9.2a - Innovation Flashcards
Invention definition
The formulation of new ideas for products
Innovation definition
The practical application of new inventions into marketable products
What does innovation include?
- Improving processes to increase efficiency
- Extending the range or quality of existing products
- Developing new and improved products
- Adding value to existing products
Product innovation definition
Launching new or improved products into the market or finding new uses for existing products
Process innovation definition
Finding better or more efficient ways of producing existing products
Advantages of focusing on product innovation:
- First mover advantage
- Added value
- Diversification
- Higher prices
Advantages of focusing on process innovation:
- Reduce costs
- Improved quality
- More responsive customer service
Advantages of innovation:
- Improved productivity
- Better quality
- Build a product range
- Charge higher prices until competitors bring similar products out
- Innovative reputation
Disadvantages of innovation:
- Competition may copy your idea
- Uncertain returns
- R&D investment cant be high
- Time consuming
How can innovation effect 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
Examples of opportunities innovation has created:
- Internet of Things
- Nanotech
- Mass customisation
- 3D printing
Internet of Things definition
A scenario in which people are provided with unique identifiers and the ability to transfer data over a network without required human-to-human interaction
Nanotech definition
The creation of materials, devices and systems by manipulating matter at a microscopic level
Advantages of 3D printing:
- Leaner production
- New revenue streams (launch new products quicker)
What are the stages of new product development from idea to launch?
- Idea
- Analysis and screening (seeing if it can be produced and sold at a profit)
- Development (working prototype)
- Value analysis (make product good value for money)
- Test marketing
- Launch
