9.2 Assessing innovation notes (types of innovation, patents, trademarks, kaizen etc)

Question 1

What is innovation?

Answer 1

• Innovation occurs when a new idea is brought to fruition and turned into a good or service that can be used/ sold.
• Having ideas is interesting but the key is to turn them into something that is actually produced & adds value - which is what is meant by innovation.

Question 2

What is the importance of innovation?

Answer 2

• As markets become more open with greater globalisation, & accessing markets & customers becomes easier with better transportation & communication- makes it more important for businesses to get better at what they do.
• They have to innovate to develop what they offer and how they provide it because if they don’t their competitors will.

Question 3

Importance of innovation- the external environment?

Answer 3

• The external environment is ever changing so businesses must either anticipate or respond to this.
• Not only are the needs and wants of customers changing but how businesses compete with each other is forever evolving.

Question 4

What pressures are there for innovation?

Answer 4

Internally & externally

Question 5

What are the external pressures for innovation?

Answer 5

There are changes in the PEST-C environment that create opportunities for innovation & require a business to prepare and respond.

Question 6

What are examples of external pressures for innovation?

Answer 6

• Political change may open up new geographical markets through trade deals requiring a new approach or changes to the product.
• Economic change may create pressure for a lower cost solution to a problem.
• Social change may put pressure on businesses for new environmentally friendly approaches.
• Technological developments may create opportunities for new ways of doing business.
• Competitive pressure from rivals may require businesses to respond or they will lose their market share.

Question 7

Internal pressure for innovation?

Answer 7

• Internally- some employees may be eager to experiment & try out new ideas.
• Emloyees will hopefully be curious & pushing at existing ways of doing things and challenging existing thinking to improve it. This leads to pressure to innovate.

Question 8

Product & process innovation

What may some be aimed at developing?

Answer 8

• Developing new products- which may be the result of pure technological development in which technology moves forward & then the organisation tries to find a use.
• May be the result of research commissioned specifically to meet a customer need that has been identified.
• Provides extra benefits to the customer in terms of what they are buying e.g. faster/ better designed/ longer lasting.

Examples include smartphone, electric cars & 3D printing.

Question 9

What does process innovation look at improving?

Answer 9

• Looks at improving how the business is run.
• If the aim was to make operations more efficient/ faster- the use of digital technology can help organisations track resources, monitor workflows & measure quality at all stages- therefore improving the overall process.

Question 10

What else will process innovation improve?

Answer 10

• The transformation process & customer experience.
• Also affects how we work, communicating with colleagues globally through programmes such as Skype means teams can be made up all over the globe and you can work from home.

Question 11

Value of innovation?

Answer 11

• Innovation of some form is almost certainly necessary to remain competitive & to maintain the profitability of a business.
• Depending on form of innovation, it will enable a business to offer better quality, lower costs, faster delivery & more reliability.
• All of the developments can help make a business more competitive.

Question 12

Value of innovation -risk?

Answer 12

• Innovation can be risky!
• Many new ideas fail to come to market & if they do, many fail!
• Many ways of improving the process do not come to fruitation or prove less successful than hoped.
• Managers must consider the resources involved, likely returns & risks involved when deciding whether or not to invest in innovations.
• THE IS AN OPPORTUNITY COST HERE!

Question 13

The ways of becoming an innovative organisation.

To develop an innovative organisation, managers need to create an environment where…..???

Answer 13

• It is acceptable to fail- (some idead will inevitably fail, take up time & money before realising they won’t work. Managers must accept otherwise if failure = punished- people won’t try anything new)
• There is funding available for experimentation & for trying new things. (If all of a budget is allocated to existing products-innovation is unlikely to take place)
• It is good to share (Sharing is encouraged - working with other departments, sharing ideas and avoid the ‘silo effect’ where people only see the importance of their department and only communicate with these individuals.)

Question 14

Becoming an innovative organisation

What does Teamwork enable employees to do?

Answer 14

• Bounce ideas off each other.
• Challenge each other.
• Share different skills, experiences & perspectives.

Question 15

Becoming an innovative organisation

What must managers think carefully about when building teasms?

Answer 15

• Think carefully to ensure they function effectively.
• Its important to balance the team to ensure there is the right mix of skills.
• To build effective teams from internal staff means the business must have the right skills in the first place, which highlights the importance of recruitment & training.
• Innovative organisations need to attract & retain talented employees.

Question 16

What are the key factors in creating an innovative organisation?

(4)

Answer 16

Leadership- Sharing is encouraged - working with other departments, sharing ideas and avoid the ‘silo effect’ where people only see the importance of their department and only communicate with these individuals.

Listening- customers, partners, suppliers, colleagues. What is working, what isn’t working, how can it be improved - innovation is simply a new way of solving a problem.

Intrapeneurship - individuals coming up with ideas in their teams and follow them through - aids retaining the best staff as it provides them with a way to develop and enhance their careers.

Benchmarking - identifying the best in their field and try and learn from them.

Question 17

What is Intrapeneurship?

Answer 17

• Occurs when individuals come up with ideas within their division, department, team or business unit and follow them through.
• This requires a culture which supports such efforts and encourages and rewards initiative.

Question 18

What is kaizen?

Answer 18

Refers to a process of continuous improvement. This is a management approach in which employees regularly look for small improvements in the way they do their work.

Question 19

What is within the kaizen process?

Answer 19

Standardised work.

Make problems visible.

Develop counter-measure.

Determine root cause.

Hypothesise solution.

Test hypothesis.

Implement solution.

Question 20

What may a business get intellectual property protection for?

Answer 20

• The names of the products/brands.
• Inventions.
• The design or look of the products.
• Things that are written, made or produced.

Question 21

It is possible to have more than one type of protection for a single product. How might this be?

Answer 21

• Register the name & logo of a product (trademark)
• Protect a products unique shape as a (registered design).
• (Patent) a completely new working part.
• Use (copyright) to protect drawings of the product.

Question 22

What does copyright protect?

Answer 22

Literary works (including writing), art, photography, films, TV, music, web content, sound recordings.

(automatic right)

Question 23

What do trademarks protect?

Answer 23

Protect names, logos, jingles.

Question 24

What do design rights protect?

Answer 24

Shapes of objects.

(Automatic right)

Question 25

What does **registered design** protect?

Answer 25

Appearance of a product including shape, packaging, patterns, colours, decoration. (Need to be registered)

Question 26

What do **patents** protect?

Answer 26

Inventions & products e.g. machines and machine parts, tools, medicines. (Need to be registered!)

Question 27

How much innovation?

Answer 27

* Whilst improving products & processes is important, businesses will differ in terms of how much emphasis they put on innovation. * In some cases- a business will make new product development an essential part of its strategy. * In other cases, businesses will focus more on following others.

Question 28

How much innovation Why is being innovative risky?

Answer 28

* Does not guarantee success! * It uses up time, money and other useful resources and may not lead to commercial rewards. * Its therefore risky & some businesses may prefer to follow the innovation of others rather than try and lead from the front.

Question 29

Innovation What is the danger of following others?

Answer 29

* The original innovator gains a first mover advantage; this means it establishes a clear lead in the market and develops such brand loyalty that it is difficult for followers to take away customers if they enter the market later. * The innovator may also protect its ideas through patents & trademarks making it even more difficult for those entering later to make much impact.

Question 30

How much innovation What are the advantages of following others?

Answer 30

A business may be able to learn from the mistakes and difficulties of the first mover.

Question 31

What is Disruptive innovation?

Answer 31

* Was developed by **Clayton Christensen.** * Describes innovations that **create new markets** by **discovering new groups** of **consumers.** * This can be achieved through **using new technologies**, developing **new ways of doing business**, or **using old technology in a new way.**

Question 32

Disruptive innovation What did Christensen argue?

Answer 32

Whereas innovation often simply improves existing products, disruptive innovation brings about very significant change for both those innovating & for the established businesses that find themselves about to be replaced.

Question 33

When disruptive innovation occurs, what is the key question for businesses ?

Answer 33

Whether to abandon what they do already or hold on to the old approach.

Question 34

The impact of innovation on functional areas Human Resources?

Answer 34

* The ways in which employees are managed & rewarded must encourage them to bring ideas forward & share them. * Management must reward initiative & thinking of how to develop- even if just through praise. * A culture of trial & experimentation needs to be developed. * The organisational structure, employees must not draw clear lines between jobs and must be willing or able to ask for advice and ideas from other departments. * Collaboration will be important.

Question 35

The impact of innovation on functional areas Finance?

Answer 35

* Finance - Money will need to be made available for R&D, may require finance externally. * Innovation projects will need to be evaluated, need to assess the payback period and return on investment.

Question 36

The impact of innovation on functional areas Marketing?

Answer 36

* Initial stimulus for innovation may come from market research. * Insight into why customes are dissatisfied with the existing offering may provide initial idea for innovation. * Once developed, new ideas may provide question marks to add to the business portfolio.

Question 37

Impact of innovation on functional areas Operations.

Answer 37

* Operations - develop new products may require new skills and techniques to develop the idea. * Process innovation may enable more efficient or more accurate operations which can aid competitiveness.

Question 38

What are the different ways a business can become more innovative?

Answer 38

Kaizen Research & development Benchmarking Intrapreneurship.

Question 39

What is benchmarking?

Answer 39

A tool for continuous improvement. It is the process of measuring the performance against the best in the industry. It means learning from others, using their knowledge & experience to improve!