3.9.2 Assessing innovation

• Innovation = putting a new idea into action 'the commercially successful exploitation of ideas'
• Invention = formulation of new ideas for products and processes whereas innovation is the practical application of new products
• Advantages of innovation?

  • First mover advantage
  • higher prices and profitability
  • added value
• Process Innovation = finding better or more efficient ways of producing existing products, or delivering existing services
• Disadvantages of innovation?

  • high levels of competition
  • uncertain commercial returns
  • small availability of finance
• Efficiency = includes how well a business is using its resources to produce
• Kaizen = continuous improvement involving constantly introducing small incremental changes to improve quality
• Benchmarking = to understand and evaluate the current position of a firm in relation to best practice and to identify areas of improvement
• Forms of benchmarking?

  -Strategic

  -Performance

  -Internal

  -External

  -International
• Entrepreneurship = activities done by an entrepreneur along with risks and rewards
• Intrapreneurship = entrepreneurial activity done by managers and employees along with risks - rewards are invested back into the business
• Intellectual Property = aimed at protecting the property of an individual or business
• Automatic protection?

  • Copyright writing and literary works
  • Design rights
• Protection to be applied for?

  • Trade marks - minimum 4 months (product names and logos)
  • Registered designs - minimum 1 month (appearance of a product)
  • Patents - minimum few years (inventions)
• Non-Disclosure Agreements = a legally binding document that can be used to stop those consulted from stealing an idea.
• Patents = these protect inventions and gives the inventor the rights to take legal action against anyone who makes, uses, sells or imports it without their permission. (very expensive $4,000 and take a long time, must be renewed yearly.)
• Copyrights = exclusive legal rights that protects the publication, production, or sale of the rights to a literacy.
• Trademarks = refers to distinctive desings that uniquely identifies a firm or its goods.
• The Bartlett and Ghosal Model of International Strategy = indicates the strategic options for businesses wanting to manage their international operations based on two pressures: local responsiveness and global intergration.
• Force for local responsiveness?

  • Do customers in each country expect the product to be adapted to local requirements
  • Do local competitors have an advantage based on their ability to be more responsive
• Force for global integration?

  • How important is standardisation of the product in order to operate efficiently
  • Is consistent global branding required in order to achieve international success

  e.g. Mercedes need to produce identical products
• Bartlett and Ghoshals Model


  a

  
• Global Strategy?

  • Highly centralised
  • Focus of efficiency
  • Standardised product

  e.g. Amazon
• Transnational Strategy?

  • Complex to achieve
  • Aim is to maximise local responsiveness but also gain benefits from global integration
  • Wide sharing of expertise

  e.g. Starbucks
• International Strategy?

  • Aims to achieve efficiency by focusing on domestic activities
  • International operations are managed centrally
  • Relatively little adaptation of product to local needs

  e.g. McDonalds
• Multi-Domestic Strategy?

  • Aims to maximise benefits of meeting local market needs through extensive customisation
  • Decision making decentralised
  • Local businesses treated as seperate
  • Strategies for each country

  e.g. Walmart (who also own Asda)