There are various types of innovation; some of which are described below accompanied by examples.
Incremental, radical or revolutionary?
Incremental changes are those of small and slow measures. Such examples include Gillette’s razors and its increase in the number of blades from two through to five (McKeown, M. 2008:3). Changes such as this aren't drastic and sometimes may not even be acknowledged. However, slow changes may be appreciated by loyal customers who dislike the concept of change.
In contrast, however, innovations can be radical i.e larger steps of change. Amazon, for example, was one of the first to develop the concept of selling books online (more than a typical bookshop would sell). This idea has now developed and now sells a broad selection of items in addition to books. The reason Amazon is so successful is because it developed the idea much better than that of its early rivals.
Further impact can be achieved via a collection of innovations; these are called revoluntionary innovations.
Innovations can be developed from incremental to radical leading to revoluntionary. However, some businesses take risks and attempt to introduce revoluntionary innovations without taking the vital primary steps.
Other forms of innovation
Product innovation is thought to be the most common and can be defined as “new products or services introduced to meet an external and market need” (Damanpour, F. 1991, cited in Afuah, A. 1998:14). This demands organisations to keep highly engaged with their customer base to gauge their dynamic needs, wants and expectations. Innovations are an ongoing process. For example, there have been numerous incremental innovations of the Bic ballpoint pen since its original version.
Smartphones are another, but more recent, example of a product innovation; a high-end mobile phone with enhanced abilities of standard mobile phones combining the features of a digital assistant and a mobile phone. More recent models of smartphones have incorporated aspects of media players, navigation systems, digital cameras, web browsers (using Wi-Fi) and high resolution touch screens.
Dell, the well known computer hardware and software company, went from selling hundreds of standard laptops to selling millions of their new innovative product globally; a laptop with interchangeable coloured lids all within two and a half months.
In contrast, process innovation involves “new elements introduced into an organisation’s production or service operations – input materials, task specifications, work and information flow mechanisms, and equipment used to produce a product or render a service” (Damanpour, F. 1991, cited in Afuah, A. 1998:14). Altering the way in which an organisation operates can lead to high efficiency through cost reduction and can, therefore, be a key way to achieve competitive advantage. This is because, unlike products, processed can be more difficult to imitate due to financial constraints, for example.
Online shopping has become ever increasingly popular and a recent UK
Such enhancements in manufacturing processes can concern the adaptations of companies usage in just-in-time delivery (JIT). Also know as the Toyota Production System, this process allows organisations to receive its materials when required using signals during different points of the process. It focuses on continuous improvement and can significantly improve a business’ return on efficiency, quality and efficiency by reducing the costs associated with storing materials and products in warehouses.
Operating efficiently as possible is the key for process innovations. Enterprise Rent-a-Car emphasised in their talk how cost control is a major priority for their company. At any one time, there are only two cars in their car park. They believe that a full carpark is a sign that they are losing money; highlighting the importance of strategy and forward planning. In such an economic climate as today, losing money is to be avoided at all possibilities.
Business process innovation can range from improving or expanding the supply chain, to delivering faster customer service and targeting new customers and markets. Most importantly, this is a cost reducing exercise that also enables organisations to deal with and serve customers at greater ease; an important element for any successful organisation.
Organisations can also engage in position innovation i.e repositioning the perception of an established product or process in a specific context in the eyes of their existing and potential customers. A focus is required on how products, services and companies are viewed symbolically and how they are used. Attempts to achieve this could be through successful marketing campaigns to alter people’s way of thinking.
Innovation within marketing can be critical to a business’ success. We are forever seeing innovative television adverts that capture our attention and encourage us to purchase the products or services being advertised. However, a recent surge in the usage of social networks, such as Facebook and Twitter, have proven to provide businesses with social media platforms. A few years ago people thought marketing by text was innovative…
Business model innovation refers to creating or reinventing a business to immerse itself into new market segments, gain significant advantage over competitors and competing on more than just value proposition. Making reference to Dell once more, whilst its rivals and businesses in various other sector were selling their goods via dealers and retail outlets, Michael Saul Dell (CEO) decided to sell directly to the consumer.
Previously, in order to receive, purchase or enquire about an insurance quote, one would have to contact via phone or be contacted by their supplier as a reminder to insurance your car or property. Now however, due to the over-reliance of the Internet, websites such as Compare The Market have emerged; enabling us to compare prices of insurance suppliers to find the best deal that’s cost effective but also reliable, appropriate and suitable.
References:
Afuah, A. (1998) Innovation Management; Strategy, Implementation, and Profits, New York
McKeown, M. (2008) The Truth About Innovation, Harlow : Pearson Education Ltd.
