Scribd
Upload
56 views5 pages

DT Unit-5 FINAL

Uploaded by

mvharichandana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
56 views5 pages

DT Unit-5 FINAL

Uploaded by

mvharichandana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

INNOVATION

INTRODUCTION
 Innovation is the creation of something that improves the way of life.
 Innovation creates the new or original value.
 Innovation is a process of converting creative ideas into reality.
Innovation is the commercial application of an idea that improves existing products or even
creates new products, services, or industries. Nowadays, innovation is a must for the success
of any organization.
An innovative idea is desirable, feasible, and viable. A desirable idea is one that customers
need, a feasible one uses the existing technological capabilities and a viable idea is profitable.
These three dimensions intersect in “the sweet spot of innovation”.

Differences between creativity and innovation


CREATIVITY INNOVATION
Creativity is an act of thinking about Innovation is an act of creating something
something new
Imaginative Process Productive Process
No resources (Finances, Skills etc.) required Multiple resources may be required
No risk factor There will be risk
Example: Thinking about creating new Example: Actual invention of new
motorcycle motorcycle
Dolin’s Innovation frame work

Types of Innovation
I. Product Innovation
1. What is product innovation?
Product innovation is a type of innovation that is more noticeable for the consumer and it is
related either to the enhancement of a company’s older products, either to the development
of new products which are based on new technologies or which solve new needs of a
consumer.
Product innovation occurs as a reaction to multiple factors – for example, a consumer’s needs
are determined by social, cultural or economical factors, while at a business and
organisational level, product innovation is performed when its purpose is the expansion to
new market segments or the attainment of competitive advantage.
When product innovation is conducted through the development of a new product, it can
either solve an older consumers’ problem in a new (innovative) way, or solve a new
consumers’ problem, which occurred as a consequence of the evolution of the factors
previously mentioned – social, cultural and economical.
2. Examples of product innovation
E-Readers
E-Readers are part of both of these categories – innovative products that meet an older need in
a new manner and a new need, which occurred as a result of the evolution of the social, cultural
and economical factors.

The older need is that of reading. If we were to think about it, until the first E-Readers emerged
on the market, reading was happening in the same way from the beginning – on paper or other
physical surfaces. Well, with the evolution of technology the possibility of creating this type
of digital solution to an older “problem” emerged.
We can also talk about a new need – the need for reading “on the go” which occurred with the
increasing flow from the cities. A book can be read in the same manner indeed but the e-readers
also offer, besides the comfort of reading, the comfort of having a huge number of materials
stocked on a rather small device.

Apple
Apple is probably one of the companies which have the most well-known product innovations.
Starting from the role that the company had in the evolution of the first personal computers in
the 70s, to all the types of smartphones they released in the past 10 years, Apple is surely a
leader on the market when talking about product innovation.

First of all, Apple is one of the pillars of product innovation that deals with the development
of new products and new technologies. Both the first Macintosh, Macintosh 128k and iPhone,
also called iPhone 2G are products that changed the game and revolutionised the industry.
What is more, Apple also excels when talking about product innovation that is developed by
improving pre-existing products. This can be easily observed at the new characteristics and
pieces that are added at each new iPhone.
II. Process Innovation
1. What is process innovation?
Process innovation focuses on the innovation of facilities, skills and technologies used for the
production and delivering of products and services. As opposed to product innovation, the
effects are not as noticeable to the consumers.
Product innovation can result in a decrease in production cost and time and the improvement
of certain processes or the elimination of certain barriers from the production process or
consumption.
Most of the times, process innovation is performed either within the equipment used, either
within the technologies used for developing the product or even within the methods used by
the employees.

2. Examples of process innovation


McDonald’s
McDonald’s is a classical example of process innovation. Even though a few burgers and
some fries do not seem to require a serious process.
The process itself is the one that helped Ray Kroc convince the McDonald brothers, Richard
and Maurice, to sell their McDonald’s franchise at the end of the 40s. You can observe the
food’s production process that made a difference between McDonald’s and the other fast-foods
in the sequence below, from the movie The Founder.
Another example of process innovation achieved by McDonald’s is a call-centre in a town
close to Los Angeles, which takes over the drive-through orders from multiple restaurants
across the USA. This call-centre pick up the orders remotely and transmits them back to the
same fast-food. This helped them win a few additional seconds for each order.
Google
Process innovation does not need to be present only the production’s process case. It can be
carried out in any type of process involved in a company, including processes that are related
to the employees and human resources.
One such example of process innovation in HR comes from Google, which offers its
employees 20% free time from their work to focus on personal projects. In 2004, its founders
Larry Page and Sergey Brin transmitted their idea through a letter:
We encourage our employees, in addition to their regular projects, to spend 20% of their
time working on what they think will most benefit Google. This empowers them to be more
creative and innovative. Many of our significant advances have happened in this manner.
Multiple Google products have indeed occurred as a consequence of this 20% time off. Among
these, we must mention Gmail, Google Maps, Google Talk and Adsense, the last one being
responsible for almost 25% of Google’s annual income.
3. The relationship between Product Innovation and Process Innovation
First of all, let’s talk about the differences. As we have previously mentioned in the beginning,
the main difference between product innovation and process innovation is the fact that
product innovation is truly noticeable to the consumers. For example, in the case of
McDonald’s, we can say that the consumers receive the same burger, even though it has been
prepared in one way or the other.
Speaking about the same example, we can say that process innovation facilitates product
innovation. In an article, Ivey Business Journal gives an example of Samsung which says: “If
we were to give up our production, we would lose.” This highlights the fact that those who
have a competitive advantage through product innovation, would lose their advantage if they
would ignore the production part. By keeping these departments “in-house” you will avoid the
emergence of products that are similar to yours.
Conclusion
What you must keep in mind is the fact that these types of innovation can go hand in hand
with each other or they can be extremely different. They are indeed two of the multiple
types of innovation, but they are two of the most used ones as they work with tangible
resources.
III. Business model Innovation
Business Model Innovation is a very popular type of innovation, especially in the last few
years, that deals with the way in which a company delivers value to its clients (products and
services) and the way in which it captures value (profit).
Business Model Innovation is about changing industries, customer segments, or revenue
sources, where the company can test different ways of monetizing the same product or service.
The most famous examples of Business Model Innovation are companies like Uber, Airbnb,
and Spotify which completely changed the way in which some industries work (look at taxis,
hotels, and the music business).

You might also like