Role of Innovation
Business Management and Enterprise (Year 12) - Management (U3)
Innovation is the process of copying, modification, adaption and/or transformation of existing ideas into new and creative ideas, in the production process for goods/services. It is the commercial exploitation of new ideas. Innovation includes the following:
The introduction of a new good/service
An improvement made to an existing good/service
An improvement made to the operating procedures of a business
Research and development (R&D) is the scientific research and technical development of new products or processes.
There are many different types of innovation:
Product – The creation of a new product or an improvement to an existing one.
Service – The offering of a new or improved service.
Process – An improvement made to the operating procedures of a business, or the way production takes place.
Innovative organisations tend to share 5 common features:
They have a climate and internal culture that encourages innovation
They tend to focus on understanding the needs of the consumer.
They have an efficient system of delivering goods/services to the customer.
They have sufficient resourcing of R&D.
They possess an effective system for turning ideas into products.
The Innovation Process
Innovation usually occurs in the following way; the itali represent the universal steps:
A new idea is presented.
The screening and concept test occurs. The product can either be rejected or can move on.
If it moves on, it will reach the thorough screening stage. Market research will also take place. The product can still be rejected or it can move on.
The costs are worked out and compared against the budget.
A prototype is then built. Changes can still be made to the product.
The product is then tested and the market acceptability is analysed.
The product is manufactured.
The product is launched.