Global Business and Strategy
A large corporation that manages production or delivers services in more than one country, following a decentralised structure.
Apple introducing the original iPhone in 2007 is a classic example of this type of innovation, which involves creating entirely new or significantly improved goods.
What is product innovation?
In economics, this is defined as the value of the next best alternative that is given up when making this.
Opportunity cost
Dyson designing a brand-new type of bladeless fan is an example of this specific type of innovation.
What is product innovation?
Patents, trademarks and trade secrets are all examples of this broader legal concept.
What is intellectual property?
This occurs when a business or country concentrates its productive efforts on making a limited variety of goods or services to achieve higher efficiency.
What is specialisation?
This type of innovation doesn't change the final product itself, but instead improves the method of how it is created, such as Henry Ford's assembly line.
What is process innovation?
A formal agreement between countries that reduces trade barriers such as tariffs and quotas.
What are resources?
Amazon using advanced Kiva robots to speed up how orders are packed in its warehouses is an example of this type of innovation.
Process innovation.
The increased interconnectivity between economies, businesses and people.
Globalisation.
A business achieves this when it can produce goods better or more cheaply than its rivals, allowing it to outperform them in the market.
What is a competitive advantage?
This legal protection grants an inventor exclusive rights to an invention, preventing others from making, using, or selling it for a set period of 20 years.
What is a patent?
Opportunity cost is a fundamental concept because of this basic economic problem, which states that human wants are infinite but resources are finite.
What is scarcity?
Businesses, which transitioned to work from home (WFH) policy during the pandemic, adopting a 'remote-first' policy.
What is organisational innovation?
Differentiation.
A formal agreement between countries that reduces trade barriers such as tariffs and quotas.
Free Trade Agreement (FTA)
McDonald's Golden Arches and Nike's "Swoosh" are protected by this type of intellectual property, which safeguards recognisable signs, logos, or expressions. In Australia, it can be renewed every ten years.
What is a trademark?
When demand exceeds supply, economists generally expect this to happen.
What is an increase in price?
While product innovation usually aims to increase sales revenue, process innovation is almost always aimed at reducing these.
What are production costs (or operational expenses)?
Economists use this term to refer to loops like Apple's ecosystem, which discourage users from shopping with competitors.
While seeking a competitive advantage, TNCs often exploit this economic concept, where the per-unit cost of production drops as the scale of output increases.
What are economies of scale?
Unlike a patent, which eventually expires and requires public disclosure, Coca-Cola keeps its famous beverage recipe secret using this alternative form of IP protection.
What is a trade secret?
This economic system relies primarily on consumer choice and market forces to allocate resources.
What is a market (or capitalist) economy?
Marketing innovation hinges on the operation of these so-called 'Four Ps'.
Product, Price, Place and Promotion
A competitive advantage based on customer perceptions, trust and reputation rather than physical assets.
What is brand loyalty (or brand recognition)?