Small business organisations who act upon the opportunities and possibilities for change through innovation in the present volatile. Innovation helps businesses to compete as well as flourish in emerging markets, it also fluctuates firm and economic conditions. In the present scenario, small businesses tend to use innovation as a human-centered, strategic and technological tool so as to develop an agile innovation culture. It is assistive in attaining high market growth and improving the bottom-line results of the company. The present assignment is based upon A1 communication; it is a communication provider firm by having independent communication specialists (Aghion, Van Reenen and Zingales, 2013). The firm provides data options to individuals or groups by ensuring flexibility and cost-effectiveness. Apart from this, the present assignment will be described the significance of innovation for business units. There will be a discussion vision, leadership and culture of the firm which gives shapes to innovation. Readers will also come to know the 4Ps of innovation and the use of the innovation funnel. Furthermore, the process of new product development will also be defined.
P1 Importance of Innovation and its comparison with invention
In this competitive business environment, number of factors which can affect business activities or tasks in direct and indirect manner. Thus, it is essential for associations to work accordingly as per the market situation. In this context, A1 communication is focused on implementing new and innovative processes which lead to increase efficiency and productivity of the firm and enables it to accomplish organisational goals and objectives. As every SME works for fulfilling demand of its customers in the best possible manner for this it needs to implement innovative procedures in working environment (Amit and Zott, 2012). The term innovation refers with determining a new idea or method; its an application which provides better solutions so as to meet market requirements and unarticulated needs.
Importance of innovation for A1 Communication
Every business leader thinks that innovation is crucial for them in terms of improving working capabilities and efficiency. Basically, innovation means turning an idea into a solution which adds value for customers' and provide them high level of satisfaction. In context of small businesses, innovation helps them in respect of enabling brands to compete in incremental new markets or category segments. It captures individuals imaginations in order to increase their faith and loyalty for long term period. For example – if a firm offers best products and services frequently by adding innovative characteristic into it; this lead customers' touchpoints or brand loyalty.
Difference between innovation and invention: -
It is the process which determines new and unique concepts which relies upon modern technology and prevailing existing market conditions (Ariga and et. al., 2013).
Invention is the process which is related with inventing new or fresh products and modify the existing one so as to deliver something different to society.
Innovation entails with a new idea which sticks a scientist. It is concerned with a new product or process.
It is a need which felt for a specific product or making changes in current products. Invention links with generating several products and services.
P2 Organisational vision, leadership, culture and teamwork can shape innovation and commercialisation
While making innovation several kind of prospectus are getting involved which improves its efficiency and effectiveness. It is necessary for business organisations to coordinate all those factors so as to attain desired outcomes in a certain time period. Management of A! Communication should make aware employees with organisational cultural, vision and leadership as they can work accordingly. Following is defined how these elements can give shape innovation, such as -
- Organisational cultural – A cultural for an organisation involves different policies, strategies, communication process, laws and legislations under which all employees are being worked. For example – in A1 communication it is must for all staff members to wear uniform while working in order to maintain equality and discipline at workplace (Boons and Lüdeke-Freund, 2013). Henceforth, organisational cultural of the company should be free from all bias and spread positivity in employees' mind; it led they will work more effectively.
- Leadership – In small businesses, leaders play a vital role in providing assistance or directions to employees as they work appropriately and efficiently. A strong leadership manage all employees in the best possible manner; leaders organises training and development assistance for entire workforce with an aim to boost up skills and knowledge level of staff members. It also enables in raising performance or output level of staff members. Beside this, another duty of leaders is to influence employees and motivate them for accomplish organisational goals and objectives.
- Vision – Vision and mission of the company should be also consider in innovation process because without having a appropriate objective or aim people cannot recognise what they need to do. For example – the vision statement of A1 communication is to become one of the best communication service providers in UK. For this, company is trying to identifying new and innovative offerings which delivers an unique communication experience to customers (Drucker, 2014).
- Teamwork – it plays a critical role in coordinating all staff members as they can work in a group for attaining specific goal and objective of the company. It is the responsibility of team leader to align tasks or duties to employees as per the skills and capabilities as they can work more persuasively; thus process of goal accomplishment will be more facilitate.
P3. 4P's of innovation and use of innovation funnel to examine and shape innovative ideas
Innovation funnel - Innovation is significant process which is acquired by most of the firms in order to face market competition and remain superior with their rivals. The strategy named innovation funnel is acquired by the firm for developing new products. Its main purpose is generate those goods which can meet market needs in a cost effective manner. In addition to this, innovation funnel is a graphical representation which involves other options of improvements. Innovation funnel is a base of various ideas which are screened and evaluate whether or not they will provide future opportunities to a firm (Gordon, 2012).
There are four Ps of innovation which briefly described as under: -
- Product – It consists with specific good and service which are offered by a firm to its target and potential customers. The main product of A1 communication is networking services. Thus to improvise the credibility of their products firms are required to conduct a proper market research which supports them to know market nature and buying behaviour of customers. A product should be innovative or unique in nature and able to satisfy all desires of people at marketplace.
- Process - The process of converting raw materials into finished goods should be flexible in nature and not much time consuming. It is essential for firms to acquire ethical or legal way to generate something innovative as it will build high market goodwill in market and assists in gaining high cutting edge.
- Positioning – Innovative products are liable for providing long term market growth and success to the company. In other words, it is able to maintain good market position among customers' mind and attain and retain them for long term period (Huizingh, 2011).
- People – It is required to manage new inventions and for the same management should hire talent personal who have enough capabilities and skills. A1 communication is focused on hiring well qualified and skilled workforce who can easily determine solutions of all work based problems and issues.
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P4 Explain frugal innovation and its importance
Frugal innovation is a process through which firm are able to reduce their manufacturing cost as well as wastes. Management of the company has implemented this strategies at their work place through which they are capable to achieve economic of scale appropriately resulted enhance customer's satisfaction and market share (Stokes, 2011). Frugal innovation help to remove unwanted features in their goods, services so that overall cost has been automagically decrease. It is a operations manager responsibility to develop strategies and plan for increase employees abilities, skills, knowledge so that workers are understand theory of frugal creativity at work place. It set operation manager focus on reducing completely of task to execute innovation action of plan with in firm. A1 communication develop effect pricing policies to achieve higher market share as compare to their rivalries. Through this, they are implemented strategies in order to get economic of scale. Development of frugal innovation needed to follows some step which are explain below:
- Identify improvement area: It is a management responsibility gap between actual as well as desire performance and find out issues due to gap has arise. Management of A1 communication has also focus on that are and analysis these area of improvement and take appropriate action to solve it effectively.
- Make alternative solution: After identification of problem, manager has list out all issues and its alternative solution in order to implemented frugal innovation appropriately. Administration of A1 communication has make alternative answer of each one cognitive content but they are focus on core key resources which are affected due to this thus help to run entire business activities appropriately.
- Choose most appropriate solution: List of alternative solution has create dilemma of selection of solution in which individuals can not select one method. For this, manager has analysis firm capabilities, available resources, employees skills, market competition and many more after this all they are select most appropriate one method of solving issue accordingly (Schaffers and et. al., 2011).
- Sustainable solution: Identify whether chosen method of solving issues has effective or not, if it not then they has re-enter into second step and gain select appropriate solution of given problem. For this, they implemented answer in very little area for practical purpose and see feedback, if it is positive then solution has executed in entire organisation if not re-find statement.
- Shape clients behaviours: Firm want to shape their buyer behaviours by offer them higher quality product and services. For this, A1 communication want to implemented frugal innovation in their working place through this they achieve economic of scale and provide product at lower cost without compromising with its quality.
- Engage and iterate: With time, technology has change very fast so that company wants to add some feature and delete it also according to market demand as well as buyers needs. Some consumers can not additional characteristic in goods and services because due to this price of product is automagically rise (Rosenbusch, Brinckmann and Bausch, 2011). So that, after implementation of frugal innovation at work place, A1 communication has offer their services at lower cost with same quality resulted achieve goals and objectives in limited time period.
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P5 Commercial funnel and the process of new product development
Commercial funnel is a fundamental procedure which underlies research activities in organisational system as it is one of important aspect of innovation. Although, if a product is going to be launched in market requires commercialisation so that people can know their benefits and uses. Therefore, commercial funnel focuses on the process of new product development should be cost and time effective and able to expand market share of the company.
Apart from this, new process development captures all aspects which are getting included in generating new products and services (Jiménez-Jiménez and Sanz-Valle, 2011). Below is defined several stages of new product development, such as -
Idea generation – Its a staring phase of generating new product. Identify new and innovative ideas helps a firm to make unique or attractive products; its also represents company's viability at marketplace. In addition to this, ideas are come from various sources or directions. Management of A1 communication is focused on determining new ideas by conducting a market research and assessing offerings of competitors as well.
- Idea screening – Managers have several ideas in which some of them are beneficial and some are not. Thus, ideas are screened whether they or not they are able to meet market trends and customers' desired. Only adequate ideas are accepted by the firm (Lichtenthaler, 2011).
- Concept development and testing – In encompasses with whether products are useful for target audiences or not. In this manner, a few range of people are chosen and provide them entire inform regrading new offerings so as to recognise their viewpoints for the same. So that, the main reason behind concept testing is to get the response of potential users of the services after using them.
- Business analysis- It involves to determine that new products will provide financial growth to company or not. Business analysis can be done by elaborate the overall marketing strategy by enlightening current position of the company at marketplace. In addition, it also involves evaluating market demand of specific goods by assessing break even point.
- Product development and test marketing – Afterwards management make plans or actions regrading producing products and how much costly it will be. Whereas test marketing entails to serve products into a small group which diminishes the risk of selling at large (Manso, 2011).
- Commercialisation and launching – At last, the marketers prepare diverse strategies and policies of marketing of a new product. Prices of product is also decided in commercialisation process. Thus, product is ready for introducing in market and deliver new heights of success to the organisation.
P6 Innovation business case and ways of funding
Innovation business case provides a new approach which relies upon how to handle and control problems which are being occurred in innovation process. It is emphasised on developing an effective innovation which supports to compete external rivals of the firm. Innovation business case encompasses vision and mission and allocation of resources in proper manner so as to create a specific product. It requires to make transparent decisions in order to conduct cost benefit analysis. Furthermore, innovation business case is well designed framework that is based upon assessing stakeholders' interest and determine future opportunities as well as uncertainties.
Ways of funding -
- Crowdfunding – It is knows as best source of micro financing and carrying out various individuals together who invests money to projects. Crowdfunding supports entrepreneurs as they can pledge funds in order to create sometime unique or a particular art project. In other words, its a practice of funding a project through collecting money from wide range of people, typically via the Internet (Patton, 2011).
- Bank loans – It is one of the best source of raising capital through bank. There are several banks like – private and public provides funds to small business by charging some amount of interest. But for this, bank required a strong business plans and assess past history or achievements of the company to recognise its credibility of paying returns.
- Venture capitalists:Venture capitalists is a another sources of fund thus help to entrepreneurs run their entire business activities appropriately. In United Kingdom, individual person have these kinds of financial institution and get money on the behalf of profits share, partnership, get shares and many more. Thus help venture investor to know information about financial position of the company accordingly they have focus on investment process.
- Angel brokers: Individual person has identify angle investor, angle capitalists have money but can not have idea, business or enterprise to spend their fund into it. So that, they are identifying person those have innovative idea, thought and business to invest their finance into it (Patton, 2011) Through this, entrepreneurs has get money from angel broker with less documentation process.
P7 Tools to develop, retain and protect knowledge and intellectual property
In United kingdom several different kind of tools are available which are help organisation to protect their innovative goods and services from others those make copy and sell it at market place to get profits. Creativity is process of developing commodities with their new thought, opinion etc. It is a management responsibility to implemented action of plan at work place in order to increase awareness about innovation among employees. So that, each one worker has completing their task creatively and achieve common goals and objectives appropriately. Modification in existing goods help A1 communication to get higher customer's satisfaction and their retention for long period of time appropriately (Manso, 2011). Manager of R & D department has use several different tools in order to retain as well as protect intellectual property rights through which enterprises are able to save their resources and men -power effort to develop new item for full fill clients needs and wants. Some of the most usable techniques to save intellectual property which are affected enterprises are detail as follows:
Copyrights- Copyrights is a widely used technique of saving intellectual property right of the company. Organisation are able to sell their services to their clients and no one competitors has compete them effectively. Through this, firm defend only tangible product like painting, photographs, nobles, books, biopic and many more.
Patents- Patents has save money, time, efforts and many more to invent new commodities and services appropriately. After some time government has provide permission to competitors to copy original product because patents are done for limited time period.
Trademark- Trademark is a identity of the company in front of clients so that it is a management responsibility to make attractive logo, brand image, firm name, tag line, or any photo which are of enterprise, phrases etc.
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From the above mentioned report, it get comprehend that innovation has become one of the vital part for small and large businesses in respect of providing them high cutting edge. It helps firms to generate something new and different that is able to meet needs and wants of customers in the best possible manner. While innovating, managers are required to consider certain aspects, such as – leadership, teamwork, vision and organisation so as to arrive desired goals and objectives in a certain time period. Along with this, the report has stated 4 Ps of innovation, i.e. product, process, positioning and paradigm. Building an innovation business case helps A1 communication to generate funds from different sources.
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Books and Journal
Aghion, P., Van Reenen, J. and Zingales, L., 2013. Innovation and institutional ownership. The American Economic Review. 103(1). pp.277-304.
Amit, R. and Zott, C., 2012. Creating value through business model innovation. MIT Sloan Management Review. 53(3). p.41.
Ariga, K., and et. al., 2013. Layer-by-layer nanoarchitectonics: invention, innovation, and evolution. Chemistry Letters. 43(1). pp.36-68.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Gordon, R. J., 2012. Is US economic growth over? Faltering innovation confronts the six headwinds. (No. w18315). National Bureau of Economic Research.
Huizingh, E. K., 2011. Open innovation: State of the art and future perspectives. Technovation. 31(1). pp.2-9.
Jiménez-Jiménez, D. and Sanz-Valle, R., 2011. Innovation, organizational learning, and performance. Journal of business research. 64(4). pp.408-417.
Lichtenthaler, U., 2011. Open innovation: Past research, current debates, and future directions. The Academy of Management Perspectives. 25(1). pp.75-93.
Manso, G., 2011. Motivating innovation. The Journal of Finance. 66(5). pp.1823-1860.
Patton, M. Q., 2011. Developmental evaluation: Applying complexity concepts to enhance innovation and use. Guilford Press.
Rosenbusch, N., Brinckmann, J. and Bausch, A., 2011. Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs. Journal of business Venturing. 26(4). pp.441-457.
Schaffers, H., and et. al., 2011. Smart cities and the future internet: Towards cooperation frameworks for open innovation. The future internet. pp.431-446.
Spithoven, A., Clarysse, B. and Knockaert, M., 2011. Building absorptive capacity to organise inbound open innovation in traditional industries. Technovation. 31(1). pp.10-21.
Stokes, D. E., 2011. Pasteur's quadrant: Basic science and technological innovation. Brookings Institution Press.
Strayer, J. F., 2012. How learning in an inverted classroom influences cooperation, innovation and task orientation. Learning Environments Research. 15(2). pp.171-193.