Innovation
Over the last few decades, innovation has become widely recognized as both a major goal of economic activity and one of the most important instruments through which organizations and countries gain and sustain competitive advantage in globally competitive marketplaces (Fonseca 2002). At the organizational level, some claim that innovation is a key functional activity in organizations, in much the same way as marketing or finance is. Product innovation is then thought of as a routine operation like any other that organizations perform. Others suggest that innovation is a key survival strategy for organizations because it enables more rapid adaptation to turbulent environments. Innovation then becomes a primary indicator of an organization’s ability to adapt to its environment. Over the past few decades, this acclamation of innovation has become highly prominent as technological and scientific advancement, particularly in information and communication, increasingly affects every aspect of people’s lives (Fonseca 2002).
Firms innovate in direct, purposeful and intentional responses to objective changes in their environment, so that they can achieve a new equilibrium. The future competitive positioning is a matter of forecasting and of detecting shifts in consumer preferences or in detecting latent unsatisfied demands. Acquiring this information involves an effort that is similar to the application of the scientific method. Second, there are those who understand innovation to be a social, political and behavioral process, reflecting the position of evolutionary economics (Fonseca 2002). Innovation is an important part of management for businesses. Without innovation businesses would remain stale and it cannot create changes. Innovation makes things happen for business. It can help an organization to change the landscape of its market and improve the business standing against its competitor. Innovation helps the company provide a better service to its clients. Innovation makes a client’s life easier and it makes the client have lesser concern on his/her other worries. Innovation helps the client save more time and effort in doing things of importance to him/her.
Why firms innovate/Reasons for innovation
Developing an innovative culture is critical if innovation is to blossom within the organization. It’s true that innovation can spring up in the most controlled environments, just as flowers can force their way through the cracks in a sidewalk. But for innovation to thrive, for it to be continuous and consistent, the organizational culture must encourage and nurture it. Innovation is the product of knowledge of customer needs, of market trends, of competitors’ offerings, of distributors’ concerns, of changing technologies and empowerment which is the combination of autonomy and responsibility. The culture in which innovation is most likely to flourish is one in which employees are encouraged to accumulate knowledge continually (Oden 1997). It is a culture in which open communication is the norm, in which employees have easy and complete access to information. It is an environment in which all employees are empowered to act on their accumulated wisdom in order to generate continuous innovation. It is clear that innovation blossoms in a favorable culture. When employees are given free access to information, when they are allowed and encouraged to enter into partnerships and learn with others inside and outside the organization, innovative ideas multiply. A company’s most important innovations often spring from such partnerships with other employees; with customers, suppliers, and distributors; even with the community in which the organization operates (Oden 1997).
Companies need to be innovative because it can help them compete with competitors. When a firm presents new and innovative products more clients will subscribe to them and be loyal to them. Companies need to be innovative because it will help in increasing their profitability. Clients’ needs are changing thus a company needs to offer innovative products that will meet the needs of the clients. If the clients discover that the company offers innovative products the tendency for them is to buy often and buy in bulk from the firm thus the company gains higher income and profits. Companies need to be innovative because it will help them enter into a new market. Innovation will help the entry into a new market easier even if the firm is not known to the new market. Moreover companies need to be innovative because it will help them create a unique image. Some companies are known by the quality of their products, some are known through their advertising strategies, while others are popular because of the packaging of the products. To set it apart, a company needs to have products that others do not have. By doing so the company creates a different image that will attract clients.
Innovation examples
Apple Computer Company revolutionized the personal computer industry and epitomized the rise of clean industry in the New West. Located in the Santa Clara Valley, in California, the company’s first product was the Apple I, a single-board computer with on-board read-only memory (ROM), which sold for about 0 without a monitor or keyboard. Orders instantly soared, and Jobs and Wozniak quickly brought out the Apple II, which included a keyboard, color monitor, and expansions for peripheral devices (Birzer & Schweikart 2003). In 1984, Apple introduced the Macintosh, which was aimed at the business and education markets, by which time the company had already not only changed American industry but had reshaped entire areas of the West around silicon (Birzer & Schweikart 2003).In 1994 Apple computers launched a new line of computers based on the PowerPC processor chip. The creation of the new chip was a joint venture between Apple Computers, IBM, and Motorola, and because the new chip was capable of being compatible with the market leading Intel chip, it was marketed as a major breakthrough in computer technology. If emulation software was purchased by a consumer, the consumer could run both software made for Apple computers and software made for Intel PCs on the same Apple machine (Gottinger 2003). The results from the introduction of the new product were not everything Apple had predicted or had hoped for. The increased competition from the PowerPC chip forced Intel to slash the price of their Pentium chips by 40 per cent. Thus Apple did not live up to its promise of cheaper computers (Gottinger 2003).
Apple Computers Inc is considered to be one of the innovators in the computer industry. It brought about different changes to the industry; these changes are still visible in the present. The company makes further use of technology by using it as a means for the organization to provide easier way for the clients to transact business with them. Apple sells Computers, Computer Softwares, Ipod/MP3 player and Iphone/Cellular phone. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. It also serves as a meter of how products are designed. Apple instituted innovations in its computer products wherein it introduced a much sleek design for its computer products. It also was the company who started the trend for low cost computers. The innovation was effective since other companies followed and imitated the designs of their computer products. Apple introduced innovation through its I-pod mp3 player. Apple’s I-pod mp3 player is one of the most popular mp3 players available in the market. It has evolved from a simple mp3 player into a portable device wherein the user can watch movies or videos through it. I-pod changed the image of earlier digital players. The earlier players were known to be too big, not able to play various kinds of files and had features not meeting the demands of the clients. I-pod created a new trend in portable music and video players due to its size, function and unique qualities. Apple introduced innovations of cellular phones through the I-phone. I-phone emphasized the use of touch screen technology on cell phones. It created innovations in the video and music browsing abilities of a cell phone.
What must firms do to stay competitive?
For an enterprise to succeed in global competition, it must develop new products and new businesses in less time with higher quality than its competition. There is no question that the new product and new business development processes themselves must be highly effective and efficient. However, that alone will not ensure that a company’s new products and new businesses will be competitive. The product and business development processes must be supported by an appropriate culture throughout the enterprise. A growing body of research indicates that the individual innovators and intrapreneurs must have an organization that supports, encourages, and fosters innovation for the company to succeed in the long run. In short, for an innovative company to succeed, it must have an innovative culture. The need to be innovative and the need to explore new approaches in the future are integral parts of the company’s culture. Members of an innovative organization recognize that every company and every person are part of a long chain of customers and suppliers. Each company and person is a customer to its suppliers and a supplier to its customers (Bessant, Pavitt & Tidd 2001). To stay competitive a firm needs to have a culture of innovation wherein the company and its personnel have the capability to innovate products at the fastest time possible. A firm needs to train their personnel to devise means to introduce new products unique to the market. To stay competitive a firm needs to have an effective research and development group that will help the company to know the competitors products, know the needs of the personnel and innovate products that will attract clients.
References
Apple Inc 2008, Company Profile, viewed 23 October, 2008,
<http://www.apple.com/>.
Bessant, J, Pavitt, K & Tidd, J 2001, Managing innovation:
Integrating technological, market and organizational
change, Wiley, New York.
Birzer, BJ & Schweikart, L 2003, The American West, Wiley,
Hoboken, NJ.
Fonseca, J 2002, Complexity and innovation in
Organizations, Routledge, London.
Gottinger, HW 2003, Economies of network industries,
Routledge, New York.
Oden, HW 1997, Managing corporate culture, innovation and intrapreneurship, Quorum Books, Westport, CT.
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