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OUTCOME 1

INNOVATION AND ITS KEY ELEMENTS:

Innovation in a simple way is a process or a method that helps to meet the modern
era requirements, and the need of the market. This can be fulfilled through efficient
services, effective products, upgraded technology. Innovation on the other hand can
be said a method that brings ideas which have a direct impact on the market
conditions. innovation is very important as in this fast growing world the needs are
getting more and more so the ideas have to be transferred into the goods and
services so that they meet the particular present market conditions.(business dic.)

Innovation are grouped into categories:

 Evolutionary inventions these are long run innovations that are brought
through many processes and technological advancement.
 Revolutionary innovations are those which are new and are also termed as
discontinuous innovations.

Innovation is the backbone of this age without new ideas there would be no
advancement in the marketing field, and specific needs would not get fulfilled.

Innovation includes four main elements that are strategy, structure, skills and
process. strategy is very important for the company or organisation as the main goal
has to be setup and various policies to be made for achiving the goal. Innovation
strategy helps to follow the right ideas so that organisation move in a smooth way
and aimed goal can be captured.

On the other hand, structure is an another element of innovation because the ideas
in the company can come from anywhere, whether that’s the person talking to
another person or the manufacturing room. Motivational contact between the
employees and making less the formal controls if we want to make innovation efforts
in the company.

Skills are another important element of innovation that helps the ideas to come out .
taking a small idea and able to see its various side that include opportunities and
threats of it is a skill that has to be polished and taken into consideration.

Whereas, process is the last element of innovation because after getting an idea the
plan or idea has to be implemented, so process helps to take take idea a step ahead
and give it push. The basic components of process are ideation, development, and
implementation. So we need to focus these areas so that the idea can run without
any risk.

INNOVATION: INVENTION-COMMERCIALISATION-
DIFFUSION

INVENTION-

 When a product is used by consumers or customers only than market can

consider the invention.
 Invention is more likely innovation that includes ideas, new discoveries, new
breakthroughs

COMMERCIALISATION –

 Mainly include development part of research, development (r&d) and help to

take care that the invention is safe and will work accordingly.
 Commercialisation innovation helps to find a better way to to know the actual
value or real value of the technology

DIFFUSION-

 It is related with innovation and explain the rate at which customers gain the
innovation.
 Diffusion can be slow or fast accordingly.
PART BUSINESS MODLE PLAY IN INNOVATION

Business model is a well working plan imposed by the organisation for successful
business or organisation operations. It helps to know about the business financial
base and produce the revenue and make earnings from the business operations.

 It should compare the merits and demerits within the organisation.

 It should know know about the entire function of the organisation

FUNCTIONS OF BUSINESS MODEL

The above chart describes the function of business model which are divided into
three parts that are internal functions, external functions, support functions. These
function play’s a vital role in business operation without it the business cannot step
ahead.

Business model mainly include two elements –value proposition and the operating
model. It include three main ways that are as follows:

 Revenue model:- how are we paying for our offerings.?

 Target segment:- which consumers had to be to be taken into cosederation
and what needs has to be fulfilled.
 Product or service offering:- what are we providing the consumers to satisfy
their needs and wants.?
 Cost model:- how do we put assets together in a particular form and costs to
deliver profitably.?
 Organisation:- how do we make an effective action and develop our people
sustain and competitive advantage?

TARGET PRODUCT& REVENUE MODEL

SEGMENT(S)
SERVICE
OFFERING

BUSINESS MODEL
 VALUE CHAIN COST MODEL ORGANISATION

INNOVATION V/S INVENTION:

As already explained innovation in simple way is a process or method that helps to

meet the modern era requirement, and the need of market. Whereas invention is a
method of product development.

DIFFERENCE BETWEEN INNOVATION AND INVENTION:

BASIS OF DIFFERENCE INNOVATION INVENTION

1.) MEANING It is a method of Invention is a process that
upgrading a existing helps to meet the
product or service with particular need of the
making valuable efforts. market. Which can be
fulfilled by effective
product , effective
technology, etc.
2.) TYPES incremental innovation, Name, logos, trademark,
modular innovation, product invention,
radical innovation and fabrication invention,
architectural innovation appearance, authorship,
discoveries, etc.
3.) RELATION Innovation is similar to Invention is related to
modernization building something new.

4.) CONCERN Innovation includes many Whereas invention is

products, services and mainly concern with
processes. singular product or
method
5.) PRACTICAL Invention is practical in Innovation is a idea that
nature and can be felt. can be put into us of a
present situation and it
is not practical as
compared to invention.
6.) EXAMPLES Printing press, steam Motion pictures, mobile
powered vehicle, combine, etc.
television, telephone,
radio, wifi, video game,
google search and many
others.

INVENTION OF AN
ELECTRIC BULB.
 INNOVATION OF AN
TUBELIGHT.

INVENTION AND
INNOVATION

Innovation and invention are related to each other both play a vital role in modern
era. It is hard to find out which one is important but some aspects can be made . as
without invention there can be no innovation so first invention is must only than
changes or development can be made to the product. Invention means building
something new and innovation whereas is an improvement or development in an
existing product. In my point of view both are same because innovation is to
important which brings ease and make the product more effective and useful.
Inventions are for one time or product can be invented once but on the same
innovation are for long time as much as changes can be made by improve in
technology, new ideas, etc. In some ways innovation is more important than
invention because it improves the quality life and ease things .

EXAMPLE : (WHEELS)

( telephones and mobile phones)

There is a great change or development to communication sector as the father of
telephone ALEXANDER GRAHAM BELL has first invented the telephone in year
1876. And after that many innovations had taken place with the help of latest
technology a great changes can be seen in telephone history.
Innovation had helped to a great extent with a click of button certain works can be
completed in a few minutes. New generation mobiles include a great useful
technology which helps to make living easy.

INNOVATION INCOMPLETE WITHOUT COMMERCIALIZATION &

DIFFUSION

Innovation is incomplete without commercialization and diffusion because innovation

is a development in an existing product. On the same diffusion and
commercialisation is very essential for an innovation because diffusion explains the
rate at which new ideas and technology is being communicated through channels
and culture. Whereas commercialization helps to know the actual or the real value of
the product and service and gurantees that the product is safe.

Another important thing is without commercialization the product or services will not
be ready to make in production quantity which will rather result in delays and during
that period the useful resources will get wasted. The opportunity of product
achievement will become less, if no commercialization activities begun until all testing
is done. Then, the company has no another choice and has to choose an
unconditional alternatives. 1) try to go into production without commercialization or
(2) delay the product launch to do the commercialization, possibly when demand is
building. Without commercialization the product will not be according to standard or
quality.

Diffusion of innovation start with a five step process. This process is a way of
decision making. It takes place through a way of communication channels over a
specific period of time.

 Knowledge
 Persuasion
 Decision
 Implementation, and
 Confirmation

The most essential thing here is the capacity to get the ideas to the places it can
affect lives which is possible through technical education.

example: if ipad and i phone had not sold well, no one will see apple as an
innovative engines despite producing those products. But with the success in
the market, apple had become a respected innovative brand.
 BUSINESS MODEL IN CONTEXT OF INNOVATION

Business model is a strategy imposed by the organisation to make revenues and

profit from the operations. It includes all the business related function and take care
of financial activities.

Business model take care that how the company will represent itself in the market
and attract the customers and make itself safe. On the same what type of technology
and machinery will it use to run the company. business model can only run well if the
people involved in it are passionate and have the ability to run it in a effective and
efficient way. Business model plays a significant role in business and help to know
what type of product and services will it make and helps to achieve the organisational
goal.
.

Business model mainly has two essential role that are price creation and price
capturing. In context of innovation business model had played a vital role and some
of its role are as follows:

 Value proposition is the price made for the users by the offering.
 Checking a market segment is to whom the offer is made and for what aim it
has been provided to the user.
 Explain the model of the value chain required by the organisation to make and
spread the offerings and should include overall value chain from the supplier
of raw material to the final customer.
  Specify the revenue generation mechanism for the firm , and watch out the
cost structure and profit potential of creating the offering.
 Systemize the competitive strategy by which the innovating organisation will
achieve and capture an merit over rivals.
 Taking out the detailed description of the rank of the firm within the value
network, suppliers and consumers, including watching out the competitors.

VALUE CAPTURE AS AN IMPORTANT ISSUE FOR INNOVATORS

B

In order to understand the concept of value capture we need to know the meaning of
value creation. Value creation means to make something that the people want. Every
businessman aims at creating value so that they could satisfy their customers,
employees, shareholders etc. in a better way and grab more and more opportunities
for growth. Value creation occurs when there is an additional value being added to
the bottom line of a business. The first point of focus should be for creating value for
the customers the needs and expectations of the customers should be met, this can
only be done when right employees are employed, motivated and rewarded as well
as the investors keep on receiving constant returns on their investment. This all will
lead to value creation in a business.

Merely creating a good product does not ensure success in the market, though it is a
necessary first step in every business. The next steps, whose goal is to capture
maximum value from the new product, are crucial. In order to capture value, you want
to be in a good bargaining position with regard to the owner of the complementary
assets needed to leverage the innovation. You need to have market power over
critical resources required to make your innovation cash-generative. The customer
captures part of the value if the innovation improves the value proposition of the
goods or services provided. The innovator can benefit because the better value
proposition allows him to sell his product or service at a high price or the innovation
decreases his internal costs which in return increases the profit margin. The supplier
captures part of the value because the better value proposition or reduced costs due
to the innovation leads to the higher demand of product or service which in turn again
increases the demand for the supplier’s goods and services. The owner of
complementary assets benefits because the higher demand in the innovator’s good
also increases the demand in complementary asset.

Fig:- Innovation value-capture matrix

Value capture is an important issue for the innovators because the individual
innovators have to go through the cut throat competition in order to survive in the
market, it becomes a very typical task for the innovators with a new innovative
product to beat the existing product which is already in the market. Individual
innovators alone cannot manage each and every aspect of the business. It becomes
very difficult for individual innovators to alone hit their competitors and capture value.
Race from value creation to value capture requires not just vision, but intense
concentration and commitment. Vision and stamina are now mere point of entry into
the New Economy's value-capture marathon .

OUTCOME 2

WHY PRODUCT INNOVATION ATTRACTS MORE ATTENTION THAN

SERVICE OR PROCESS INNOVATION?
Product Innovation:- Changes in product attributes with a change in how the
product is noticed by consumer. The Dyson bagless vacuum cleaner is an example of a
product innovation. James Dyson developed what he terms ‘dual cyclone’ technology
(Dyson, 1997) and used it to create a new more efficient vacuum cleaner. The
innovative thing in this vacuum cleaner is that instead of employing a fan to suck dust
in a bag, it dispenses with the bag and uses Dyson’s patented ‘dual cyclone’
technology to extract dust and place the dust in a clear plastic container.

Service Innovation :- Services are intangible in nature. Service innovation implies

providing the services in a better way to the consumers so that they could have a
feeling of satisfaction. Service innovations typically take the form of a new way of
providing a service, often with a novel and very different business model.
Occasionally they even take the form of an entirely new service. The creation of the
‘Direct Line’ telephone insurance business is a good example of the first type of
service innovation. Other example of service innovation is Lastminute.com the
clearing house for late bookings on anything from holidays to gifts.
Process Innovation :- Implementation of a new or significantly improved production
or delivery method.

Product innovation attracts more public attention than service or process innovation
because services are often less spectacular and less eye catching. This probably has
something to do with the fact that where innovation is concerned, the public
imagination has always tend to identify with inventions, rather than innovation as
such. Because of their high novelty value, inventions are usually products. On the
other hand products are tangible in nature one can touch, see, use and the product
whereas services are intangible in nature. The products can easily be displayed at
various places but the services cannot be displayed as product ,one can know about
a particular service if he goes and consumes it. An innovation in the product is eye
catchy than service and process innovation. In the case of product a person
necessarily need not to buy the product he can touch, see or have demo to know the
new innovations in it but in case of services one have to personally visit and
consume the services .

TWO PROCESS INNOVATIONS WHICH HAVE HAD A BIG IMPACT ON THE

SOCIETY

If service innovations come second behind product innovation, then process

innovation almost certainly come a poor third. And yet process innovation often
have an even bigger impact on society than product or service innovations. Although
generally less well known than product innovations, examples of process
innovations, including ones that have had a dramatic impact on society as a whole,
abound.
 The humble photocopier, developed by Chester Carlson, may not sound like
a spectacular innovation, and yet it had a big impact on the way in which
administrative systems in offices are organised. One has only to look at what
happens in an office when the photocopier breaks down to see how reliant we
are upon it. Each and every office has a photocopier with it .
 Much less well known, but just as significant in terms of its impact on society,
is the Float Glass process developed by Alistair Pilkington, in which plate
glass is manufactured by drawing glass out across a bed of molten tin (Quinn,
1991). Prior to the introduction of this process innovation, plate glass used for
shop windows and office windows was expensive and of poor quality largely
because the only way of getting a flat surface was to grind it and polish it. The
Float Glass process at a stroke eliminated the need for time consuming
grinding and polishing it, leading to a dramatic fall in costs. Architects and
property developers could now afford to specify large sheets of plate glass
when constructing new buildings, where in the past they would have been
prevented because of the cost. The result can be seen in the public buildings
constructed in the last thirty years, where everything from office blocks and
hotels to airports and shopping malls now employ large expanses of glass.
Process innovations often have a big impact on the economics of production as well.
Henry Ford’s introduction of the moving assembly line at his new Highland Park plant
in Detroit in 1913 resulted in a dramatic reduction in manufacturing effort. Improved
productivity on this scale, enabled him to dramatically reduce the price of his Model T
car. Business-to-business (B2B) Ecommerce is dramatically reducing the need for
paperwork and those who process paper, namely administrators. It is no surprise that
all sorts of business organisations from airlines to insurance companies offer a
discount for buying online. One has only to look at the size of the discounts offered to
get an idea of the efficiency gains that firms can make.

OUTCOME 3

RADICAL INNOVATION AND ITS IMPACT ON SOCIETY

Radical innovation is about much more than improvements to existing designs. A

radical innovation calls for a whole new design, ideally using new components
configured (i.e. integrated into the design) in a new way. In Henderson and Clark’s
(1990) terms,
‘Radical innovation establishes a new dominant design, and hence a new set
of core design concepts embodied in components that are linked together in a
new architecture.’

Radical innovations are comparatively rare. Rothwell and Gardner (1989) estimated
that at the most about 10 per cent of innovations are radical. Radical innovation is
often associated with the introduction of a new technology. In some cases this will be
a transforming technology.

Radical innovation implies non-linearity and discontinuity. Radical or discontinuous

innovations result in fundamental changes to practice and markets, or indeed their
replacement. Such 'difference' can be traumatic. Radical innovation results in wiping
away the old while creating new opportunities.
In late November 2004, Dixons, a major UK electrical retailer, announced that they
would no longer stock VCRs (video cassette recorders) because these have been
outmoded by DVDs (digital versatile disks) and digital hard-disk storage products.
 VCR REPLACED BY DVD

The familiar but bulky cathode-ray tube (CRT) televisions and PC monitors are being
replaced by flat-screen technology. The manufacture of flat screens is a completely
different process from the manufacture of cathode-ray tubes. So when this transition
happens it is likely to destroy manufacturing plant and machinery and make CRT
design and manufacturing skills redundant.

CRT TELEVISION TO LED TELEVISION

RADICAL INNOVATION TECHNOLOGY IMPACT ON SOCIETY

Old New
Telephone Mobiles Telecommunication New means of mass
communication
VCR DVD Players Entertainment
player
CRT Television New leisure activity,
Television LED
Personal Laptops Microprocessor New administrative
Computer system, Internet
services e.g. banking
 INCREMENTAL INNOVATION IN WASHING MACHINES

Slow and steady wins the race

Incremental innovation refines and makes improvements in an existing design,

through improvements in its components. However it is important to stress that these
are improvements not changes, the component are not radically altered.
Christensen (1997) defines incremental innovation in terms of ‘a change that builds
on a firm’s expertise in component technology within an established architecture.’

Incremental innovation is not about making huge changes. On the contrary, firms that
innovate incrementally tend to do so just a little bit at a time. Incremental innovation
is done as cost cutting or feature improvements in existing products or services

The reason for incremental innovation being so popular is because it has reduced
risk in comparison to radical innovation. Once a company has a product up and
running it tends to have built up considerable amounts of human capital and
competencies so the firm may as well devote time to making it better or reducing
costs.

One example of everyday household object with incremental innovation is washing

machine In the case of the washing machine incremental innovation would be case
of offering a machine with a more powerful motor to give faster spin speeds.This will
complete the task quickly and result in saving time.
 TO
(LOW POWER MOTOR) (HIGH POWER MOTOR)
Incremental innovations are the commonest. Gradual improvement in knowledge and
materials lead to most products and services being enhanced over time. However
these enhancements typically take the form of refinements in components rather than
changes in the system. Thus a new model of an existing and established product is
likely to leave the architecture of the system unchanged and instead involve
refinements to particular components. With the system and the linkages between
components unchanged and the design of the components reinforced (through
refinements and performance improvements) this places such innovations in the top
left hand quadrant of where they are designated incremental innovations.

MODULAR INNOVATION

Modular innovation refers to the configuration of one or more parts or elements of the
existing product. It may result in the redesign of core components, while architecture
remains unchanged. The use of new or different components is the key element of
modular innovation, especially if the new components possess a new technology.
Is the application of better solutions that meet new requirements had existing market
needs. This is accomplished through providing more effective products, processes,
services, and technologies to the users.

EXAMPLE: CLOCKWORK RADIO

An example of this type of innovation would be the clockwork radio, developed by

Trevor Baylis. Radios have been around for a very long time. They operate on the
basis of electrical energy, normally provided via either an external power supply or
batteries. The clockwork radio is an innovation that employs a different form of power
supply, one that utilises a spring-based clockwork mechanism. The other
components of the radio, such as the speakers, tuner, amplifier, receiver etc remain
unchanged.
As a radio, the clockwork radio operates in the same way as other radios. It employs
the same kind of architecture in which the various components that make up the
system are configured and linked together in the normal way. However being
clockwork it does not require an external power sources and this is a very valuable
feature in those parts of the world which don’t benefit from regular uninterrupted
power supplies.
As with incremental innovation, modular innovation doesn’t involve a whole new
design. However modular innovation does involve new or at least significantly
different components. In the case of the clockwork radio it is the power source that is
new. The radio operates in much the same way as any other radio.
The use of new or different components is the key feature of modular innovation,
especially if the new components embrace a new technology. New technology can
transform the way in which one or more components within the overall system
operate, but the system and its configuration/architecture remains unchanged.
Clearly the impact of modular innovation is usually less dramatic than is the case with
radical innovation. The clockwork radio illustrates this well. People still listen to the
radio in the way they always have. But the fact that it doesn’t need an external power
source means that new groups often living in relatively poor countries without access
to a stable and reliable supply of electricity living can get the benefit of radio.
Clockwork radio has also opened up new markets in affluent countries, for example
hikers who want a radio to keep in touch with the outside world. Clockwork radio has
also provided an important ‘demonstration’ effect as it has led to other products, such
as torches, being fitted with this ingenious and environmentally friendly source of
power.

VALUE OF INNOVATION TYPOLOGY IN TODAY’S WORLD

Innovation typology basically refers to the classification of innovations or changes

which are being made in the products and services. These typologies help in
differentiating the innovations from each other and reduce complexity and confusions
regarding category of innovation in which it should be placed. Innovations are a result
of conscious, purposeful and committed search for opportunities in external and
internal environment of an organization and this categorization helps the innovators
to easily locate the sources and new insights of innovations.

There is overlap and there will be many occasions when it is a matter of judgement
as to which category an innovation should be placed in. innovations are not
homogeneous, innovations vary.

By distinguishing among the many typologies of innovations ,we can better manage
their development and better predict their sources and their impact.

Consequently any analysis of innovation needs a degree of sophistication that

can isolate exactly where the nature of the innovation lies. Categorizing innovations
in this way can also help to show that the influence of technology and technological
change can vary considerably. Technology works in a variety of ways. However its
impact will differ enormously when applied to whole systems or when, for
comparison, it is applied to individual components. Hence this form of categorization
has a predictive power, such that those who use it can much more effectively
evaluate the potential impact of a particular innovation. This typology can also help in
understanding the evolutionary process associated with technological change.

When a new technology appears it frequently leads to a proliferation of competing

system designs each with a different architecture. One could see exactly this
happening when the first cars were developed – there was a multiplicity of competing
architectures, and again when the first video recorders appeared. But through a
process of ‘shakeout’ eventually a common system architecture or ‘dominant design’
evolved and was adopted by all manufacturers. This kind of evolutionary process is
in fact very common and it has big implications for would be innovators and
entrepreneurs who need to recognise that if they enter the industry during the early
years there is likely to be a period of shakeout eventually. Even more important they
need to recognise that the dominant design that does eventually emerge is not
always technically superior to its rivals