In: Categories » Business » Business development » Business Strategy Innovation and Product Innovation
|
It is interesting to note how many companies in recent years have adopted ‘‘innovation’’ as a core value or as part of their mission statements. If we as a society have moved from the Information Age to the Knowledge Age, then this relatively new emphasis on innovation is quite logical. When information is ubiquitous and is no longer a source of competitive advantage, it is the innovative use of that information (via knowledge) that differentiates people, companies, and nations. Innovation may become the basis of all competition in the future. Innovation is the new competitive arena where present-day gladiators, equipped with similar information and access to similar resources, try to outsmart one another to victory. As we work with and read about corporations today, we see the focus of innovation being placed primarily on the products that they are creating. Go to a company’s Web site. If they talk about innovation or have an Office of Innovation, it is frequently related to the work done in their Research & Development labs. Innovation is usually thought of as invention. Innovation is usually new technology being turned into something unique and tangible that the company can sell. For those companies with strong R&D departments, this focus on the invention of innovative products is probably a key element of their corporate strategy. There are, however, other elements of a corporate strategy beyond innovative products that can help companies compete in their markets. Besides having a product to sell, companies have to make that product and then get it into the hands of customers (and meet their customers’ needs). To do this, companies create specific functions such as manufacturing, sales, distribution, and marketing. These functions and how they interrelate make up the company’s business model. The effectiveness and efficiency of the business model is a critical element of a company’s strategy. Michael Porter, the corporate strategy guru at Harvard Business School, highlighted the importance of ‘‘fit’’ of the functional activities that make up a company’s strategy when he wrote, ‘‘Strategic fit among many activities is fundamental not only to competitive advantage but also to the sustainability of that advantage. . . . Positions built on systems of activities are far more sustainable than those built on individual activities.’’ The implication here is that the most innovative product on the market may not be able to compete against a less advanced product that has a unique or superior business model. Dell Computer is a successful company because of its innovative business model (selling customized computers via the Internet and use of a very strong supply chain management), not because of its superior computers. Therefore, companies that do not have a world-class R&D capability may still be able to compete effectively in markets if they focus their efforts on building a superior business model. Given the strategic importance of a company’s business model in its ability to compete in the marketplace, it is logical that efforts put into improving the business model could provide real value to a company. If that is true, then companies should place at least as much ‘‘innovation’’ focus on the other elements of the business model (and how they interact) as they currently do on the product side. Strategy innovation is a process of applying innovative thinking to the entire business model of a company, not just to its products or inventions.
|
legal disclaimer
1) Our website is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringements, please read the Terms of service and contact us to investigate the problem.
2) The E-articles directory team is not responsible for inaccuracies, falsehoods, or any other types of misinformation this tutorial may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here. Please read the Terms of service
Useful tools and features
If you like this article (tutorial), please link to it from your web page using the information above. Linking to this page, this is the only way to help us improve our service, the same time providing your visitors with a way to improve their online experience.
related articles
A strategy innovation process may not be right for every company. However, it is difficult to cite what type of company would not benefit from understanding their customers better, gaining valuable foresight about their emerging marketplace, and considering how changes in their business model could provide a competitive advantage. If your company fulfills these requirements, you can benefit from a strategy innovation initiative or an ongoing strategy innovation process. Listed below are those types of...
|
|
The strategy innovation process is a method for creating a portfolio of innovative, new business opportunities that could become the basis for a new strategic direction for your corporation. Corporate teams that have taken these journeys liken themselves to reconnaissance teams, sent by their companies to explore the strategic frontiers of their industries. The Strategic Innovation Process is a series of phases, not a linear series of steps By carrying out the phases, your company will avoid some of the proce...
3. Flexibility of the Discovery Process and Strategic Innovation
The purpose of a strategy innovation initiative that is right for your company will typically depend on the following factors: Size of company Size of industry Type of industry Strategic frontier Degree of innovation desired Size of Company In general, larger companies have more resources available for strategy innovation than smaller companies. Yet the process of identifying new business opportunities is equally important, if not ...
4. Risks Involved in the Discovery Process and the Strategy Innovation
There is very little at risk with a strategy innovation initiative, other than the time and money invested by the team. The internal team sets the overall budget so that costs (primarily in the Exploring Phase) can be controlled to whatever level represents a reasonable investment in the company’s future. We have never encountered an initiative where discussions with customers and industry experts did not lead to valuable insights for the company. The only question is whether the impact of those insi...
5. Strategy Innovation as a Source of Corporate Renewal
Strategy innovation is often considered the calling card of startup companies looking to enter already-existing markets. However, established companies also use strategy innovation to their advantage, if they have the instinct for it. We recognize this instinct as a strong, internal emphasis on corporate ‘‘renewal.’’ The instinct for renewal is something beyond a cultural norm; it seems to be embedded in the organization’s DNA, what it sees when it looks in the mirror. These companies...
6. The Corporate Dilemma of the Current Business vs. the Future Business
It is not easy for the senior management team of an existing company to navigate the white water conditions of a dynamic marketplace. Everything seems to be constantly changing—products, technologies, competitors, customer needs, distribution channels, and so on. How should the company respond? Is it better to take action or wait for the market to settle down? Should the company stick with their current strategy or move to a new one? On the one hand, the company must manage its current business, whic...
7. Developing Applications with the User in Mind
The corporate scenario described in this article is an example of a common problem in the development of management support systems: in both systems design and implementation, too little attention is given to the needs and perspectives of the end user. Inadequate attention to ease of use in system design and lack of appropriate training and conversion preparedness affect applications aimed at salespeople, production people, administrators, middle managers, and senio r management. These shortcomings can be observed in companies across ...