How to Attain Competitive advantage Through Innovation

How to Attain Competitive advantage Through Innovation

WHAT IS AN INNOVATION?

 Innovation is a new idea or notion that result in a new service or product. Innovation can make a great impact on the purchase, usage and disposition styles.

• For instance, Microwave ovens have transformed the manner we cook.

• Text messaging and email has transformed the manner we interact.

• Digital cameras and mobile phones have transformed the manner in which we take photos and exchange them with our friends.

•  Reusable and recyclable packaging have transformed the awareness on recycling the products.

• For disposing of the scraps or unwanted products or used products, now on-line sites such as Craigslist, eBay and Freecycle offer innovative means for consumers. 

“Why innovation is seen as a core competency in relation to competitive advantage and how this relates to the current highly competitive state of the global event industry?”

The main aim of each business organisation in today’s highly competitive atmosphere is to overthrow competition by winning new customers. Those businesses which are owners of knowledge symbolise a tool for the creation of innovations. As per Hana (2013), nowadays business organisations find it significant to innovate and encourage an innovative culture.  According to him, knowledge too is very critical in the process of innovation since it symbolises not only significant but also the output of the alteration progression. According to Bartes (2009), the 21st century is footed upon information, knowledge and state-of-the-art economy.  

Today, if an organisation wants to be a success, it has to rely on knowledge of the employees, their creative function and with more relevance is imposed on uninterrupted learning and research and development. Tushman & Nadler (1986) pointed out that business organisations can reap competitive benefit only by managing the business effectively today while concurrently fostering creative for tomorrow. (Tushman & Nadler 1986:74). Thus, for any business, innovation is still visualised as a major driver for economic performance. As per Tidd et al., (2006), business owners who tries to employ technological innovation for manufacturing a new or novel product or service or by using a new process in the course of their manufacturing process, definitely will attain a strategic competitive benefit as compared to its competitors (Hana 2013:82).

As per Global Innovation 1000 study (2011), 7 of the top 10 innovating companies were not actually top spenders of innovation. However, these top 10 innovators are able to maintain a good financial performance than the top 10 R&D spenders (Jaruzelski & Mainardi 2011).

The following table demonstrates how the top 10 most innovative companies like Google, Apple, 3M, Toyota, GE, P&G, Microsoft, Intel and Samsung are expending.

INNOVATION HELPS TO INCREASE THE NETWORTH

The following figure shows how the top 10 innovating companies noteworth outstripped their peers on the Global Innovation 1000 list on the major three major financial metrics such as revenue growth, market cap growth and the EBITDA as % of revenue.  Thus, innovative companies are able to expand their growth in revenues, market cap growth and an increase in EBITDA .

“The four key dimensions of innovation: Product, Process, Position and Paradigm offering events industry examples of each.”

At the phase of product development, a capability to involve actively with the consumers to demonstrate the soundness of the concepts and to evaluate market perspective and risks and the capability to clout the present product podiums into new products .

Xerox Innovation

PROCESS DEVELOPMENT

Process development stage takes many phases. For instance, Xerox introduced the first ever copying machine in 1949 which had to be operated by the experienced operators manually. Xerox later resorted to processing enhancement and market switching by introducing lithographic plate printing.  In 1955, Xerox introduced an automatic version of its copier, and in 1958, it introduced advanced copier machines with after sales services. Thus, for Xerox, it took nearly one decade to improve its process

POSITIONING

Positioning involves placing the invented process or product in a particular context. It refers to how a particular process or product is comprehended symbolically and how they are employed. For instance, Levi-Strauss jeans are a well-known international product which originally produced as clothing material for manual workers then re-branded as a fashion item (elrha.org 2015).

Paradigm innovation

Paradigm innovation refers to the whole sector paradigm-footed innovations which relate to the mental replicas which outline what a business is about. The emergence of community –oriented feeding therapy to eliminate malnutrition is the recent illustration of paradigm shift of innovation as it involves a mixture of a product which is PlumpyNut, a distribution for the whole community (the process), the absence of the role of aid agencies (a paradigm shift) and involving communities to offer a solution to handle the malnutrition at home itself (elrha.org 2015).

At commercialisation phase, a capability to function with the pilot users to phase out the products more methodologically and to coordinate across the whole organisation for an efficient launch (elrha.org 2015).

 “The Consequences for not innovating.”

As per Joseph Schumpeter, the business failures are triggered by incidents which are external to the business. There are many business failures mainly due to constant soaring in the market competition which is triggered by innovation. There will be creative destruction if a business fail to innovate and to swim along with its competitors. Some of the businesses that failed not to invent are Xerox, Yahoo, Blackberry, MySpace, Polaroid and the whole publishing industry

Final Readings

Innovation is like oxygen for any organisation whether it is a small or big one. Business organisations which do not innovate may lose their position in the market. Many companies who do not innovate had disappeared from the market, and the examples are Xerox, Yahoo, Blackberry, MySpace, Polaroid and the whole publishing industry. There are many advantages for the firms that innovate. As per Global Innovation 1000 study (2011), 7 of the top 10 innovating companies were not actually top spenders of innovation. However, these top 10 innovators are able to maintain a good financial performance than the top 10 R&D spenders (Jaruzelski & Mainardi 2011). This demonstrates that if a business organisation wants to grow both vertically and horizontally, it has to innovate and this is needed for their survival and to outperform their competitors.