What is Innovation?

Write about the Trends in Global Business Environment for Dynamic Nature.

Any business organisation work on the basis of the values and principles of that drives the objectives and goals.  To fulfill these goals and objectives the company undertakes several strategic management decisions as to how to take the business forward. Some of the companies undertake expansion as the growth objective where some undertake the needs and requirement of the consumers as the major objective. When a company has to grow and expand according to the changing needs of the customers as well as the dynamic nature of the business environment, they have to undertake the process of innovation (Souto 2015).

Innovation is the process of developing and improving the existing idea in order to make it in sync with the changes in the demand as well as in the technology. There is a major difference in the concept of innovation and invention. Invention is the creation of a new concept or a new idea, whereas innovation is the process by which this invention can be improved or developed in the future.  In a business set up, innovation can be either in the process of business or in the product or service, depending on the strategic management decisions taken by the company (Suroso and Azis 2015). The organizations that is going to be further discussed it he assignment is UBER, Airbnb, Ebay. All the three companies are known for their ground breaking innovation driven agendas. They of these organizations have made a benchmark in the industry setting a new trends and opening new opportunities in an otherwise saturated industry.

According to Souto (2015), one of the major objectives of a business enterprise is to expand and grow along with several others based on the values of the company.  Innovation plays a big role in growth and expansion of the business. A company can either choose to innovate a new feature and add it to the existing product or service in order to improve it. It can also come up with an entirely new product based on an existing idea. Innovation plays an important role in the process of strategic management as it assures the company to develop a product, reach out to a new market, gain attention of new potential customers as well as improve the sales and profit in the long run. In case of product innovation there is usually a research and development team that run experiments, research and analysis on the innovations and the drivers that initiate innovation.

Innovation in Strategic Management

For an organisation that is a new venture it is important to have an innovative approach especially in the current scenario as the customers have access to all the needs and requirements. For example: Airbnb is an organization that operates in the tourism industry but the concept and the service that the company had come up with was innovative and no other organization had such an approach towards accommodation in the tourism industry like Airbnb. The company quickly gained popularity and expanded in the global market (Suroso and Azis 2015).

Every business organisation is different from one another therefore it is the drivers of innovations changes with the dynamics that make up the company. First of all the objective of the business helps a company to innovate, even a non-profit seeking organisation can innovate in order to reach out to their objectives in a more efficient way. According to Tidd et al. (2013), a business organisation needs innovation in order to be relevant in the industry. The dynamics in the industry of operation keeps changing and therefore it is important to keep changing making innovation an important aspect of management (Suroso and Azis 2015). Gaining competitive advantage, meeting the requirement of the customer, to take advantage of the opportunities in the internal and external environment etc are the reasons for an organisation to innovate. Leadership in an origination is also one of the main factors that drive innovation if a leader is visionary and transformational in nature and style then they tend to encourage and motivate innovation in the company (Souto 2015).

According to Suroso and Azis (2015), there are three innovation typologies approach dominant: incremental versus radical innovation; technological versus marketing innovation; and product versus process innovation. On the other hand, these aspects have been further subdivided in several categories depending on the nature and the outcome of the innovation. A company can choose to innovate based on the resources and the trends in the business.

The concept of disruptive innovation as described by Christensen et al. (2015) is the process of innovation which has the potential of substituting old commodities and service provisions. This process helps an organisation to gain competitive advantage in the industry and become the market leader in the long run. As innovation helps in the process of growth and popularity it ultimately improves the user-friendliness and affordability of the products and services in the market. The innovations of UBER, Ebay, Airbnb etc can be categorized in this segment. According to Christensen et al. (2015), disruptive innovation is like a revolution in the industry it brings out possibilities and new opportunities which helps the industry to grow. In the industry like cycle if the position is in the maturity section and is towards decline, then with an idea of disruptive innovation the opportunities of the industry increase making it more attractive for investors as well. Disruption is often associated with technology and the process improves the productivity and efficiency in the process of implementation. On the other hand, disruption is deemed to be threat rather than an opportunity by many companies as there are a number of significant risks associated with the process of innovation.

Types of Innovation

Some of the opportunities of disruptive innovation are:

• It is associated with a change that is unlike any other in the industry, thus it helps the company build an image of change which adds to the value proposition of the company (Christensen et al. 2015).
• The process helps an organisation to explore the opportunities that are available.
• Competitive advantage by product development, diversification as well as market development is possible at the same time with a disruptive innovation concept.
• With an idea that is revolutionizing, a company will find it easy to find investors who can fund the venture.

Following are some of the barriers in the process of disruptive innovation:

• Challenging your orthodoxies is the biggest challenge in the industry, as the concept is entirely new; it usually breaks several rules in the process. Orthodox mindset in business can be a major barrier as it hinders in the process of change and challenges the prospect in every step.
• Many times the change brought about by the disruptive innovation can be misunderstood by the consumers, as the concept is so new that consumers are not even aware of the utility therefore making the process of acceptance a long-run factor.
• Timeliness, the innovation has to be accepted by the target market in the relevant time, therefore if the company is unable to establish the attractiveness and interest among the customers then they can loose on the impact of the idea (Roco and Bainbridge 2013). 

UBER: The company is responsible for transforming the taxi service industry. The founders of the company recognized the issue that people were facing while hiring a taxi. Along with this they had realized the potential that the Smartphone business had bought with it. Therefore the founders combined the two opportunities on the external business environment to come up with a mobile phone application that would allow the passengers to book a cab easily without the issue of refusal. The prerequisites of the process were to have working internet connectivity along with a smartphone. The company runs on a hybrid cloud model: Schemaless (built in-house on top of MySQL), Riak, and Cassandra. Uner used Docker containers on Mesos to operate the microservices furthermore Aurora for long-running services and cron jobs. The company used marketing as an essential tool to make the customers understand the relevance of the service and how it would add value to the heir services. The company worked on the issues that were faced by the customers of the taxi industry and provided them with exactly what they were looking for in the most compact and effective solution as possible. Therefore the company used the consumer centric approach in order to initiate a disruptive innovation (Eng.uber.com 2018).

Airbnb: The disruptive nature of the service arises from the fact that it has made the process of accommodation in tourism beyond hotels and resorts. With the help of vivid content both text and pictorial the company developed the process of reliability. The concept of renting a place to complete strangers may also be daunting for the host hence the people also have access to information which can help communication in between the guest and host easy. The company has made a place in the market that cannot be replicated by the competitors because of the IT infrastructure (MacMillan and Karmin 2014). The could services are provided by Amazon Web Service and the following image will explain the other components.

The reliability, user-friendly, and convenience are the factors that make the platform one of a kind along with the idea (MacMillan and Karmin 2014).

EBay:  EBay was one of the first organisations to operate and popularize the concept of e-commerce.  The company has set a number of benchmarks in the industry and has popularized the usage of internet platform to buy and sell items, the company also has its own secure payment option called PayPal the company has a website and an application. The founders of the company had recognized the potential of the industry and how is it going to change the retail business well ahead and thus has developed in a way that is user-friendly, secure and is in sync with the changes in the business (Amit and Zott 2012).

Conclusion

It can be concluded form the above discussion that all the three organizations that has been mention have recognized the potential in the industry, the companies built on an idea that was new and had taken a risk in order to initiate the process of operation. Innovation does not only mean change in the product or service it also refers to the innovation in the operation process. Disruptive innovation is both deemed to be an opportunity as well as threat. Yet innovation is essential as it helps an organisation develop and improve in the process of its growth.

Reference list:

Amit, R. and Zott, C., 2012. Creating value through business model innovation. MIT Sloan Management Review, 53(3), p.41.

Christensen, C.M., Raynor, M.E. and McDonald, R., 2015. What is disruptive innovation. Harvard Business Review, 93(12), pp.44-53.

Eng.uber.com.,2018. The Uber Engineering Tech Stack, Part I: The Foundation. [online] tesla.com. Available at: https://eng.uber.com/tech-stack-part-one/ [Accessed 27 April. 2018].

Gokhberg, L. and Meissner, D., 2013. Innovation: superpowered invention. Nature, 501(7467), p.313.

MacMillan, D. and Karmin, C. 2014, Startups Uber and Airbnb Court Business Travelers; New Versions of Apps Are Geared Toward Booking Business Trips, New York, N.Y.

Roco, M.C. and Bainbridge, W.S., 2013. The new world of discovery, invention, and innovation: convergence of knowledge, technology, and society. Journal of nanoparticle research, 15(9), p.1946.

Souto, J.E., 2015. Business model innovation and business concept innovation as the context of incremental innovation and radical innovation. Tourism Management, 51, pp.142-155.

Suroso, E. and Azis, Y., 2015. Defining Mainstreams Of Innovation: A Literature Review. In Buchory, HA, Cahyandito, MF (Eds.), Proceedings of the International Conference on Economics and Banking 2015 (pp. 387-398). 

Tidd, J., Bessant, J. and Pavitt, K., 2013. Managing innovation. Hoboken.