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Innovations

Innovations – Definition, Different Types, Important, and More

Innovations Definition

Innovations is a concept closely linked to the business world. To innovate is to improve what exists, providing new options that meet the needs of consumers or even create new products to be successful in the market.

Thorough knowledge of the products, the market, the company’s contribution of value, the needs of consumers, a series of changes and criteria can find to innovate in them and make them useful in the market.

Different Types of Innovations

innovations

According to the fourth and latest edition (2018) of the Oslo Manual, there are four main types of innovations:

1. Organizational Innovation

Organizational innovation refers to the development of a new corporate strategy that will, in one way or another, change the business practices of a company, as well as the way its work organize and its relations with the parties—external stakeholders.

Examples of organizational innovations:

The first companies to adopt a four-day-a-week work schedule of just 4 days a week.
The first companies to yoke the power of digital and allow employees to skip the desk and work from home (depending on the position).

2. Innovation Process

Process innovation is implementing a new or improved production or delivery approach, including changes to operating methods, techniques used, and also equipment or software.

Examples of process innovations:

The first companies that turned to SaaS (software as a service) technology and used it. For example, Talkdesk cloud contact centers changed the way their customer service processes organize.

And also, the first hotels that decided to make big data-based decisions using, for example, information from the Climber Hotel changed their approach to decision-making.

3. Product Innovation

Product innovation is the introduction of a new or better good or service. These inventions or modifications may be related to enhancing technical specifications, materials or software used or even to the advancement of UX (user experience). However, product innovations do not need to improve every feature or performance specification. And also, the development or addition of a new function may also be associated with the loss of other parts or the degradation of certain other specifications.

In addition, a product innovation must be available to potential users, but it does not necessarily have to generate sales. Because if this were the case, innovations with low demand or, for example, digital products such as free applications would exclude. At the same time, routine vicissitudes or updates do not consider product innovations as they only fix bugs or make seasonal changes.

Examples of product innovations:

Lego has swapped the materials of its famous bricks for biodegradable oil-based plastics.
The first electric vehicles introduced to the automotive market were also innovations. And also, the new batteries with a more extended range that keep coming out are also an example of innovation.

4. Marketing Innovation

Marketing innovation means emerging a new marketing strategy that produces changes, such as how a product is designed or packaged, or even in other decisions related to pricing or promotion. Trello has a substantial free tier, but we explained the cost and value. Is it two paid plans in our Trello pricing work?

Example of marketing innovation:

New waste-free container from Haagen Dazs

Why are Innovations so Important?

innovations

Organizations have numerous options to increase their competitiveness: aiming for price leadership or developing a differentiation strategy. In both cases, innovation is essential.

Companies that choose price leadership must ensure their long-term competitiveness by developing innovative and highly efficient processes. Process optimization and continuous cost improvement are essential to them.

Companies striving to adopt a differentiation strategy need innovation to develop distinctive characteristics unique to their competitors.

Many startups start their activities by developing an innovative product or service. Therefore, continuous innovation is essential for all companies. And also, the main difference is in the direction of the innovation strategy, which varies considerably from one company to another.

How to Establish a Culture of Innovations?

The Internet offers new potentials for communication and collaboration. Appropriate software tools can support the implementation of innovation processes and a culture of innovation. For example, innovation teams can make workspaces for different innovation projects, develop ideas together, and prepare them for implementation.

Innovation tools also ensure creating a culture of innovation in the company and removing barriers to creativity and innovation. By establishing the right culture, employees observe innovations as a positive change and support innovation with motivation and enthusiasm.

Conclusion

Innovations use to associate with the idea of progress and the search for new methods, based on the knowledge that precedes it. And also, to improve something that already exists, solve a problem, or facilitate an activity.

Innovations are a continuous action over time and cover different fields of human development. Among other terms that have a similar meaning and can use synonymously are advancement, invention, reform, and renovation.

Also Read: What is Business Economics? – Understanding, Types, and More

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