BUS 6111

What is Innovation
 Objectives of this week

• Innovation in context
• Types and dimensions of innovation
• Relate innovation, creativity and entrepreneurship
together
• Examine and explain the role of creativity and
innovation in entrepreneurship

8-196
 What is Innovation

• Finding novel solutions to important problems is a crucial

component of modern business life.

• Development of new products, new processes, new sources

of supply, but also to the exploitation of new markets and the
development of new ways to organize business.

• Innovation is creating new value and/or capturing value in a

new way. Value is the key word, stressing the difference
between innovation and invention.
 What is Innovation

Some examples of innovations:

 Trilogy Natural Skin care products

Innovation in skin care products by wo sisters

 Les Mills fitness centers

Innovation in group classes made them one of the best in the
world in group fitness
 Dimensions and Degrees of Innovation

• Nature of innovation is creativity and change

• Innovation happens in different speeds and degrees.

 Incremental Innovation
 Radical Innovation

• On the other hand there are four dimensions of Innovation.

 Product Innovation
 Process Innovation
 Position Innovation
 Paradigm Innovation
 Degrees of Innovation

• The speed and level of novelty involved in the process of

innovation/change defines its method, whether radical or incremental.

• Two ways that companies can innovate, incrementally or radically

• This is a neat way of saying “a little bit at a time” or “in a completely crazy
way.”
 Degrees of Innovation

Incremental Innovation
• Incremental innovation is not about huge sweeping changes.
• Firms that innovate incrementally tend to do so just a little bit at a time. 
• The reason incremental innovation is so popular is because it has reduced
risk in comparison to radical innovation.
• Once a product is produced and distributed, incremental changes happen
to keep it up to date and relevant to the market.
• For instance Gmail ® is result of an incremental innovation process
 Degrees of Innovation

Incremental Innovation
Story of Gmail ®

In 2004 a new email service was

Gmail’s interface in 2004. Incremental changes were The new Gmail is one of the
introduced, it was different and
Gmail’s creator, Paul Buchheit, at Simple, and missing all the tools introduced through time, such as best email services available in
very simple as well
his desk at Google in 1999 you find today Calendar, Auto complete etc the world
 Degrees of Innovation

Radical Innovation
• radical or disruptive innovation is an innovation that has a significant impact on a market
• This concept focuses on the impact of innovations as opposed to their novelty.
• A company like Virgin Ltd. radically innovates their offering but incrementally innovate
how they bring it to market.
• Another example of radical innovation is Amazon. Jeff Bezos changed the way retail
was working
 Dimensions of Innovation
Product Innovation
• It is a change in products
• This changes can be dramatical or simple and small
๏ A change in car design
๏ A new Insurance policy for certain type of people

Process Innovation
• It is about changes in process and methods
• Processes of production to methods of delivery
๏ A new product delivery method
๏ Changed process of insuring clients
 Dimensions of Innovation

Position Innovation
• Change in product positioning
• Change in context in which product is introduces
๏ From an expensive product to cheap solution for another target market
๏ From kids product to an adult category product

Paradigm Innovation
• Changing underlying models of an industry or sector
๏ Ebay changed traditional models of auctions
๏ Henry Ford changed automobile industry model
Dimensions of Innovation
Another Detailed Look at Innovation and
Entrepreneurship Process
 Another Detailed Look at Innovation and
Entrepreneurship Process
Recognising the opportunity
• Inspiration for innovation come from many different sources
๏ From a change in legislation to competitors’ reactions or simply need to change
• Not all innovations are successful or profitable like the Video Phone.
๏ They started with a bit of buzz but then it faded away as the
the market was not ready also they seemed impractical
• Once the opportunity is recognised, firms go through a process to make it
happen.
 Another Detailed Look at Innovation and
Entrepreneurship Process

Finding resources
• Always a big issue for innovation and also entrepreneurs are resources
• Innovations are risky and not many investors are willing to invest
• Remember not all resources are financial resources, land, human resources, capital
and natural resources are also part of it.

Developing venture:
• After resources are identified, it is time to implement
• This stage requires skills to work coherently to build the venture
• Commercialisation happens at this stage.
 Another Detailed Look at Innovation and
Entrepreneurship Process

Creating Value
• Not all innovations are suitable for market
• It is important to see if this innovation adds value tor delivers value to target
audience

Class Activity:
This class activity is a debate between two to three groups of students. Teacher divides the class into
different groups. One group will be arguing for and the other group against the values of innovations below.
Try to convince the other group if the mentioned innovations have enough value to invest in them. Take
sometime, read about the innovation online and build your argument.
Rules:
• Respect, Respect and respect each other
• Teacher is the educator and decides which group is the winner
Innovations: Finger print scan in Samsung S5, Hydrogen cars