Table of Contents
Q1 Innovation is the same as technological advances
3
Q2. Value Innovation Concept
5
Graph1: Formulation of an organization’s innovation strategy and a Value Curve illustration
7
Q4. Example of an innovation learnt this semester
8
Lessons learnt
10
Conclusion
11
References
12
Q1 Innovation is the same as technological advances
Innovation is the same as technological advances as innovations mean technological improvement. Many systems both basic and complex have been developed through highly intelligent innovations (Trot 1998). These systems that have been developed have helped in connecting people, ideas and objects. The invention of the light bulb, for example, linked people of different areas who worked together to develop a much refined light bulb. The different engineers found themselves to be interested in developing a common object (Hipple 1999). This innovation led to generation other ideas about electricity that resulted in new communication technologies. People learnt how more than one communication signal could be combined onto a single line for transmission. This was a tremendous breakthrough in technology that changed people’s way of communication. The knowledge was rapidly heeded in the society and industries. What the different engineers learnt from the existing technology then was combined to develop new technology through single innovations. Innovations unfolded to see a whole new face of technology with complexities that would be extremely difficult to comprehend (Krumwiede 1997).
People normally view technology as hardware and computer software but people should also view it as connections of an element such as objects, people, ideas and skills. The three element s set goals and strive to achieve them (Noordhoff 2011). Objects are the software and hardware ideas are the understandings of the objects and the people are the owners of the ideas. People generate ideas and share them with other. These different elements do get obsolete as well as the systems that they develop (Harper 1991). Older relationships are replaced by new ones, and new markets and opportunities arise. For example, the invention of the electric light changed the lighting technology. People normally used petroleum products than then became obsolete, and their disadvantages became more visible to the users. The new technological networks developed through the process, on the other hand, form the platform for new ways of developing innovations. They do so by providing new resources and raw materials for innovations (Krumwiede 1997).
The internet is a communication technology that is as a result of combined different technologies such as communication technologies, networking technologies and computing technology. Many inventions were finally made so as to come up with each of those technologies (Noordhoff 2011). The optic fibre, for example, was invented, and since then drastic changes were made to develop a completely different method of sending information. Data would be sent over extremely long distance with a high degree of consistence and minimal errors. When digital electronics were invented different electronic gadgets like routers, modems, digital computers were produced (Kim 1997). There devices led to massive changes in communication technology all over the world. Looking at it hierarchically, the internet technology is based on smaller different technologies. The different smaller technologies are based on inventions made differently. New innovations in the area of computing have also seen older computing technologies get eliminated. For instance, the invention of digital element led to production of highly efficient and convenient computers (Nussbaum 2005). The older computers got out of fashion and could no longer be used.
Most people and organizations can see the same distance in technology, but because they may have followed different paths previously they will have different views. The different views lead to different innovations. Some organizations are able to develop firm connections between the people, ideas and element that have helped then maintain consistency in their innovation process (Trot 1998). Team work in the invention process is encouraged so as to achieve outstanding technological revolutions (Cabrilo 2012). Edison, for example, is an engineer who took part in development of the light bulb. He gives credit to technological brokerage that led to that marvelous invention. Technological brokerage is a technique that utilizes the combination of the element of the innovation process, rather than making novel innovations, to achieve massive technological breakthrough. For example, the steam engine was linked with ships and entirely changed the international trade. It created a formidable technology after combined two innovations. Brokerage in technology makes organizations easier to advance technology, as opposed to the ideas of developing new technology from scratch (Hipple 1999).
Innovations are also made to improve existing technology (Jon 2010). In motor bikes, for example, innovations made are speeding up the rate of transition as motorbikes as more and more people quickly adopt new technologies. New features on motor bikes are ever being added. In 2001, Honda, the motorbike manufacturing company introduced the ABS system in their motorbikes. Later on other companies joined in and included the ABS systems in their motorbikes so as not to be left behind as the system was becoming more and more popular. Currently most of the manufacturers such as BMW, Suzuki and Harley Davidson are putting the ABS system technology as a standard feature in their motorbikes (Krumins 2010). Only the other day, automatic and semi-automatic transmissions were introduced to replace the manual transmissions. The motor vehicles and other vehicles have computerized the transmissions system and eliminated the clutch lever. These types of vehicles are becoming more and more popular and the trend is going on, signaling a probable phase out of manual vehicles. Currently the vehicle manufacturers are working hard to be on the forefront of these technological advancements (Krumins 2010).
Q2. Value Innovation Concept
Value innovation can be termed as a new marketing and executing strategy that forms the cornerstone for Blue Ocean strategy, defying most of competition based- strategies (Krumwiede, 1997). People believe that a company or organization may create higher values to customers at high costs, or they may create reasonable values at reduced costs (Alina 2011). Therefore, the company uses this strategy to choose an option between reduced costs and differentiation. Companies and organizations that seek to use blue oceans strategies benefit in terms of, low cost and differentiation at the same time (Nussbaum 2005).
It is essential to note that companies have relied heavily on technological advances, such that technological innovation may be said to have been shaping the way organizations and companies operate (Sorescu 2011). Companies have been striving to satisfy buyers’ needs through increased value of products and services at low costs. The last ten years have been characterized by intense competition among different companies as they try to reach their targets and achieve profitable growth rates (Baron 2005). Some companies have been fortunate enough to realize profits and revenues at high growth rates, while others have failed to succeed against the global competition. W. Chan Kim and Renee Mauborgne discovered after a study that the difference between the successful and the unsuccessful lay in the company’s or organization’s strategy used in terms of value innovation. When companies do not use value innovation, they attempt to strive to stay ahead of the global competition by concentrating with their rivals and competitors. However, those who use value innovation do not pay much attention to beating their competitors in the market; rather, they make such issues irrelevant and concentrate with value innovation (Moorman 2011).
All organizations and companies usually strive to be recognized in the market as fast growers, an aspect that makes them have security in their business. This is the reason as to why innovation value has become a part and parcel of companies and organizations. To assess the innovation value, there is a method used to show the value curve for a certain product (Božić, 2011). The value curve is normally represented in the form of a graph, to express how the company or organization goes about its offers to the customers (Alina 2011). The value curve is a crucial aspect of creation of new markets by capturing the state of play in the current market and plotting performance of other alternative products (Krumins 2010).
The value innovation uses the conventional strategic logic and the logic of value innovation based on industry assumptions, strategic focus, customers, assets and capabilities, and products & Service offerings (Lendel 2011).
Graph1: Formulation of an organization’s innovation strategy and a Value Curve illustration
Automatic
Manual
Price ease of use optional features speed accuracy
Source (Trot 1998)
The illustration above shows a value curve expressing how an organization can formulate its innovation strategy using the value innovation concept. In this case, an organization evaluates the value of using a manual product and an automatic product among its customers. The comparison of value between the two enables the company to analyze the best product to use for a certain market space. In this case, the value in terms of price shows that the manual product is more expensive than the automatic product (Trifilova 2009). The value in terms of the ease of use shows that the manual product is remarkably easy to use while the automatic product seems to be quite difficult to use. However, the automatic product has more optional features as compared to the manual product. Also, the speed and accuracy of the automatic product is quite higher as compared to the manual product (Cabrilo 2012).
By using the value curve, an organization can easily understand the competition that it currently faces, the factors that influence the competition in terms of customers, products, services, and delivery of the existing market (Alina 2011). The organization can use the horizontal axis to capture the factors that it is concerned with depending on the product sold (Božić, 2011). In this case, the organization is more concerned with the speed, accuracy, optional features, price and ease of use of the product, both in the manual and automatic state (Jon 2010).
An organization may use a strategy that involves looking into its own industry to understand the existing products in the market. The organization must go ahead and understand the substitute products, and find out the reasons as to why customers may choose one product over the other (Nussbaum 2005). The strategy that the organization should use in determining the innovation value has to use the basic five dimensions (Alina 2011). These dimensions are industry assumptions, strategic focus, customers, assets & capabilities and products & service Offerings. This will enable the company to understand that value innovation is the ability to challenge market assumptions about the strategy chosen by rendering competition irrelevant. In the above example, the organization may finally find that the manual product may be better placed to substitute the automatic product after mapping out the existing market competition (Krumins 2010).
Most companies make a mistake of focusing on competing with other firms that deal in similar products by engaging in similar competition strategy. They ignore other barriers that keep the potential buyer denied in what he/she needs. This leaves out some groups of people unsatisfied and the companies believe that they are groups of noncustomers.
Q4. Example of an innovation learnt this semester
Several innovations have been developed to help companies gain popularity from the customers. Reverse positioning is one innovation that has helped businesses thrive in an amazing way. IKEA, for example, is a business that deals in furniture and known worldwide for its tremendous growth and dominance in the market. Unlike other companies, IKEA works to convince the customers that furniture is a possession that requires replacement after some given time. Normally other furniture making companies try to convince the buyers that their furniture is durable and will not require replacement until after a very long time. IKEA also does not offer after-sale services such as delivery of furniture to the customers’ premises as other companies do (Trifilova 2009). One of the key factors that have helped the innovation succeed is management’s acknowledgement of the four steps of innovation process which are creating, advancing, refining and executing. If one of the steps is not fulfilled, it becomes hard for an organization to see success. In creation step of innovation, creators see possibilities and believe that things can always be modified for the better. After the work of idea creation, the idea advancers take charge. They find support for implementation of the idea. They have substantial interaction skills and can even sell others on the idea and add more support for its implementation. Before the idea is implemented, refiners come in to scrutinize the idea. Their focus is mainly on the workability of the idea though people tend to think that they focus on how it will not work. They make come up with suggestions that will reinforce the idea’s workability (Florkowski 2006). The final step is the execution of the idea. An algorithm is stipulated on how the idea is going to be implemented. Good execution is carried out by a team that ensures participants have played their role till the end. Once the team has done the job completely, then the innovation is considered complete and successful (Kim 1997).
Reverse positioning brings about uniqueness of a business, and the business is thus able to attract its own customers. Another factor that has helped this innovation work is, the possibility of the organization learning the environment, which it is operating (Florkowski 2006). This help to make the competitors look irrelevant in front of the customers. The commerce bank of USA used this innovation and realized tremendous growth and increased profits. The bank gained uniqueness by increasing its hour of operation and improving its customer relations. It allowed the customer to gain knowledge on the exact benefits they are going to reap from the company (Harper 1991).. Focusing on the customer is another factor that helped the workability of the innovation. Knowing the customers, and what they love. Once the need of customers is determined, the next thing to do is to evaluate them using the facts and knowledge that one has. That is being open-minded when analyzing the customers (Leonard 2000).
Lessons learnt
There are lesson we learn from the above analysis concerning new ventures or opportunities. One of the lessons is changing the customers’ incentives. In the earlier years, innovations were meant to develop new technologies in the lab, then producing commodities that would be presented to the customers (Harper 1991). Today, the innovations are meant to give rise to products that customers want after a thorough learning of the customers. Changing the form of management is another lesson we can learn. The management team should comprise of people who have the skills to understand customers. For example, an anthropologist is a much better position to know the customers’ needs than an engineer. So in production, people who have those qualities should be engaged more (Leonard 2000). The heads of companies should be on the forefront of ensuring success of innovations. They have the ability to change the culture of the company with much ease. Companies should also open up so as to acquire new ideas from different areas. They should establish links with scientists and foreign laboratories so as to gain innovations. Another lesson we can learn is the role of creative minds in innovations. Creativity should be applied when dealing with top management’s incentives and financial matters (Lendel 2011).
Companies have come up with means of increasing their popularity such as coming up with strategic innovations. An innovation like reverse positioning helps a company gain an upper hand by being unique in its treatment of customers (Lendel 2011). Several companies like IKEA and commerce bank in America have used the reverse position and have reaped full benefits of the innovation. Different parties take park to realize the success of an innovation (Alina 2011). They include top management of the company, creators of an idea, advancers of the idea, idea refiners and idea executors. The key stakeholders in a business firm are the customers and top management who play crucial roles for a business innovation to work (Kim 1997).
Conclusion
Innovations are improvements made to a product so that is can suit its users in a better way and are the same as technological advances. Technology does not only comprise the hardware and software but also people, ideas and objects involved in the production. Most of the technologies in the world are made of different innovations. An example is the internet. Hence technological advancements are made through team work. Technological brokerage is the technique that utilizes the combination of the element of the innovation process, rather than making novel innovations, to achieve massive technological breakthrough. Today companies are striving to be on the fore front of the available innovations so as to acquire a decent place in the market.
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