9.2a Innovation Flashcards
Invention definition
Formulation of new ideas for products
Innovation definition
Practical application of new inventions into marketable products or services
What does innovation include?
- Improving business processes to increase efficiency
- Extend the range or quality of existing products
- Developing new and improved products
Types of innovation:
- Product innovation
- Process innovation
What is product innovation?
Launching new or improved products in to the market or finding new uses for existing products
What is process innovation?
Finding more efficient ways of producing existing products
Reasons to focus on product innovation:
First mover advantage meaning:
- Higher prices
- Build early customer loyalty
Reasons to focus on process innovation:
- Reduced costs
- Improved quality
- More responsive customer service
How a business benefits from innovation:
- Improved productivity
- Better quality
- Building a product range
- Build reputation
- Charge higher prices until competitors bring similar products out
Risks generated through innovation:
- Competition may copy your idea
- Uncertain returns
- R&D investment can be very high
- Time consuming
Examples of opportunities of innovation:
- Internet of Things
- Nanotech
- Mass customisation
- 3D printing
What is the Internet of Things?
A scenario in which people are provided with unique identifiers (IP address) and the ability to transfer data without humans required
What happens in nanotech?
Materials, devices and systems are created by manipulating matter at a microscopic level
Opportunities of 3D printing:
- Leaner production
- New revenue streams - launch new products more quickly
Ways innovation affects the functional areas:
- Finance need to raise extra working capital
- Operations need to set budget aside to spend on expensive new machinery
- Marketing need to spend more on market research
- HR need to hire more skilled staff
