Innovation Management Barriers And Fast Moving Consumer Goods Commerce Essay

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The Innovation Management helps organizations to create innovation. In today's technology driven world, it has become very necessary to innovate new Products which can actually satisfy customer's needs. Because of the highly competitive nature of today's business needs creative and innovative ideas for dominant success.

Innovation is one of the hottest topics in business these days. The companies are coming out with new products and services designed to amaze their customers. The only problem is, these days most of what passes for innovation stand out as very new, different or compelling, thus most of the innovation efforts are lucky to pay for themselves, much less actually turn a profit.

Incremental innovation focuses on making small improvements to existing products and services.  It adds a few changes as per requirement, but does not significantly alter the product or the perceived value to the customer. Disruptive innovation creates new products or services that solve customer problems in entirely new and different ways.  It brings changes in the customer's perception of value, and can turn markets and entire industries upside down.  Mostly, disruptive innovation solves problems which were unknown by customers they had or were unable to clearly figure out.

Researchers found that the ideas come up from the internal experts for new product has a good chance of making it to market.  However, customers created more new product ideas actually solved their problems, which is a major factor in determining the perceived value. To get customers involved in the creative/idea generation phase of the innovation process may take longer time and cost more.  However, it greatly increases the odds of developing successful new product and their problems, which further helps to produce other benefits like stronger working relationships and deeper loyalty as well.

For getting the successful innovation it becomes an integral part that how you do the business.  It must be a nonstop process in which you never stop looking for new and better ways to add value.  And that requires a culture that supports long term innovation. To establish a culture where innovation can flourish should be defined for the successful innovation for your business. Ask employee for ideas on how to improve products, processes and workflow, and keep the lines of communication open up and down the organization. The continuous feedback on their performance, and reward them (both publicly and privately) for their innovation efforts.  Most of all, demonstrate your commitment to innovation through your actions as well as your words.

Innovation Management:

Innovation management is the way of managing processes in innovation which can be used to develop both product and organizational innovation. It is only possible with the help of proper processes for R&D to be efficient. It is a set of tools that allow managers and engineers to cooperate with a common understanding of goals and processes. The focus is to allow the organization to respond to an external or internal opportunity, and use its creative efforts to introduce new ideas, processes or products. The innovation management is not restricted to R&D only; it involves workers at every level in contributing creatively to a company's development, manufacturing, and marketing. The process can be viewed as an evolutionary integration of organization, technology and market by combining the series of activities: search, select, implement and capture.

The processes can be designed as pushed or pulled through development. A pushed process is actually based on existing or newly invented technology, in which organization has access to, and tries to find profitable applications to use this technology. A pulled process tries to find the customer dissatisfaction areas and to focus on the development to find the solution to those needs. To get the success on either of the two methods, an understanding of both the market and the technical problems are needed which can be done by creating multi-functional development teams, containing both engineers and marketers.

In general, innovation management has two main duties to manage both input and output of innovative materials.

In the former case, innovation management must conduct the flow of innovative ideas (like new discoveries) into the organization for subsequent usages. In other words, it is needed to collect all relevant external innovations to serve the internal innovative system.

In the latter case, the internal innovation should be managed in a proper manner. According to the customers needs, an organization always should have new products and services to satisfy their needs. Internal innovative system is responsible for analyzing the external needs, estimating the internal possibilities, and proposing new innovative ideas. But this is not as simple as it seems to do all these activities you have to remove certain barriers.

Aims and Objectives:

The purpose of the study on the innovation management is important for customer retention:

To have the basic knowledge and know how about the topic.

To see how different factors are linked with it.

To see how it affects different aspects of business.

To see the roles of different bodies regarding the subject.

To see the environmental trends regarding the issue.

To form a detailed analysis from all perspectives regarding the issue.

To make a very reliable conclusion based upon the study.

And finally to make some suggestions which may be proven very helpful for the sake of betterment.

Exchange of knowledge, methodologies and tools. Which are the barriers to innovation? How can they be overcome?

How can a good idea be transformed into good business?

How to promote individual creativity?

How can an "innovation culture" be achieved in the organisation and supported by different business functions?

Literature Review:

The conception of innovation has evolved significantly over the last forty years. During the 1950s, innovation was considered a discrete development resulting from studies carried out by isolated researchers. Nowadays, the innovation is no longer conceived as a specific result of individual actions, but more as a problem-solving process (Dosi, 1982), an interactive process involving relationships between firms with different actors (Kline and Rosenberg, 1986), a diversified learning process (Cohen and Levinthal, 1990), a process involving the exchange of codified and tacit knowledge (Pate1 and Pavitt, 1994), and an interactive process of learning and exchange where interdependence between actors generates an innovative system or an innovation cluster (Edquist, 1997). Other authors (Garcia and Calantone, 2002; McDennott and O'Connor, 2002) have outlined other aspects of innovation more related to the final consumer of the innovation and to the innovation process itself.

The evolution from a technological network perspective of innovation management to a social network perspective has been led by the challenge to transform information into knowledge (e.g. information contextually connected to the development or improvement of products or processes). Knowledge-based innovation requires the convergence of many different kinds of knowledge retained by a variety of actors (Kipping and Engwall, 2001; Smits and Moor, 2004). The increasing importance of knowledge as an economic driver has major implications for innovation management, which is, in turn, a key determinant of national and regional competitiveness in the global, knowledge-driven economy. The knowledge contribution to innovation is achieved in part by reducing transaction costs between firms and other actors, most importantly in the areas of research and information, buying and decision-making, policy and enforcement (Maskell, 1999).

Innovation and knowledge generation have been analysed from a specific systemic approach considering the market role, the knowledge architecture and the innovation alternatives (process, product, radical, incremental) outlining a parallel comparison between both processes. This approach to innovation recognizes that innovation and knowledge generation take place as a result of a variety of activities, many of them outside the formal research process. Knowledge is thus generated not just in universities and research centers, but also in a very wide variety of locations within the economy, and also in the form of a product or as consumption. In the current economic context, growth must mainly originate from increasing the productivity of knowledge work, and increasing this productivity is the most important contribution management can make.

In comparison to the traditional mechanical versus organic approach to management, these characteristics involve a fundamental change in the strategic perception of the organization, which accordingly has to consider the following management challenges: to manage human capabilities in a strategic manner; to generate networks with internal and external partners; to create adaptive and interactive organizational structures; to balance individual and corporate motivation. Finally, the challenges of the new knowledge-driven economy can be classified into the following groups:

New characteristics of the market: As the market is constantly changing, and it is becoming more global and new competitors are emerging. With the addition, the complexity level of technology is increasing, product life-cycles are shortening, and the consolidated knowledge as a crucial input.

New types of innovation: As innovation takes many forms and it emerges where the market offers incentives to introduce new products and production methods, and where people are willing to take risks and experiments with the new ideas.

New needs of stakeholders: Customers, owners and stock markets increasingly equate an organization's worth with its ability to get winning products to market on time, every time.

New Innovation Management Paradigms 7 New approach to innovation management: The firm's capacity to implement innovation management revolves around its success in dealing with these two main challenges, top-line growth and bottom line efficiency.

New technology innovation assessment skills: The rapid development of new technologies prompts firms to assess and implement the most appropriate technology as per their need to keep their competitiveness.

Need, for new innovation management tools: The development of knowledge-based innovation management requires the capacity to implement technical and relational tools. Technical tools refer to the acquisition and utilization of new information and communication technologies - they do not create competitive advantage because they are readily available to others.

Innovation Management for Customer Retentions:

In the business world competitors are always looking to steal the customers, and many customers are on the lookout for a better deal. It is more expensive to acquire customers than to retain them, an effective customer retention strategy is crucial to a company's success. Thus, in today's highly competitive market, leading organisations are differentiating themselves through the implementation of customer-focused strategies.

The customer retention management relies on the combination of the following:

High satisfaction with product performance and customer service.

High intention to continue to do business with the organisation.

High willingness to recommend the brand to others.

*(High means the top-box score [typically of a five-point scale] in quantitative measurements).

There are two most important components of customer retention which should be considered.

Customer satisfaction.

Systematic and proactive customer relationship management.

As in today's world, leading companies are increasingly focusing on the knowledge of their front-line staff who, collectively speak to hundreds of thousands of customers every year facilitating effective and efficient two-way feedback process, and recognizing and rewarding improvement ideas generated by staff, and feeding this information into regular strategic development forums, which further leads to react to customer dissatisfaction by changing non customer-focused policies and procedures by the organization.

Why innovation is becoming more important

The innovation is playing a vital role in companies now. In today's highly competitive market, for the company's growth there is a need for innovation. It is stated that the fact is likely to kill a company in this new economy is not somebody doing something better, it's somebody doing something differently. So it is very important to be different in the market, almost true for some industry sectors. In today's fast moving economic situation, mostly category breaking business environments meet their objectives. Only such companies meet their estimate growth, gain profit, out run their competitors and show excellence in execution which they achieve it through innovation.

In order to create the customer-focused business processes and policies, business leaders need to be fully aware of the impact of decisions which sound revenue generating or cost saving decisions, but in actual have such a negative impact on the overall quality of service, that the bottom-line is adversely affected. Through encouraging an organisational culture where complaints and customer feedback is included in the decision-making process, senior leaders and their teams are held accountable for reducing the cause of complaints and ensuring that all business decisions take adequate account of customer satisfaction.

Innovation Management Process:

To achieve revenue growth through new products and services, and to improve their response to customer demands, organizations must innovate. To get the successful and efficient innovation, the process must be managed. The process begins with the initialization of innovation, which includes the overall strategy of how the organization will pursue innovation, which further includes the selection of the core competency of the organization and to determine the direction the company should innovate in, and the boundaries.

As it is depicted in Fig. 1, the process starts with the generation of new ideas and results in a critical assessment of the total project. This "Stage Gate Model" is based on empirical findings of numerous "New Prod-Studies" conducted by Cooper (e.g.1985, 1992, 1994). Comparing new product successes with failures, a standardized procedure concerning innovative projects was identified as a critical success factor.

Initial screen Second Screen Decision on business Case Post-development Pre-commercialization Post Implementation

Review Business Analysis Review

Ideation Preliminary Detailed Development Testing & Full Production &

Investigation Investigation Validating Market Launch

Figure 1: Typical "Stage-Gate" new product process (Adapted from Cooper; Kleinschmidt 1993).

At each "gate", the project has to be evaluated in terms of a "go/no-go"-decision. Precisely, there are several pre-defined "must-meet"-criteria and some "should-meet" characteristics (see table 2).

Table 1: Important Activities throughout the Stage Gate Process (compiled from Cooper; Kleinschmidt 1993)

Types of Innovation:

There are also two major categories of innovation: sustaining and disruptive, which can be occurred under both types of innovation (product and process).

Sustaining innovations are those which improve an already existing product or process. Disruptive innovations are those which are radically different from any previously existing process or product or service on the market.

Examples of sustaining innovations include: improved versions of software products, more efficient auto motors, and waste reduction measures in the manufacturing process. Examples of disruptive innovations include: interchangeable parts, assembly line production, container shipping, the affordable automobile, personal computers, mobile phones, CNC machining, and genetically engineered crops.

2 Research Design:

Purpose of Study:

There are four types of studies. Those are descriptive, exploratory, case study analysis and hypotheses testing. The study type of the research is Descriptive study. It is undertaken in order to ascertain and to be able to describe the characteristics of the variables of interest in a situation.

Types of Investigation:

There are two types of investigation, causal and co relational. The investigation is based on the correlation study because here an attempt has been made to delineate the important variables associated with the problem.

Extent of Research Interference:

There are two ways in which the researcher can interfere and those are minimal (when in natural environment) and manipulation (control environment). Usually a co relational study is conducted in the natural environment with minimum interference by the researcher with the normal flow of work. Since I am working in a normal flow and not interfering in the environment, the extent of interference is minimal. Because in co relational study, an individual has to develop a theoretical framework, collect the relevant data and analyze them to come up with the findings.

Study Settings:

Correlation studies are invariably conducted in non-contrived (natural not artificial) settings. So I also conduct the non contrived study to obtain solution of the problem.

Units of Analysis:

Unit of analysis includes individuals, dyads, groups, organization, cultures etc. In my research study I will take organization as the unit of analysis. As I am doing the research study on consumer products, so I account for individual customers and shopkeepers in this study.

Time Horizon:

The study is one short or cross-sectional study because the whole data which I gather will be on the same day only.

Sampling Design:

I select 20 respondents because the unit of analysis is individual consumers and shopkeepers. The sampling is a probability sampling and sample size is 150 individuals.

Data Collection Procedure:

The data collection procedure that I choose is to gather data through questionnaire, the reason being that the sample size is quite large. I measure these questions through 5 pt liker scale ("1" for strongly disagree and "5" for strongly agree.)

Data Analysis Technique:

As I discussed above that the study is cross sectional (one time) study due to limited time available. I use descriptive statistical techniques to analyze the data and draw possible results. I calculate Mean, standard deviation and frequency distribution of the collected data and after this draw a conclusion.

Theoretical Framework:

The dependent variable is Innovation management barriers whose dimensions are internal and external barriers. In Internal barrier dimension I have considered three variables which are organisational, personal and financial barriers.

In the case of organisational Barriers the problems are of the kind of management thinking, centralised environment and kind of products e.t.c. In personal barriers as resistance against change is a common human reaction. It mostly results from fears of uncertainty. This reaction depends on the individual involvement, personality structure and experiences. Resistance against innovations has not always to be understood as negative reactions. They may also be warning signals caused by possible deficits of information are missing inclusion. Financial barriers are the one of the most occurring barriers in innovation management as there is the requirement of huge amounts of sums for the betterment which is quite difficult and hard in short term though this expenditure is going to give lots of benefits in the long run.

In external barriers in which I have considered two variables market related barriers which include competitors products and offerings in market and the second important barrier is customers in which I have considered the feedbacks and reactions of the customers that how their reactions effect the innovation as barriers in firms.

Signification of Study:

Innovation management has always been a very important, influential and focused topic because of its basic importance in all, especially the growing and changing business sector. Innovation also plays a key role in the fast moving consumer goods too .But I have observed that there must be some problem in spite of these benefits firms are failed in innovation management.

Purpose of Study:

The purpose of studying in detail the innovation management is to know the actual meaning of the innovation management and its role and importance in all the sectors of business.

To know why the organisations are failed in implementing innovation management process.

Today's organizations mainly rely on intellectual properties, and in elite positions, creativity and innovation are the golden keys for the organizational success.

Limitations of Study:

Overall this topic has a great diversity; however the study has some limitations as given below:

People were not really aware about the topic that what does it mean and how does the innovation play an important role in satisfying the needs of the customers in a better way.

Timeframe was not really satisfactory.

Clash of perceptions regarding the topic had been encountered because of the freedom of speech but somehow that was useful.

Environmental uncertainty.


Innovation is being an important means for businesses to stay successful and increasingly to simply survive in competitive market driven economies. The terms innovation, innovation management and creativity are being used throughout business and politics. The companies which are able to build and manage their innovation potential are the most likely to succeed and profit in the ever faster moving economy of the future. To get the success, they must have developed a solid innovation strategy, create an innovation culture and develop and implement the best ideas captured through idea management processes which further should be supported by solid leadership at all levels and support functions.

Therefore the barriers that could be encountered while following the process of innovation management are identified which is further used as input for development of solutions and preventive measures to achieve a high reliable innovation management strategy for complex and competitive environments. Here it is said that, individual barriers in the innovation of a company are subject to dynamic internal and external processes of change.

Therefore, identification and systematic analysis of disruptive factors on a regular basis are strongly recommended to constantly verify innovation management activities. For the continuous betterment process it should be ensured that there is an inclusion of feedbacks and measures to achieve new developments. Recurrent identification of disruptive factors provides solutions for and success of innovations. Additionally, a long lasting implementation guarantees further development of the analytical process itself. Effectiveness and efficiency can be increased by a learning process and the possibility of observing long-term influences through a growing data base of disruptive factors of innovation processes.


As innovation has a vital role to play in each and every type of new industry such as genetic engineering, electronics and telecommunications, through automotive and aerospace as well as old industries such as shipbuilding and mining so it is important to manage the all aspects of the innovation management process in an efficient and effective manner which can be done by considering certain recommendations given below:

External factors like changes of markets, globalisation or emerging new technologies that force companies to shorten their innovation cycles and accelerate development processes should be analysed in a better way and taken into the account for any final step to be taken.

Not only the planning performances and efficiency is responsible for the effectiveness of the innovation system but also there are lots of external and internal factors which are equally influential so should be taken care of.

For specific influences and conditions, organisational cultures and environments demand for individual strategies as well as the specific subject of innovation cannot be dependable only on a single successful procedure so it is always better to adopt the overall best practices.

Proper interdisciplinary and inter-organisational teams should be made to institutionalise.

Innovation networks that require managing each and every processes by negotiations and coordination of activities and interfaces.

Continuous adaptation of external knowledge has to be ensured by proper communication and training as according to the changing environmental it is required to avoid any barriers.

Within the companies hierarchies should be maintained with the same kind of work in order to prevent any organisational barrier.

Flexible n dynamic organisational environment and behaviour should be adopted in order to be competitive according to the competitive demands.

Proper supervision by the top and effective management on each and every step should be made mandatory to avoid any lack or deficiency or harm to the process.

Each and every minor step should be considered and effectively evaluated in the terms of the barriers.

Therefore, identification and systematic analysis of disruptive factors on a regular basis is strongly recommended for the constant review of the innovation management activities. A continuous process ensures inclusion of feedback and measures to achieve new developments.

The long term goals of the companies are easily and effectively managed by following a proper procedure of the innovation management so it should be more focused.

Effectiveness and efficiency can be increased through learning process.

Observing long-term influences through the growing data base of disruptive factors of innovation processes.