher profit margin. Creative nature of R&D excites + motivates employees. Helps them establish a distinctive competence + USP. Can improve the durability + reliability of a product.
9 of 27
Disadvantages of Research + Development
Time consuming + expensive. Risk of takeover as larger firms buy a smaller firm who has developed a new good/service. Risk of "copycat" products. = all seen in pharmaceuticals.
10 of 27
Define Intrapreneurship with an example
Acting like an entrepreneur within a large organisation. Occurs when a LO encourages its employees to be creative + take initiative + risks in the working environment. FB - the 'like' button originated from intrapreneurship.
11 of 27
What are the necessary requirements for successful intrapreneruship?
Support from senior managers (i.e. through monitoring + training). Excellent two-way communication. An innovative working environment. Rewards. Ownership of projects (employees should be allowed to see their idea through to the end).
12 of 27
Define benchmarking
A strategic tool used to compare the performance of a businesses processes + products with the best performances of other companies. Or internal BM if there is limited competition (comparisons from within the business).
13 of 27
What things can a business compare for benchmarking
Number of patents filed. % of revenue spent on R&D. Number of new products released yearly. % of training budget for employees gaining R&D skills. Number of Kaizen groups each business has + % of employees involved.
14 of 27
State the benefits of using benchmarking to enhance innovation
Helps a firm recognise how much potential for greater innovation exists. Others can provide an inspiration + ideas to help a firm improve. Can identify areas of a firm that are not keeping pace with innovation. Cost advantages of process innovation.
15 of 27
State the possible reasons why benchmarking pay not lead to innovation
May just encourage a firm to copy ideas from other firms (counterproductive). May be a lack of belief by staff as the innovation is deemed unrealistic. Difficult in gathering reliable info + other firms may be reluctant to share their data.
16 of 27
How to improve the chances of successful innovation
Protection - through patents, trademarks or copyright. Early planning - if a product is in decline stage, start innovation to replace it. Developing a supportive culture. Maintaining secrecy (confidentiality with supplies, employees+other partners).
17 of 27
Define intellectual property
Any intangible assets that arise from human knowledge + ideas, it is likely to arise from innovation. It can be protected by copyright, patents + trademarks.
18 of 27
Define patents
An official document granting the holder the right to be the only user or producer of a newly invented product/process for a specified period. i.e. A new drug in pharmaceuticals industry.
19 of 27
State the advantages of patents
Can help a startup defend itself against attacks by rivals. Can help increase market share. Can help stop theft of a business's innovations by larger rivals. Can be used as a bargaining tool to persuade manufactuers + investors to help the business.
20 of 27
State the disadvantages of patents
May discourage innovation as larger firms may takeover a smaller firm to obtain the patent. No agency for enforcing patents, so the holder must be willing to take those who infringe the patent to court. Application process expensive+complex.
21 of 27
Define copyright
Legal protection against copying for authors, composers + artists. i.e. The Verve vs. Rolling Stones = Bitter Sweet Symphony + The Last Time saw the Verve forfeit all of their songwriting royalties, + Mick J + Keith R given the song credit.
22 of 27
State the advantages of copyright
It is automatic gain, thus free + easy. You have copyright until 70 years after your death. Protects IP by providing only the burden of proof that copyright was infringed.
23 of 27
State the disadvantages of copyright
Difficult to prove copyright infringement. Only protects a particular expression of an idea, not the concept or idea itself. Registration of a copyright infringement suit to court takes time + requires a fee.
24 of 27
Define trademarks
Signs, logos, symbols + words displayed on a company's products or on its advertising, including sound or music, which distinguish its brand from those of its competitors. KitKat failed to trademark 4-fingered bar's shape.
25 of 27
State the advantages of trademarks
Helps consumers recognise the products of a business, distinguishing them from those of competitors. Acts as a bar to the registration of another similar mark. Once its registered the firm has exclusive rights to its use, indicated by the symbol R.
26 of 27
State the disadvantages of trademarks
Owner needs to show proof of use at regular intervals (if these files aren't in on time they can lose the TM). Seen as the weakest form of IP as it only protects the concept, not the product itself. Have to pay a fee for registration + renewal.
27 of 27

Other cards in this set

Card 2

Front

What are the external pressures for innovation?

Back

Comes from the need to compete as markets have become more competitive globally. Also from other external factors, such as changes in tech leading to existing products becoming out of date, changes in consumer tastes, need to meet govt. leg.

Card 3

Front

What are the internal pressures for innovation?

Back

Preview of the front of card 3

Card 4

Front

State the benefits of innovation

Back

Preview of the front of card 4

Card 5

Front

State the problems of innovation

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Innovation resources »