The application of new ideas to the products

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Introduction (200 words)

This essay is based around a significant innovation that has had a major impact on the modern world. The innovation it will analyse are 'online social networks'. The essay will begin with an academic literature review which will define innovation and the innovation I have chosen. It will then report on my chosen innovation................. and be applied to the related case study '..............................' It then will discuss and reflect on the relationship between both the ideas in the literature consulted and the case study.

An academic literature review (1300 words)

What is 'innovation'? (100 words)

There are a number of definitions and interpretations of what the study of innovation really is and what it encompasses. Rogers (1998) explained that "Innovation can be defined as the application of new ideas to the products, processes or any other aspect of a firm's activities. Innovation is concerned with the process of commercialising or extracting value from ideas; this is in contrast with 'invention' which need not be directly associated with commercialisation." REF 5. A universally accepted aspect of innovation however, is that it is only an innovation if it is a commercialised and value is added to the initial idea.

More recently the definition of innovation has expanded to include the entire lifecycle of the innovation process from initial development, to use and through to obsolescence (Nasirpourosgoei and Coles 2006). REF 4.

Types of innovation (500 words)

There are a number of recognised types of innovation, each with different processes, speeds of development and impacts on firms, industries and economies. Three of the main types are radical, incremental and process.

Radical innovation

Radical innovations are those which have a hugely successful impact in firms, industries economies and societies when first introduced and for a significant period of time after. They include breakthroughs in science and technology and can consist of the creation of both new products and processes. Leifer, McDermott, O'Connor et al (2000) explained that "Radical innovation transforms the relationship between customers and suppliers, restructures marketplace economics, displaces current products, and often creates entirely new product categories." REF 3

Examples of radical innovations include mobile phones, the aeroplane and social networks which have all created entire industries and some of the most valuable in the world today.

Incremental innovation

Incremental innovations are relatively small, continuous improvements to an existing technology that provides new benefits such as a higher quality product, more efficient manufacturing process or lower costs for example. Banbury and Mitchell (1995) cited the work of Dosi (1982) and Henderson and Clark (1990) who stated, "We define important incremental product innovations as refinements and extensions of established designs that result in substantial price or functional benefits to users." (REF 1) Banbury and Mitchell (1995) also explained that continuously developing incremental innovations in firms are vital to continue to keep up with industries as they evolve.

For example an incremental innovation is the evolution of the classic iPods with grey and black screens being developed to have colour screens. This made the product more desirable and attractive as well as higher quality but was an innovation that had a radical effect on the industry.

Process innovation

Process innovations are the innovations that improve the operations and processes in which products are manufactured or supplied to the customer. They often create more efficient, faster or lower cost processes that benefit firms in producing their product. Nasirpourosgoei and Coles (2006) cited Trott (2005) who explained that "process innovations target improved manufacturing processes, either by introducing new components in production (such as a robot arm) or by replacing business systems such as upgrading a software package."

An example of a firm utilising process innovation is Dell Computers. (2010) explains that "Dell, for example, did not invent the PC, but created new business processes to bring PCs to market, eliminating unnecessary steps in the supply chain while offering more flexibility and control to the customer." REF 6. They sell their products only via their website and use a processing system that involves the customer choosing and paying for a customised computer online. Dell then builds the computer in the factory nearest the customer from parts sourced from many locations around the world, to minimise delivery time. They then deliver the product as quickly as possible; completing what is an extremely efficient system.

Innovation Models and Theories (400 words)

Linear models

One of the earliest models of innovation was the linear model. This model follows a single flow of processes and has a number of alterations depending on differing experts opinions, however the basic idea is the same. Godin (2005) described the basic linear model as follows, "The model postulates that innovation starts with basic research, then adds applied research and development, and ends with production and diffusion."REF 7. He also displayed this model as a diagram:

Basic research -> Applied research -> Development -> Production -> Diffusion

According to Tidd (2006) the linear model is based on the idea that either research is carried out in order to create an innovation without prior consumer demand for it and is then pushed to the market (technology push), or that the market demanded something new and therefore research was carried out on how to create an innovation to fulfil this need (need pull). REF 8 Once the research is carried out, it then goes to development and production and is marketed by the firm.

Many experts in the field believe it is now an outdated and flawed model. Edquist and Hommen (1999) pointed out its major flaws and limitations, "In this model there is no feedback from the several later stages of the innovation process (i.e., product development, production, and marketing) to the initial stage of research, nor is there feedback between any of the other stages." (REF 2) It is now seen as too rigid and not how innovation works in the modern world. Tidd (2006) says that modern innovation is a lot more complex than the above model. For example ideas start out in a single direction but often take multiple paths and develop into new ideas. He also states that setbacks often occur which means "mistakes accumulate and vicious cycles can develop" and that the criteria for success can change over time between different people and groups. All these problems form a much more complex model to the linear version.

Rothwell's Five Generations of Innovation

Rothwell (1986) REF 9 defined five generations of innovation models that began with the linear models in the 1950s and evolved into models with new focuses in the mid 90s. Each developed to changes in the business environment or changes in the markets such as economic growth or inflation and required firms to adapt and evolve to keep up.

Generation 1 - Technology push

In the 1950s companies focussed on scientific and technological breakthroughs and pushed new innovations to market. The linear model is used in this generation. Rothwell (1986) observed that new discoveries and breakthroughs had lead to new technological developments and then to a surge of new products and processes.

Generation 2 - Need Pull

In the 1960s to mid 1970s firms moved towards fulfilling the needs of consumers. This was also a linear model but rather than carry out research, firms replaced it with developing innovations straight from the identified consumer needs. Rothwell (1986) noted that "The adoption of the need-pull model led to the question being asked in some firms... 'who needs research?"

Generation 3 - The Coupling Model

During the mid 1970s to mid 1980s firms moved away from the previous two innovation models and began to become more interlinked with different areas of the firm. Rothwell (1986) pointed out that they "subdivided into a series of functionally separate but interacting and interdependent stages." They combined research and development with marketing more closely through structured processes to reduce costs, under pressure from inflation. (Proven, DATE UNKNOWN) REF 10.

Generation 4 - Integrated Business Processes

During the mid 1980s to mid 1990s after the recovery from the economic problems the focus for innovation was based on integrated processes with closer links to suppliers and major customers. (Proven, DATE UNKNOWN) REF 10

Generation 5 - System Integration and Networking

From the mid 1990s the focus changed to "systems integration and networking in order to guarantee flexibility and speed of development." Strategic partnerships were also formed and business processes became automated as resource constraints were of high importance. (Proven, DATE UNKNOWN) The model became even more complex as the different systems were interlinked and networks with outside partners became part of the model .


An innovation that changed the modern world: Online Social Networks (1000 words)


Social networks - Facebook (was ............. innovation, now incremental with new features being added)

What are online social networks?

Brief history of social networks - (internet invention, 1st social network, Myspace, facebook, twitter etc)

What type of innovation are they?

Why are they a significant innovation?


What it is

Statistics (inc. users and current £ value)

Innovation and Facebook



Discussion and reflection on the relationship between the ideas in the literature consulted and the details of the case (800 words)

Analysis and conclusion (500 words)