Innovation process

From CEOpedia | Management online

Innovation process is complex phenomenon of dissemination of new ideas, technical and practical application, accompanied by specific economic and social effects. Innovation process includes all phases of technological change, invention (idea), innovation and diffusion (dissemination).

Product innovation process

The innovation process - can be linked to the life cycle of the product, which is made up of following stages: introduction, growth, maturity, decline, withdrawal. Product life cycle, especially in the first phase (introduction of a new product on the market) includes final results of innovation process performed in company. Prior to the introduction of a new product on the market, company has to design and develop it in process of innovation. It consists of:

  • The testing phase, where you need to be searching for new services, ideas, products and information
  • The development phase in which you are improving existing services, ideas, products and information
  • Designing which means translating requirements into understandable descriptions, that are later used in the manufacturing processes
  • The final step is implementation which describes the introduction of services and products in the market

Product Life Cycle

Product Life Cycle can be described as the progression of a product throughout its life cycle. There are four stages of a product. They include, Introduction to the market, Growth, Maturity, and finally, Decline.

  • The Introduction Stages describes the moment when a company reveals their product to the audience. In the beginning, sales are relatively low because the product doesn't have much recognition. Costs to launch the product can be very high-research and development, market analysis, consumer testing is a must to introduce a product.
  • The next stage - growth, usually is identified by strong progress in sales and profits. By the promotion plan, customers are encouraged to purchase the product. As the company gain benefit from the economies of scale in production, the profit margins along with the amount of profit will rise. At this moment most companies invest money in marketing, promotional activities to take as big as possible advantage from the growth stage.
  • This stage of the cycle a product is stable and the goal for the producer is to control the market share they developed. Only a few buyers are new, most of them are repeat buyers. In this stage competition is much stronger, understandably, that effect in aggressive marketing. Businesses must invest carefully in any promotional and pricing programs they undertake. Companies should also consider development of their product to gain a competitive advantage.
  • The last is Decline Stage at this moment customers go toward, look for other products and sales decrease. Competition is growing in strength, weaker businesses are leaving the market. Rest of competitors are trying to make their products more interesting or gain some profit by moving to cheaper markets or switching production methods to less-expensive. Successful actions benefit in growing sales, otherwise, sales stabilize or start to decrease

Innovation process

Understanding of the concept of the innovation process requires proper definition of innovation. Most original and most widely used concept of innovation was developed by J. Schumpeter. Innovations are characterised as:

  • introduction to the production new products or improvement of existing products,
  • improve or implement a new production process,
  • development of a new method of distribution of products,
  • entering to the new market
  • the use of new consumables or raw materials for the production,
  • introduction of a new organization of production.

Other types of innovation processes

See also:

Examples of Innovation process

  • Google: Google is an example of a successful innovation process. The company was founded in 1998 by two Stanford students, Larry Page and Sergey Brin, and has since become one of the largest and most influential technology companies in the world. Google has developed a number of innovative products and services, such as its search engine, Google Maps, Google Docs, and Android OS. In addition, Google has been a leader in developing and introducing new technologies, such as its self-driving cars and artificial intelligence, which have revolutionized the way we interact with the world.
  • Apple: Apple is another example of a successful innovation process. Apple has been a leader in introducing new technologies, such as its revolutionary iPhone, iPad, Apple Watch, and Mac computers. These products have revolutionized the way people interact with technology and have changed the way businesses operate. Apple has also been a leader in the development of software, such as the iTunes Store and App Store, as well as cloud-based services, such as iCloud. Apple has also created a new type of retail experience called the Apple Store, which has revolutionized the way people shop.
  • Tesla: Tesla is an electric vehicle company that has revolutionized the auto industry with its innovative products and services. Tesla has embraced a number of innovative technologies, such as its Autopilot system, which allows drivers to use semi-autonomous driving features. In addition, Tesla has developed revolutionary battery technology, which has allowed them to create electric vehicles with longer ranges and faster charging times. Tesla has also developed a network of Superchargers, which allow drivers to recharge their vehicles quickly and conveniently.
  • Amazon: Amazon is a world leader in e-commerce, having revolutionized the way people shop online. Amazon has developed a number of innovative products and services, such as its Amazon Prime subscription service, which provides customers with free two-day shipping and other benefits. In addition, Amazon has a wide range of products and services, such as its Kindle e-reader, Amazon Web Services, and Alexa voice assistant. Amazon has also developed a number of innovative retail concepts, such as its Amazon Go stores, which allow customers to shop without having to wait in line.

Advantages of Innovation process

The innovation process has numerous advantages for businesses and society.

  • It leads to the development of new products or services which can provide a competitive edge or offer a unique benefit to customers.
  • Innovation can drive business growth and contribute to economic development. It creates new markets and jobs, and can help businesses to become more efficient and productive.
  • It can also help to improve customer satisfaction, as businesses can develop products or services that meet customer needs more effectively.
  • Innovation can also lead to improved quality and safety of products, as new technologies can be used to create more reliable and effective products.
  • Additionally, innovation can lead to new technologies that can help reduce environmental impacts and create more sustainable businesses.
  • Finally, innovation helps to encourage creativity, which can lead to new ideas, processes, and products that can help to drive economic growth.

Limitations of Innovation process

The limitations of the innovation process include:

  • Limited resources - Innovation requires resources, such as money, personnel, and time, which may be in short supply.
  • Organizational culture - If organizations lack an open and creative culture, it may be difficult for new ideas to be accepted and implemented.
  • Limited knowledge - An organization's limited knowledge of the problem or market can inhibit progress.
  • Regulatory constraints - Regulations and government policies may hamper innovation.
  • Lack of customer focus - An organization may focus too much on internal processes and not enough on customer needs.
  • Lack of collaboration - Organizations may not collaborate effectively with other organizations or individuals to develop innovative solutions.
  • Risk aversion - An organization may be unwilling to take risks, which can reduce the chances of innovation.
  • Lack of motivation - Employees may not be motivated to innovate if there is no clear reward or recognition for doing so.

Other approaches related to Innovation process

Innovation process is not limited to one approach and there are other related approaches that can be used to understand the phenomenon. These include:

  • Design Thinking: This approach focuses on the user experience and looks at the problem from the perspective of the user. It is an iterative process that involves understanding the needs of the user, generating ideas to address those needs, and testing the solutions to ensure they are effective.
  • Lean Startup: This approach is focused on creating a product or service quickly and effectively, with the goal of minimizing waste and increasing efficiency. It involves creating a minimum viable product, testing it with customers, and iterating on the product until it meets customer needs.
  • Agile Methodology: This approach is based on the idea of continuous development and delivery, with the goal of producing a product or service that is constantly evolving to meet customer demands. It involves breaking down the product into smaller components, developing each component individually, and then integrating them together.
  • Systems Thinking: This approach looks at the entire system rather than individual components, and focuses on understanding how the components interact and affect one another. It involves looking at the problem holistically and using feedback loops to understand the behavior of the system.

In summary, the innovation process involves a range of approaches and techniques, each of which has its own unique strengths and weaknesses. By understanding and applying these approaches, organizations can better understand their innovation process and develop more effective solutions.


Innovation process — recommended articles
Innovation — Dominant design — Value innovation — Innovation and change — Total Innovation Management — Radical innovation — Organizational innovation — Disruptive innovation — Innovation models

References

Author: Aleksandra Godos, Krzysztof Nagaba-Poniatowski

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