Innovation Strategy Essay

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Innovation Strategy

Summary of strategy and value-chain analysis Executive Summary This course work analyses the concept of innovation, evaluates the importance of innovation in strategy and also study techniques of promoting it in organizations. Mrs… CEO has requested a fully evaluation of the organization to establish a new strategy that Implements Innovative methods that will transcend the organization In the future. The goal Is to generate a sustainable competitive advantage over the organization’s competitors and to prevent strategic drift.

Introduction As time goes on, nothing stays the same in the organization. Everything is influenced by the time and all things are in continuous variation. In the market industry the progression is dramatically fast, the product and services we offer today, most likely be substituted by another tomorrow. Therefore It Is essential for the organization to adopt the right strategy In order to deal with these continuous changes and survive and establish a new market share. In accordance with Peter Trucker (1985) the truest way for business to be successful is to innovate.

In order to understand the acquirement of the business is essential to gaining innovation. According to Alan Latherer and Robert D. Been (1997), Innovation is the successful realization of new ideas and also aspiration to change the way a company operates and delivers service to the society. This statement contains Ideas that are new to the public, new to an industry, or simply new to a specific company. The social and economic circumstances are the primary factors of the determined role of innovation in strategy.

Peter Trucker (1992) explained it as “the knowledge economy” which emerged since of the end of the Second World War, due to increase of the service sector and decline of producers, business corporations have had to respond to change If they wish to do well In the business industry. In concordance with Peter Trucker business has only two mall actions such as marketing and Innovation (Kettle & Armstrong, 2008). To be clearer, Initially the organization must work harder to establish new clients, but in order to keep customer loyalty and profit, the organization provide the right products and services with the terms of innovation.

The role of innovation in strategy The step to establishing creativity and innovation is to evaluate the strategy. Strategy is varied from targets, purposes, vision, precedence and plans. It Is a substantial Issue for a business because an efficient strategy can Improve on performance of the organization. An innovation strategy guides will provide the organization with appropriate objectives and solutions that should be used in order to build the organization’s objectives for innovation and thus produce valuable goods and create competitive advantage.

The function of the innovation strategy is to level conception that can aid the organization in the implementation of the overall strategy and also In talking goals for the future. Furthermore, establishing a focus on Innovation will taking place when an organization, even one that has obtained leading position, reacts slowly to changes in the external environment and remains with current strategy, although that the company increasingly diverges with external trends. Innovation in organization The changes which are required in a firm in order to minimize its productivity gap are essential for practical importance.

As innovation happens, new ideas and new approaches are needed to implement in the organization. Innovation is the process which cannot be promoted, because promotion is defined as selling the idea that innovation is valuable and standing while better part of personnel not be willing to engage in new processes that will support growth in many sectors of the organization. To deal with this issue, an organization is needed to create an environment conductive to innovation. Eliminate barriers and obstructions, that limiting employees innovate.

Innovation is a long process and result is Just the end of the process which can be achieved by supportive environment. It requires putting effort, resource, time and money into real practice. Innovation is about collaboration of staff to achieve great ideas and enhance a performance of the firm. Value of innovation Making innovation a focused value is essential to the organizations continued growth. The authors W. Chain Kim and Renee Embargoing believe that value innovation plays a crucial role in the performance of any organization.

As this organization continues to evolve the ability to adapt to what the consumer needs will establish a new type of innovation whether it is core, adjacent, or transformational. By using the value chain analysis method it allows for separation from competitors by obtaining internal and external leaders that possess the skills to create a strategy that fulfills the organizational need. The most common issue that many organizations face is that they are matching strengths and weaknesses to competitors and to build strategy to compete on strengths.

However in order to attain leadership, companies should ignore the competing and comparison on strengths and create great increase in value. Value Chain Analysis The ability to define what value chain will work best for the organization will help to identify strategic needs and hence forth establish opportunities for innovation. The woo ways that value chains are used can be internal- within an organization and external-vendors and customers that require products or services form the organization.

Here is a five-step method for discovering a customer’s particular strategic needs based on a unique application of value-chain analysis. Performing this analysis on important customers helps identify high-value new business opportunities. It also can strengthen relationships with customers by clarifying their strategic priorities, regardless of whether their needs are based on a differentiation or low-cost strategy or whether that strategy is implicit or explicit. Value-chain analysis is used for many purposes, but the process of examining customers’ value chains is relatively new, (Grain 2008).

In an upcoming session we will delve more into the steps of creating value chains, but the five (5) basics steps below outline the process (quoted in part, Grain 2008): Step 1: An overview of value-chain analysis Value chains may be defined in two ways: (1) within a company they describe the servicing the final product (Porter’s 1985) concept and they also delineate the value- added stages from raw material to end-user as a product is manufactured and distributed, with each stage representing an industry.

The internal value chain is a key concept in the field of strategic management that has been thoroughly explored. In contrast, the external value chain has not been studied as extensively. The external value chain consists of the important upstream/supply and downstream/ distribution processes. However, even though these processes occur outside the corporation, the strategic opportunities they reveal and areas of risk they highlight warrant careful study.

Step 2: How to construct a customer’s value chain First, recognize that the organization need to construct both internal and external alee chains for a particular customer. The internal value chain follows Porter’s original concept, which includes value-added steps from purchasing to distribution as well as support functions such as R and human resources. It’s tempting to let this generic diagram serve as the customer’s value chain, but it must be tailored to the particular customer.

To produce a useful value-chain analysis, members of your engineering or sales team should ask the customer how its business processes add value and whether any have unique best-practice features. To perform the external alee-chain analysis, team members should ask the customer a set of getting-to- know-you questions. What does your supply chain (the upstream value chain) look like? What role does your company play in it? How do your products reach their customers (the downstream value chain)?

Your final diagram models only this single customer’s value chain and it represents virtually everything the customer does to add significant value. If your relationship with the customer permits a candid exchange of information, have the customer validate the value chain you have created. Step 3: Inferring the customer’s business strategy Even long-time suppliers have trouble distinguishing critical customer activities from sometimes urgent but ultimately nonstarter’s ones. Understanding your customer’s business strategy is therefore crucial.

Value-chain analysis helps a supplier distinguish between the activities of the customer’s firm that directly support its competitive strategies – for its products and for enhancing key capabilities – and ordinary operations. Step 4: Discovering the customer’s strategic needs Strategic activities are the activities a firm must implement in order to realize its strategy or strategies. Every strategy has such a set of activities. In so far as a company finds doing any of these activities difficult, potential suppliers have been trained to see these as “needs. But, suppliers need to differentiate between operations that are difficult and ones that are strategic. Step 5: Making value-chain analysis a strategic capability of the marketing department Conclusion Majority of businesses consider innovation as one of the highest priorities to separating strengthens and weaknesses in the market place. In today’s market the significance of innovation is continuously growing due the changing demands of the consumer. Establishing innovation in the organization establishes a desire to strive for new and creativity ways to excel in the market.

Innovation is an essential component of an efficient strategy; it aids to reveal current opportunities in the market and the ones that are possibly to emerge in the future. Prosperous business future trends. It enables them to shift the future demand speedily and efficiently creating a sustainable competitive advantage for a business. Constantly innovating and enhancing business performance is also likely to attract high level of staff members and retain present longer which is important to the long term health and f business.

As a result if all this aspect done efficiently, innovation can obtain a competitive advantage which adds value for the company. In the present time, business organizations are looking for innovators help as never before. Globalization, technological advancements, movement, science improvements and climate changes influence organizational and business environment. The main role of innovation is to add value and extend business area. Innovation is important in order to improve the quality of life globally. By enhancing the quality of life, innovation will build a potential place for new generations to enter.