Managing Innovation

Introduction

Innovation refers to the process of creation of a new product, service, process, technology or addition of value to existing goods and procedures to serve the needs and demands of consumers. It is essential for business enterprises to indulge in innovative practices on a regular basis so as to  receive assistance and recognition from customers, government as well as professional bodies (Helper and Henderson, 2014). By bringing in innovations in the form of products or services at frequent intervals, companies strive to build trust and loyalty among customers and retain them for a long duration of time. This report is based upon made.com which is a retail brand dealing in furniture and housewares online as well as across a wide network of experiential showrooms located within Europe.

This enterprise is headquartered in London, United Kingdom. It will gain an insight into two innovation theories and its implication in context of the organisation. Also, the historical as well as future development of goods and services is discussed.

Innovation Theories

Innovation is one of the most crucial concerns of every company and its role within the marketplace is alienable. This ascertains the extent to which an organisation indulges in creation of a new product or addition of value to existing procedures. Innovation can be brought about in terms of product or service development, ways of carrying out work, methods of management of tasks etc. (Noble, 2017). This is an element which strives to provide a strategic edge to an organisation within the market. Innovation drives the attention of customers towards the range of new and unique offerings of enterprise and works towards the growth of business in long run.

Besides this, innovation tends to provide satisfaction to customers by way of providing such products and services which can fulfil the needs, demands and requirements of consumers in the marketplace.

The need for entity to bring innovative processes and techniques is determined by Research & Development (R&D) department within the enterprise which keeps on conducting study in relation to the latest trends and techniques prevailing within industry (Grandori, 2012). The company then undertakes steps to execute such advanced technologies and procedures across the premises to gain recognition in market and retain customers for long duration of time. In this regards,  various types of innovation theories can be used and implemented by enterprise, some of which are specified below:-

Diffusion Of Innovation (DOI) Theory

This is a theory proposed by E.M. Rogers in the year 1962 and exist as one the most ancient social science theories. It is generally used in the process of communication and explores the ways in which an innovative idea or  process is communicated by way of utilisation of various channels. There can be a number of ways through which data can be transmitted, ranging from interpersonal communication to mass media. Diffusion of Innovation (DOI) theory assists in determining those aspects which affect the rate at which innovation is adopted by an individual (Goolsbee and Krueger, 2015).

It explores the manner in which an innovation first gains momentum and then diffuses across a specified population. The end outcome of such diffusion is adoption of innovative idea or process. The most crucial aspect of such adoption is that personnel must be able to perceive the new or modified idea, goods or technology.

As per this theory, adoption of innovative idea, technique, product or service does not take place instantly, instead this is a process which requires the element of time. Here, some individuals adopt the innovation while others adopt it later. It is generally observed that individuals who adopt innovation at an early possess different behavioural characteristics than those who adopt it a slower pace. While promoting an innovative practice or process among a target audience, it is imperative that focus is laid upon the behavioural characteristics of individual within such population so as to identify the probable chances of adoption of innovation (Dodgson, 2018). According to the philosophy of this theory, there exist five adopter categories and although majority of the individuals belong to middle categories, yet it is essential to gain an insight into the traits of target audience. Different strategies are utilised by business organisations while appealing to various adopter categories.

As per this theory, adopters are defined as “individuals, groups, business entities or larger population prevailing amidst the social system categorised as per their ability to adopt innovation.” The five adopter categories which are included in Diffusion of Innovation (DOI) theory are described below:-

Innovators: 

These are the individuals which are keen to adopt an innovation and possess an enthusiastic approach towards any new product, process, technology or service. They possess high level of risk tolerance and are willing to adopt an innovation irrespective of the probable chances of its failure.

Early adopters:

 These individuals are much more discreet when it comes to their adoption choices in comparison with innovators. Early adopters represent opinion leaders and embrace the change opportunities in order to adopt such potential products which may assist in providing a strategic edge to them or the organisation in marketplace. They are highly aware of the need to adopt change and thus, appreciate new and innovative ideas or processes. Strategies by which an entity can appeal to this include 'how-to' manuals as well as information sheets which contain data related to formulation (Key Innovation Management Models and Theories, 2019).

Early majority: 

This group includes those individuals which adopt innovative ideas or processes in a significantly long course of time when compared to innovators or early adopters. They constitute majority of the marketplace. Such personnel require an evidence in relation to success of innovation before adoption of any innovative idea or procedure. Strategies that can assist in influencing people belonging to this group include evidence of effectiveness of innovation, success stories etc. (Greer and Hauptmeier, 2012).

Late majority: 

The personnel belonging to this category are immensely cautious and skeptical of adopting innovation. They generally adopt innovative practice or process only after seeing a proof of its favourable outcomes or ensuring that it has been adopted by majority of people. Strategies that can be utilised for targetting this population can comprise of provision of data related to the number of persons who have previously tried and adopted the innovation feasibly.

Laggards: 

The people belonging to this category are last to adopt the innovative practice or process as they are largely bound by conservative and traditional thinking and ideology. They are immensely skeptical and are the hardest to be convinced for adopting the innovation. Strategies that can be formulated to appeal to this category can comprise of fear appeals, statistics and pressure arising from personnel who are a part of other adopter c

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