Definition Of Innovation Business Essay

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Much has been written about innovation in business, and that usually means developing a new product, market or service innovators hope will take the world by storm and turn a company into trouble. The problem with this kind of innovation is that it finally lost a race (there is no finish line). Start-ups and entrepreneurs who spotted a niche and have moved quickly to use it will naturally do well to a second reverse-engineering of their products at prices themselves, or simply produce something that does the job better. We tend to think of innovation as "doing new things" if it develops new products or services into new markets, or through refining products and services to customers.

These are all innovations that we recognize and believe to be intrinsically good, for all time the R and D organization has them. That is what makes innovations. We assume that all innovations are the things that did not exist before and that exist today because we have built, but it is a wrong assumption. This view completely ignores typical simplistic an essential element of the innovation equation, namely, that when we talk about innovation, they rarely talk about what we will not do. (1, 1, 1, p.26)

2.1.2 Types of innovation

We have four types of innovation, employing three of them that are applicable to service organizations: technological innovations, process innovations and administrative. The service innovation process of service innovation: is defined as a product or service given to a customer or client. research and innovation in general, does not distinguish between product innovations and services is the service offered in the service sector organizations are conceptualized as similar products developed by organizations in the manufacturing sector. This view prevailed because product innovation and outsourcing approach is mainly focused on the market, and their introduction results in the differentiation of the production of the organization to its customers or clients. Consequently, as product innovations, the drivers of innovation in services is mainly demand for new services and customer leaders desire to create new services to existing markets or find new niches for making services. The centrality of the customer to meet the needs in the service sector, the nature of service innovation is best understood in its relationship with the service. This is the way to define service innovations such as new services to existing and new customers and offer existing services to new customers.

Process innovations: Unlike a product or service innovations, process innovations have an internal focus and the goal is to increase the efficiency of the internal organization and processes to facilitate the production and distribution of goods or services to customers. New processes can be combined with a technical system or technological core of the organization (technical process innovations) or Core administrative or social system of the organization (administrative process innovations).

Technological process innovations are new elements introduced into the productive system of an organization or operation of services for the production of their products or services to customers. The drivers of these innovations are mainly the reduction in delivery time, increased operational flexibility and lower production costs. In service organizations, these innovations are mainly associated with the innovations of information technology. For parsimony, from now on we refer to this type of innovation "technological innovation".

Administrative process innovations are new procedures and practices to motivate and reward members of the organization, to develop a strategy and structure of tasks and services and the change of organizational processes

(3, 1, p.654, 655)

2.1.2.1 Radical vs. incremental

Theoretical typologies that emerged in the literature on organizational innovation is the introduction of the dichotomy of radical innovation in the supplementary report and adoption. One aspect of this dimension seems to be whether the innovation of technology is evident, the risk of leaving current practice. If a technology is new to the unit of adoption and the new reference group of organizations, or requires both the flow (process) U output (production or service) change, maybe the size or cost of organizational change required is sufficient to justify the appointment of a rare and radical, as opposed to incremental innovation. The main objective of the study is a package of radical innovation, a flexible bag or semi-rigid tray containing cooked food that is heat sterilized and stabilized as a metal that requires less heat treatment because of its shape. It is an efficient competitor of frozen foods, and is one of many packaging technologies are now available as part of a trend in flexible packaging industry. (1, 2, 1, 1, p683)

Although the presence of all product innovation, radical innovation projects of uncertainty than the incremental update innovation is mainly due to the inclusion of new technologies. The introduction of new technology, radical innovations is based on the physical and human capital, which is less standardized and transaction-type update incremental innovation. Often, new plants and equipment needed to produce radical innovations. Similarly, the market intelligence on radical innovations are likely to require new investment in both physical and human capital is a specific transaction. Companies (or their suppliers) often have to develop new relationships with potential clients to know the market segments or to use new methods of data collection.

On the other hand, often trading activities of gathering information regarding incremental innovation can occur without new investment in physical capital and human. In projects of incremental innovation, current users will be contacted using existing, relatively standardized means to identify potential areas for improvement of existing products.

So, as a radical innovation projects related to higher uncertainty and idiosyncratic events like the progressive projects, TCE theory is that incremental innovation projects that can benefit from governance structures of the market (supplier involvement) as a radical projects, whatever stage of development. (1, 2, 1, 2, p 47, 48)

2.1.2.2 Process vs. product:

Product innovation is defined as developing new products that differ significantly from existing products. Innovation is a fairly radical for a company in relation to improving the product, known as incremental innovation. And process innovation is defined as a significant reform of the production process to reduce waste, defects, and costs and other factors. (1, 2, 2, 4, p 344)

The company may invest in product innovation that expands the market demand and process innovation that reduces the marginal cost of production. Initially we considered the two activities separate decisions, and have produced some interesting findings that the company wants to invest in process innovation or product development. (1, 2, 2, 1, p 233)

. Despite the importance of basic knowledge for the recognition of opportunities and exploitation, there may be differences in the extent that knowledge can be transferred for commercial purposes. This section develops the argument that product innovation leads to knowledge spillovers that are bound to start their own business. Product innovation is defined as development of new products or services to meet the needs of external users or market needs, while process innovation is defined as the development of a production process new or significantly improved through new equipment or improving business processes. Product innovations are intended to external customers and clients are primarily market driven.

The benefits of product innovations are observable, since the revenue generated by successful product innovations are explicit in relation to the money market yield of process innovations that are implicit and often represented by a reduction in manufacturing costs. Moreover, the consequences for workers in product innovations may expose them to new markets and user needs. The close relationship between employees and major users of technology in industry can also lead to sources of ideas for new businesses. Employees may be able to take advantage of these new ideas to start a new business to meet an unmet need in the market.

Instead, knowledge spillovers and business ideas for process innovations, compared with product innovation. Based on the definition used in this study, the innovation process is a system of internal focus, and the customers are end users in organizations that use and work with the new process. To be useful in understanding the innovation processes within an organization is often integrated with other enterprise-specific resources exploitation and implementation.

Also, process innovations often consist of production processes that lead to productive efficiency, which enables organizations to lower prices. However, it is difficult for new companies to exploit the efficiency of production due to the low efficiency of new businesses.

Rather, new companies often compete by offering products that differ in terms of functionality and price to pay. Moreover, the costs of implementation of technological process can be high, because sometimes requires the expenditure level of devices. New businesses are usually short on resources and may have capital to invest in these devices. Based on the knowledge-based view of product innovations and process, it was found that the information concerning the innovation process is difficult to understand, and can not be easily understood or copied to others. This is because the information about the innovation process is less clear that the information on product innovations and process innovations on the production and transmission of results and not the results themselves.

In addition, the information provided to process innovation is relatively more complicated, because it is interconnected with other aspects of health care systems. You can use this knowledge; a thorough knowledge of the process is a specific organization is required. It is generally difficult for competitors to emulate and imitate the technological process, because the information relates to these innovations is a company unique and individual. A worker who receives the processes may be less inclined to leave the organization, because the knowledge gained is more useful inside and outside the organization. The contracting process of information innovation, which is the specific company, may increase the possibility of paying the employee leaves the organization. (1, 2, 2, 2, P 269, 270)

Theory to distinguish between process and product innovation:

In this part of the literature on the usefulness of consumer choice theory has been used to solve the above problem. One of the key features of the utility theory of choice and the important role of the consumer and his ideas will help us to analyze the consumer decision-making. The usefulness of an approach further underscores the fact that allows us to look a bit of product attributes that consumers use to analyze and evaluate marketing decisions. It is a micro-level analysis of consumer product that will give us a basis to distinguish between process and product innovations. It is shown that the use of a particular model, the elimination of the aspects (EBA) choice theory is appropriate, because the characteristics of the model. The EBA approach is more choice for consumers to use alternatives to measure the similarity between the preferences. This notion of similarity is used to distinguish the product and process innovations.

(1, 2, 2, 3, P 235)

2.1.3 Innovation management

2.1.3.1 Innovation management measurements

Measure the innovation process is crucial both for professionals and academics, but the literature is characterized by a variety of approaches, prescriptions and practices that can be confusing and contradictory. This is without a comprehensive, covering a range of measures are necessary and useful ideas are marketable products. We try to fill this gap by examining the literature related to the measurement of innovation management in the company. Drawing a large body of literature, we must first develop a synthetic framework for the process of innovation of directors consisting of seven categories: inputs, knowledge management, innovation strategy, culture and organizational structure, portfolio management, management of projects and marketing.

Second, factors that populate each frame empirically proven to be a significant innovation process, and the map illustrating the extent of the territory of the measures of innovation management. The review makes two important contributions. First, it is difficult stage includes a wide variety of literature in a single framework. Second, it provides a framework within which managers can assess their own innovation activities, to examine the extent to which their organization is nominally innovative or whether the innovation is embedded throughout the organization and identify areas for improvement

(1, 3, 1, p 1)

2.1.3.2 Managing the process of innovation

Successful innovation is connected to the market forecast of customer needs and desires, as well as effective management of the innovation process. Companies have a number of financial instruments and strategies to successfully develop and market forecasts customers, but only recently in the last two decades, the development and articulation of management practices and the innovation process. While companies may institute formal innovation policy and procedure to guide staff and managers are the principles that govern the process of innovation in enterprises and sectors:

• Innovations must meet the needs of customers, please shareholders, and inspire employees.

• Innovation requires a vision of leading the change process.

• Innovation needs a risk-tolerant atmosphere.

• Innovation requires guidance throughout the learning, involving all members of the organization.

• Innovation requires cross-functional systems in terms of analyzing the impact of change, and monitor implementation.

The leaders of the innovation process to address a number of problems in the organization to ensure the development and implementation of innovations. The main tasks of innovation management is to reduce the sense of risk management at the level of customer interface, customer training, performance management of staff, the conduct of field workers, as well as using information technology.

Leaders of the innovation process need feedback on their performance management. Although the share of futures market reflects the success of management efforts, there is another method of management control. Innovation management can be measured and assessed through a framework for measuring innovation management. The framework for process innovation management consists of seven categories: inputs management, knowledge management, innovation strategy, organizational culture and structure, portfolio management, project management and marketing. Measure of innovation management is used in enterprises as managers and administrators. The framework for measuring innovation management allows managers to assess their innovation activities, to search how their firm is innovative and discover areas for improvement. (1, 3, 2, p.3)

2.1.4 Innovation advantages

Some of the benefits of using open innovation (as opposed to private innovation) in venture capital can be explained by the application of real options approach. Open innovation in supporting ventures such as venture capital has the following advantages: (i) the benefits of early involvement in new technologies and business opportunities, (ii) a commitment for financial iii) the early retirement reduction of losses down, and (iv) delayed departure if this results in a company. (1, 4, 1, p. 251)

First, innovative companies benefit from early involvement in new technologies or business opportunities. Open Innovation enables companies to develop innovative brand in a wide range of inventions developed outside by buying minority stakes in the (high tech) start-ups involved in venture capital funds or by providing educational investment in promising projects at universities or research laboratories. This is a process of creating options for more information and learning about projects and technologies with uncertain gains. The advantage of this strategy is that firms learn early on new technologies for this time investment is weak and reversible at investment firms exit.

In addition, using technology developed externally will improve the potential upwards of a real option, because the company can explore a wide range of interesting ideas and projects. In real terms, options, innovation allows companies to scan a much broader use of available technologies, or changes in the market and not only write options on internal projects alone. Ability to use technology and wider market opportunities is a monetary value, because there may be opportunities for more varied, and some of them could be perceived internally uncorrelated opportunities.

Second, to innovate, companies also benefit from delayed entry or delayed financial commitment. The staging process where new technologies are developed and marketed in new business opportunities can be analyzed as a compound option. Closed innovation, enterprises can start with an idea developed internally or invention, and pull through the funnel.

Open innovation practices give companies more flexibility about when to start the internal process of innovation: a company can begin to explore the commercial possibilities of a technology out of first, through relationships with universities. The ability to slow investment in domestic innovation activity allows the company to consider a wider range of input options at first, and also supports more resources to develop opportunities for growth of a technology. This flexibility also creates the possibility of differentiating innovation strategies: some companies have developed the ability to explore the technologies and ideas from the start; others prefer to invest in technology companies at a later stage when the level of uncertainty has been reduced to a level where the market potential for new business becomes more predictable.

Third, open innovation, offers companies the advantage of an early exit, and the possibility of reaching a value of projects that have not advanced at home. Open innovation is characterized by the possibility that innovators can always sell or license technologies or spin-offs that are not promising enough and / or do not fit its business model and core competencies. Therefore, a project that is determined to be ungrateful as a business (but may be useful as a complement to the other side of the business) could be extended to a provider, some additional or other third parties. And policy initiatives can be pursued by several companies, with multiple sources of investment, not only for the equity of the company.

This means the desired two things: either the company gets more with the same amount of capital, or it can bring the same kind of innovative exploration and fewer budgets. There are two caveats to note here. First, firms may be part of the property in order to trade should support investment and other companies. Secondly, the economic benefits of this are the interesting early stages of the innovation funnel as investments for specific applications in a subsequent sale may be sunk costs, and more difficult to restore, or (depending on the contest ability of markets).

Fourth, innovation allows companies to benefit from delaying the exit. Creating Corporate Ventures who reside in the organization allows companies to oversee its development and delaying the exit from the decision. Although the company continues to grow and mature, the company may decide to turn the joint venture or sell to raise capital from external suppliers, such as venture capitalists. This decision will of course depend on the policy measure and the commercial success of the project. If a company wants to distribute their investments in venture and invite other investors, the company also benefits from the "other peoples money" to support the enterprise development.

The business capital is efficient, although not giving up control is major strategic investors outside. This paradigm of open innovation enables companies to maintain flexibility, while the risk of different options. These four arguments to prove that the alleged benefits of open innovation - which is a better chance of other organizations, technological know-how and increased productivity of R & D through a combination of internal and external channels to market - can be fully explained with a real options approach, which focuses on the process of how companies cope with high uncertainty following new projects. First of all, innovation allows companies to easily with other techniques because of small and reversible on education and research universities and high-tech start-ups.

These small investments represent an opportunity, creative process that responds effectively to technological uncertainty and market high in radical innovation projects. At the same time, these initial investments in innovative companies delay other financial obligations. Second, open innovation increases the efficiency of enterprises due to the way external market such as licensing and spin-offs. These channels represent external market alternatives to innovate companies to capture the value of their business innovation. Open Innovation allows innovators to select the phase of exercising the option to capture the value of projects in different ways, even when the company is not actively marketing the product.

This output is delayed as strategically interesting spin-offs or licensees represent a potential threat of competition or technological and market uncertainty preclude any final decision on the strategic value of technology or particular application for the company innovative. (1, 4, 1, p. 253, 254)

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