Custom «Leading Global Business News Publication» Essay Paper Sample
The current trends in the global economy show that innovation is the most valuable ingredient in running a successful business. Innovation is happening in both large and small-scale companies, implying that every businessperson is striving to use it in running a successful business. According to the economist, a leading global business news publication, innovation is in driving more than half of the economic growth in Europe and the United States. Therefore, it is arguably true to assert that innovation is all over, and every businessperson is striving to use it. In this regard, there is a need to handle innovation in the most suitable manner in order to reap the advantages that come along it. According to Fahey (2002), innovation is extremely crucial in running a successful business; however, it can be confusing and distractive at times.
A company should come up with the most effective processes of managing innovations. This should be geared towards enabling a business respond the market appropriately and at the same time, remain focused on the objectives of the business. Doing so will help a company sustain its operation and compete with other similar businesses. This paper presents a report on the need of a company to set and adopt the best type of strategy for handling innovations. The principal strategy highlighted is the need to channel innovation using different organizational structures. Other essential means to channel innovation also form the basis of this report.
Innovation is usually perceived to be always positive; however, disruptive innovation can be detrimental to the market status of a company. This form of innovation is characterized by its ability to disrupt the status quo at the markets. If an innovation is courtesy of disruptive technology, various market conditions can change including the positions of leading market players. In addition, the value chain from the suppliers to consumers or last customers can change. This means that a company can lose its position within the market, which may lead to a decline in profitability. In order to avoid such eventualities that come with disruptive technology, a company should seek to channel its effect to other assistive stakeholders to help in distributing the innovation.
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This report examined how a leading company that is engaged in the food and beverage industry. In instances where the company has had a breakthrough in innovating new products, it uses partnerships in distributing the innovation. The company does so by seeking alliances with other visionary partners who help in making the innovation a platform to promote the new and the old products. The partnerships formed are usually between the company and other sales agents who disseminate information about the innovation. The company ensue that is new products are publicized enough and at the same time, promoting the older products using such techniques. This can be described better as using one stone to kill two birds. Therefore, channeling the innovation to other partners is used in this sense to reach the final consumers. According to Addison (2003, p. 112) a best selling product begins with a well natured innovation with respect to the market conditions. Therefore, seeking to collaborate with different marketing agents can be useful in handling an innovation. Such channels can reduce the cost of operation because some tasks are shared. In addition, these partners may be consulted as a form of outsourced labor, which is relatively cheaper. Failure of different companies to channel their innovation achievements to other partners may make the innovation less beneficial. In addition, more costs are likely to be incurred when introducing the discovery into the market. Therefore, channeling innovations is the best way to handle it.
In most cases, innovation has been observed to begin by failing. For instance, the case company has had many failures when trying to handle innovations. Such events are associated with the company’s unwillingness at times to share the innovation with appropriate organs. This marks an exceptionally gloomy a nurturing of the innovation, since it denies an organization the full benefits of innovation. This behavior is referred to as bureaucracy. It is associated with shielding innovative ideas from one company to leak to potential and existing competitors. Therefore, the company may refrain from channeling innovation to the final consumers via other agents. According to Addison (2003, p. 115, bureaucracies are the leading silencers of innovation. In this case, the company understands that need to keep business secrete. However, there are clear-cut boundaries that seek to ensure that innovation is handled in the most beneficial way.
The company recognizes the fact that an innovation should be natured in the most effective way in order to reduce the negative effects, especially these that come with disruptive innovation. One can use two known main channels in handling such situations. One is by using partners, and the second is by use of the internal or direct teams, which are able to reach consumers. The use of direct team is better because it is cheap and they have considerable information back ground about the new innovation. Since innovation are also associated with boosting marketing of existing products, using the company’s existing workforce can serve better. This is also another tool that can be used as an internal partnership. When trying to avoid bureaucratic, tendencies, the company undertakes to educate its partners first, especially if the innovation is disruptive. This involves outlining a clear rol out strategy using different channels. Educating partners, both direct teams and external partners are pertinent enhances a smooth flow of introduction of product into the market.
Channeling Innovation to New Markets and Appropriate Customers
In is evident that the disruptive innovation may cause greater changes in some market dynamics. Jain, Fondas, & Triandis (2010, p. 416) assert that most disruptive innovations should be directed to new markets and customers who seem to prefer uniqueness in the innovation to the existing ones. Therefore, this calls for an extensive research about the market because the innovation has no known markets traits. This is because the product is a new product has never been to the markets meaning that there is no customer-product relationship traits are known. A company should seek to understand the actual market dynamics that a new product elicits. This should be done with a lot of consideration of other factors such as the cost involved. This is to avoid making the innovation more of a liability than an n asset. Getting into the market without determining the customers or the markets to target may prove difficult. This is because getting into the market blindly may not get a sense of direction soon as required.
With regard to the customers, innovators should be aware that the end users of a product might not find the need to adopt the new products. This implies that the innovator should play an extra role in convincing the consumers. This situation takes place because a product is new to the people who may not be keen to discover or notice its presence in the market. In handling such matter, the case company ensures that potential a lot of information about the innovation is channeled to the targeted population. In a product lifecycle, there are stages through which it goes before securing a comfortable or a commanding position in the market. This is referred to as early diffusion (Jain, Fondas, & Triandis, 2010, p. 417). At this stage, a company should classify the potential customers into different groups that require different marketing approaches. In this case, there are enthusiasts who may be interested in a certain new product. This group is easier to handle because the only necessary thing is to take the product to them, and they will buy. This group of consumers may be intrinsically motivated by a product and may thus be useful in disseminating information about the product. The second possible group is the visionaries who are usually associated with demanding too much from a new innovation. Other groups of potential consumer may be pragmatists, conservatives who resist change and skeptics who will always be negative about an innovation.
Because of the fact that these types of consumers will always be presents, a company should be prepared well to address them. In the company used as the case in this report, this hurdle is evaded by the introduction of an extensive educational program targeting different markets. This is done by running promotions campaigns within the market thus making potential consumers aware that there is a new product in the market. Therefore, handling innovation in this manner reduces the risks that are associated with it, thus making a business remain profitable and strong within the market.
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Embracing Information Flow
Research has shown that the most resilient organization when it come to innovation have well-established communication channels. In this regard, such organizations act in speed, thus enabling them reach the market truly first or rapidly. This aids in making the innovated products as competitive as possible, meaning that the competitors’ advantage are limited. According to Bordia, Kronenberg, & Neely (n.d, p. 4), information flow is remarkably effective in handling an innovation successfully. This should be done at all levels of an organization to create a homogenous environment where every employee is motivated, this supports any efforts put in with an aim of boosting information flow about an innovation. The overall effect is a well-accepted product thus increased profitability of a company.
For the case company, the management has ensured that the lower level of the staff is involved in driving innovation agenda. This is because the company recognizes that fact that these employees are more conversant with the company’s priorities and direction. Therefore, the senior management can obtain the best information about a new product. This information is exceptionally accurate thus enabling the company deal with any emerging challenges. This is highly effective especially when dealing with disruptive innovations, which always cause serious changes in the market parameters. Sooth information flow is also useful in establishing transparency in innovation issue.
Handling innovation in a transparent manner ensures that the overall management of a new product is effective since the management is confident. Communicating effectively help in avoiding time wasting in the innovation process. This minimizes chances that an innovation may take a different direction, and become useless to a company (Bordia, Kronenberg, & Neely, n.d, p. 4). This is because a company develops a sense of accountability whereby every employee is encouraged to make wise and clear decisions. This increases both personal and collective accountabilities. In other words, a company can be able to recover from mistakes made when handing an innovation issue due to traceability of previous actions that can be accounted for at any time.
According to Fahey (2002), two forms of communication ttake place when channeling innovation. First, a company should ensure that there is an efficient top-down communication. This involves the top management communicating to its workforce about the company’s priorities and objectives. This is usually done in a simple manner, which is backed by evident, measurable advancements. This is mean to keep all employees in touch with one another. Secondly, there is the lateral communication. This form of communication happens among the decision makers of a company with regard to how an innovation can help or destroy a company. This is done by use of brainstorming meetings, which can be said to informal. This allows management to come up with suggestions that can help in improving innovation endeavors since information flow is smooth. Therefore, ensuring a smooth flow of information is one of the best strategies to handle innovations since a company enjoys having a homogenous workforce that is effective.
Managing innovation issues without proper communication channels brings in a model that can result into confusion within the process. This makes an organization vulnerable to negative market response. This is because the process may be uncoordinated, leading to different people pulling in different directions. In addition, the company secretes may leak due to a less cohesive workforce thus giving competitors a fore hand.
Types of Innovation In Business
The type of innovation being pursued also dictates the manner in which the case company holds its innovation agenda. The two types of information can be differentiated from the way they are implemented, implying that each has a unique model of application (Irani & Sharp, 1997, p. 217). The first one is the incremental innovations. In this case, innovation in achieved by building on the already existing knowledge and resources of a company. The case company that thrives in the food and beverage industry has made this possible by encouraging innovation of products that fall into one of the categories already existing. This means that most of the innovations involve a change in flavors, colors, or even nutritional contents of the products. Most of these innovations have close similarities with the existing products.
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On the other hand, the company’s management is not for radical innovation model. This is because the radical innovation model involves a total deviation from the normal or usual procedures of an organization. This model may also call for expensive technological recourses because a company has to begin from scratch. Thereof, the results of this model are an entirely new product, which has to enter the market in that nature. The concept of disruptive innovations can be used to describe this better. This is because it encompasses an altogether new array of changes along the process of innovation. Another important feature of radical innovation is that the existing competence of a company to innovate different products may be rendered obsolete. This is simply because everything is overhauled totally by replacement using new ideas. Radical innovation is also surrounded by high levels of uncertainties. According to Kotelnikov (2011), most radical innovation is sporadic, unpredictable, non-linear, and context dependent, meaning it is completely unpredictable.
These traits are a strong indication that radical innovation is unreliable, especially when a company is weak of handles highly market fragile products like food and beverages. The food and beverage industry is highly sensitive to matter of tastes. This means that new products in this industry as scrutinized by the consumers remarkably closely. Therefore, too much variation from the existing products may affect the company’s public image thus reduce its sales. In this regard, the incremental module is the best for the company because it is cheap, because resources are already available. In addition, it is likely to bring little or no negative effect to the existing market. The incremental module is the most prominent compare to the radical module. According to Irani & Sharp, 1997, p. 203) most companies prefer a continuous improvement of what they have instead of a discontinuous innovation. Therefore, such companies tend to pursue getting better and not getting different.
The manner in which a company handles innovation is particularly critical in determining whether it will come up with new products. This implies that there is a need to determine the effects that are associated with a certain innovation. The most common innovation is disruptive. This means that a company should be aware of the market changes that an innovation is likely to bring and thus prepare properly. Failure to nurture innovation through means c-such as embracing smooth flow of information may also deny a company full benefits that come with innovation. Therefore, a company should ensure that its innovation approaches are carefully nurture and brought to fruition always.
It is essential to handle information using assistive methods. This implies that a company should always seek assistance from partners. This makes it easier for developing ideas, supervising, and execution of innovative projects. Partners may be in a better position to understand the market dynamics and thus help a company sail through a competitive business environment safely. Finally, it is advisable to many companies to engage in incremental innovations because it has numerous advantages over the radical approaches. In other words, a company should always strive to maintain what it has already acquired and add to it accordingly. However, this module may be limiting because it is impossible to come up with unique products.
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