The Significance of Innovation for Business

Essay , 2011 , 10 Pages , Grade: High Distinction

Business economics - Business Management, Corporate Governance

The ability to create innovative products represents a strong growth engine for almost all companies in different industries. A high level of innovation is one of the core attributes of any successful and continuously growing company. Any company has to rapidly develop new services, products and processes in order to compete with the advancing business market. This essay aims to explain the crucial significance of innovation for business by defining the term innovation and assessing its importance by giving an example from the company Apple Inc.. Moreover it outlines the differences between innovation and change as well as invention. The lighting of the topic from a shareholder perspective follows at the end.

Table of Contents

1. Introduction
1.1. Purpose
1.2. Limitations and method
1.3. Scope

2. Declaration of innovation
2.1. Definition of innovation
2.2. Types of innovation
2.2.1. Product innovation
2.2.2. Process innovation
2.2.3. Market innovation

3. A successful innovator
3.1. Apple Inc. as an exemplary model
3.2. The correlation between Apple’s innovative product range and success

4. Innovation and change
4.1. The differences between innovation and change
4.2. The similarities between innovation and change

5. Conclusion

6. List of reference

1. Introduction

1.1 Purpose

Innovation represents a strong growth engine for almost all companies in different branches. In particular global, but also domestically operating companies, have to perceive the development of new services, products and processes as a prerequisite for a successful going concern, because it is the main reason why companies can still compete in the future market. The purpose of this essay is to explain the significance of innovation for business, because more and more companies cannot withstand the pressure through innovation within branches.

1.2. Limitations and method

The type of analysis used was the selection and evaluation of three chosen journal articles from Emerald, the textbook and other academic sources for theory based content.

1.3. Scope

The Scope of the essay will look at the significance of innovation by giving a definition of innovation and an example from the company Apple Inc., subsequently outlines the differences between innovation and change and finally concludes with the key decisions.

2. Declaration of innovation

2.1. Definition of innovation

Since the history of mankind innovations play a significant role and sometimes also social conditions encouraged the emergence of innovations, especially in crises. Innovations can be searched systematically or may occur randomly. Systematically created innovations are combined with a deliberate research and development. Innovations by random are certainly equally important, one of the most popular example are the penicillin, which is one of the oldest antibiotic and helped to save countless live.

Nevertheless, “Industrial innovation includes the technical, design, manufacturing, management and commercial activities involved in the marketing of a new (or improved) product or the first commercial use of a new (or improved)process or equipment” ( Chris Freeman, 1982, The Economics of Industrial Innovation, 2nd edition, Printer, London).

Thus innovations can be defined as the first commercial exploitation of an invention by producing and marketing a new product or a new process in production.

At this point Figure 1 helps to understand the context between invention and innovation,

The capacity for innovation is also important to create a value. Modes of thinking and behaviour patterns are more open. Innovations stimulate the imagination of the shareholders, because they promise positive prospective earnings.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1, Invention and innovation

Social innovations can be defined as non- technological innovations and are concerned with human behaviour, for example, new approaches to working time regulations, or new approaches to increase job satisfaction.

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• College: Victoria University of Technology, Melbourne (Faculty of Business and Law)
• Course: Management and Organisational Behaviour
• Grade: High Distinction
• Author: Mehmet Sarialtin (Author)
• Publication Year: 2011
• Pages: 10
• Catalog Number: V206823
• ISBN (eBook): 9783656355182
• ISBN (Book): 9783656355281
• Language: English
• Tags: significance, innovation, business