Innovation is a very diverse term. In general, innovation means exploiting new ideas or change existing ones for the betterment. Innovation focuses on being creative at work. It can be technological, which includes product innovation or process innovation. Also, it can be related to changing business model, exploiting new markets, and developing new processes. The main aim of innovation it so make the business more successful. This can be done by increasing market share of an existing product or introducing a new product or reducing the cost of production.
Innovation is important for both employees and the owner of the business. For the owner of the business, innovation helps to keep up with the competition. With the fast growing pace of competition, the organizations have to be on toes to keep an eye on the work of their competitors. The new processes or technologies developed by the competitors can be benefitted from only if the organization introduces innovation in the company. For example, retail stores have faced tough competition from other brands that are available online. This could be coped by introducing online selling in the business.
Similarly, for the employees of any organization innovation holds great importance. Due to technological advancement the older generation of employees feels incapable to give their best. Hence, innovating their style of working will help employees to keep pace with any changes in the working style of the organization. This helps the employees stay confident and give their hundred percent in their work.
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Type of Innovation |
Definition | Relevant Examples |
| 1. Product Innovation | Product innovation includes improving existing products in order to increase their potential uses or introducing new products. | Apple incorporates product innovation in its organization by upgrading the existing iPhones in a way to increase its usefulness. |
| 2. Process Innovation | Process innovation can be defined as using a new or improved method of doing things in order to increase production and reduce cost. It involves introducing new equipment’s, technology or processes. | Ford, one of the most recognized automobile companies. The company innovated their manufacturing process using the first moving assembly line. This innovation not only simplified vehicle assembly process, but also reduced the time to of production to 90 minutes which earlier was 12 hours. |
| 3. Paradigm Innovation | This innovation is related to the mental models that construct the nature of the organization. | An example of this kind of innovation can be found in the international humanitarian sector. The innovation included emphasizing more on local ownership instead of internationally dominated responses. |
| 4. Position Innovation | Position innovation can be defined as changing the way in which a product is perceived by the customers. | Levi-Strauss jeans were originally developed as a clothing line for manual workers, but using position innovation the product line was transformed into one of the biggest fashion clothing range. |
| 5. Business Model Innovation | Business model innovation change is the basic foundational decisions on which the organization works. | IBM transformed itself from mainframes to personal computers and finally to technology services. This involved changing the core foundation of the business model. |
| 6. Structural Innovation | Structural innovation involves changing the structure of the business organization. It might include changes like more centralization or decentralization. | H&M launched in India with a centralized structure of decision making, but eventually the organization decided to decentralize the structure in order to provide quick remedies and fast decision making. |
| 7. Application Innovation | Application innovation is similar to product innovation. It involves discovering new uses of existing products or finding new audiences or re-combining existing functionalities to improve the overall quality of the product. | Macintosh computers started using fault resistant computer systems to run ATM networks is an example of application innovation. |
| 8. Disruptive Innovation | Disruptive innovation can be defined as an innovation which creates a new market and network that will eventually disrupt an existing market. | Ultrasound technology was disruptive to X-ray imaging technology. It was a new market innovation. Eventually all the X-ray companies acquired major ultrasound equipment companies. |
| 9. Experiential Innovation | Experiential innovation is mostly witnessed in offering new services or by adding a new service to an existing product. This involves providing one to one attention, giving a personal touch and increasing the level of value add. | In the 2012 Olympics, Samsung introduced brand experiences at various locations in London that focused on demonstrating the newly launched Galaxy S3 and Galaxy Note. The visitors could get their pictures clicked and could play on the Olympic games app of the gadget. |
| 10. Marketing Innovation | Marketing innovation involves being creative in designing the marketing campaign of the organization. The changes are made to an existing market plan or an altogether new market plan is introduced. Market innovation is a very common phenomenon as the opportunities are increasing everyday and the business wants to make the most of it by using their marketing technique to fetch maximum customers. | In 2013, IKEA launched a marketing catalogue application that not only provided customers with the access to the companies’ products, but also through augmented reality, enabled them to see how good or bad a produce, would look their house. |