Principles Of Innovation
List the types of innovation.
Product, process, position paradigm
What is the final stage of the consumers' buying behaviour model?
Post Purchase Behaviour
List any five sources of innovation.
New markets, new technologies, new political rules, limited options, change in behaviour, deregulation, and changes in business models
What is meant by Internal Policy in an organization?
Internal Policy refers to the established standards of an organization regarding proper procedures and employee behavior. To encourage innovation, an organization should:
Make innovating an official part of the Internal Policy.
Ensure workers see innovating as a normal or expected procedure within the organization.
What is intellectual property?
Intellectual Property refers to intangible elements considered "creations of the mind" that are owned by a firm. These properties can be temporarily protected to help a business gain a competitive edge and secure financial rewards from their use.
Peter Drucker mentions that innovation isn't easy. What 3 things did he say it requires?
According to Peter Drucker, purposeful innovation is not just a stroke of luck; it results from:
Analysis, Systematic review and Hard work
Describe the effect of a Disruptive Innovation on existing products already in the market?
A disruptive innovation causes another innovation to come to an end when it is introduced to the market. It renders an existing product obsolete. While incremental innovation fits into an existing business model, disruptive innovation creates an entirely new business model within an industry over a longer time frame.
What must an entrepreneur continue to do with existing markets to arrive at new opportunities?
To arrive at new opportunities, an entrepreneur must continue to:
Study existing markets.
Watch products that are both successful and unsuccessful.
Analyze that information to see how they can take advantage of it.
What is meant by innovation at the macro/national level?
At the Macro/National level, innovation refers to the development of national policies that encourage organizations to be innovative to drive increased economic development and growth. This involves partnerships between all entities.
List the six methods of protecting innovation and creativity.
Branding, trademarks, patents, copyrights, registered design protection, trade secrets
According to Scarborough, what is the difference between 'creativity' and innovation?
Creativity speaks to thinking new things.
Innovation speaks to doing new things (the ability to apply creative solutions to problems).
Between Disruptive and Incremental innovations, which typically requires a "far greater" amount of initial capital?
Incremental Innovations are far more common and have the ability to gain a quicker acceptance rate and moderate but immediate revenue performance.
Disruptive Innovations have longer "gestation periods" but have the potential to produce greater benefits and exponential growth for a firm.
Why is it hard to plan for a new market before it actually exists, and what can be done to solve this problem?
It is difficult to plan for a new market beforehand because it is not predictable and cannot be analyzed in advance.
The Problem: Totally new markets emerge from factors like growth and segmentation that are not visible initially.
The Solution: Entrepreneurs should study existing markets and monitor the success or failure of current products to find gaps they can exploit.
Explain why organizations should not punish failure when encouraging innovation.
Organizations are encouraged not to punish failure because:
Failure is viewed as a natural part of the entrepreneurial process.
It helps workers build a "mindset to keep going".
Fostering an environment where people are not fearful of failure promotes persistence, which eventually brings success and motivates staff to continue innovating.
Explain the differences among branding, copyrights and patents.
Branding: This is the act of giving an organization’s products or services a unique identity. it consists of a mark (brand mark) or a name (brand name) that allows the business to be identified and supports the specific image the business wants to portray.
Copyrights: These are exclusive rights granted to the originator of a "creative work". They specifically relate to literary, dramatic, musical, and artistic works.
Patents: A patent is a title granted by a governing body to an inventor for a specific period of time. It grants the exclusive right to make and sell an invention—such as a machine, manufactured product, or chemical composition—and prevents others from copying or selling it without permission.
Explain the difference between incremental and radical innovation.
Incremental Innovation: These are small, "evolutionary" improvements made to an existing product or service. The goal is to do something better to keep customers interested (e.g., Red Stripe adding new flavors or glowing labels).
Radical (Discontinuous) Innovation: This causes a "paradigm shift" in science, technology, or industry. It involves doing something different by presenting an entirely new product to the world (e.g., the birth of Social Networks).
Describe the effect of a Disruptive Innovation on existing products already in the market?
A disruptive innovation causes another innovation to come to an end when it is introduced to the market. It renders an existing product obsolete. While incremental innovation fits into an existing business model, disruptive innovation creates an entirely new business model within an industry over a longer time frame.
What is the difference between a 'radical' change to a business and a 'progressive' one?
Radical Innovations: These present a challenge that forces an entire change in existing business models.
Incremental Innovations: These are simpler updates that will fit into the existing business model without requiring a total overhaul.
How does establishing environmental laws and regulations "save" businesses?
Ensuring there is no gradual breakdown of environmental systems as a result of innovation.
Establishing environmental responsibility, which prevents businesses from incurring unnecessary social costs that could result from their innovative activities.
What are the areas that trade secrets cover?
Processes, techniques and confidential disc;osure agreements
What is the difference between fixing a part of a product and changing how all the components connect?
Modular Innovation involves redesigning or fixing a specific core component of a product while the relationships between the sub-systems remain unchanged (e.g., replacing a car radio with a better one without changing the car's structure).
Whereas Architectural Innovation is when the nature of the relationships between core components is changed, even if the core design concepts stay the same (e.g., the introduction of electric cars, which changes how the vehicle's internal systems connect and function).
How does "Open Innovation" differ from the traditional "Closed Innovation" regarding where Research and Development takes place?
Closed Innovation: Prior to the 21st century, most innovations happened within an organization and were carried out by employees specifically within the firm's internal Research and Development Department. The mindset is that the organization has all the expertise it needs "right here".
Open Innovation: This is a decentralized approach where the enterprise partners with external sources such as suppliers, customers, universities, and competitors. It uses both internal and external ideas to advance technology, acknowledging that not all needed expertise can be found within the organization.
How can a change in the "buying behavior" of consumers act as a source of innovation for an entrepreneur?
A change in "buying behavior" acts as a source of innovation by creating a shift in demand. If the demand for a particular existing good, service, or process decreases drastically, it provides two specific opportunities for the entrepreneur:
Repositioning: The entrepreneur can change how existing products and services are perceived.
Creation: They can create entirely new products and services to meet the new behavior.
Women are seen as "significant drivers of growth," yet they face two major barriers. What are these two problems?
Lack of financing and inability to access the formal business network.
Why might a business choose to use a Confidential Disclosure Agreement as a method of protection?
A business might choose to use a Confidential Disclosure Agreement to protect its Trade Secrets. These agreements help secure information surrounding a business's operations, goods, or services—such as specific processes or techniques—that provide an advantage over competitors. By using these agreements, a firm can ensure that sensitive information, like KFC's secret formula, remains protected from public disclosure.