apply the concepts of innovation, and creating and developing new ideas as an approach
to the development of products and markets;

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Innovation is the act of introducing something new.


Innovation refers to the development of new products, services, processes and other outputs which change the landscape of the organisation, the markets it penetrates and/or the products it offers

R&D will not necessarily produce results. They suggest that the most crucial factors of driving innovation are strategic alignment and a ‘culture that supports innovation

figure 4.3!!!!!!

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GSDTCLS

Innovation is largely the first two steps of the process outlined

Benefits of the innovation:


DOGR


  1. Maintain relevance in the marketplace/industry;

  2. Manage opportunities and threats;

  3. Diversify revenue avenues;

  4. Reach growth targets;

Product Development – New product for Existing markets
• Organisation aims to modify and develop products which closely relate to existing products and then attempt to sell them to the already existing market.
• The customer base is known and familiar, and target customers can more be involved in product specification


Methods of product development

  1. Add features to existing products (new packaging or pack sizes)

  2. Expanding the product line (adding new flavour option)

  3. Developing an new generation product (iphone5 to iphone6)

  4. Developing completely new product (iPhone then iPad)
    FGEN

Product development process (Innovation):


GSDTCLS (below)

Figure 4.4 illustrates a way in which ideas can be plotted so that they can be identified by categories of potential success. It acts as a gating process, to identify the high-potential ideas that need further analysis.

figure 4.4

BHIM


The four quadrants provide a projection of cash flow for each associated category, depending on
its investment and opportunity potential.




• Mandatory projects. Large investment, small opportunity yet substantial spend and little
chance of financial return; however, these projects are mandatory to an organisation and
need to be conducted regardless (e.g. the National Broadband Network).


• Breakthrough innovation. Large investment and large opportunity if the organisation is willing to incur high expenditure, with the chance of increased financial return if successful (e.g. voice recognition technology, Virgin space travel).


• Incremental innovation. Small investment and opportunity; however, often little expense incurred and the potential for a slight return on investment (e.g. often exhibited by phone and automobile products, where each new model released features innovative creations that improve on the previous model).


• High growth business. Small investment yet large opportunity which may incur a substantial expense; however, it could result in a high return on investment if successful (e.g. the development of ‘apps’ to support the organisation’s products and services).

A decision by the organisation about which category to pursue and develop will help eliminate ideas that are outside the scope of the risk the organisation wants to take in developing these ideas into innovative products and services.

incremental innovation,


which focuses on developing the existing products and markets to obtain market growth and improve on competitors. This innovation is often conducted on a business unit basis, on a smaller scale and with fewer dedicated resources. For example,e,g Colgate widening opening to increase usage

Without innovative ideas and offerings, organisations will face a loss


of revenue to competitors, possibly increased staff turnover and inefficiencies in outdated processes.

Idea generation and the task of innovation is a successful way to grow an organisation,


and crucial to the success of organisations operating in competitive markets.


. Innovation is becoming a crucial area of strategy and potential growth for organisations.