Definition of innovation
Innovation can be described as the application of new ideas so as to develop a product, service or process. It is not only concerned with coming up with new ideas, but rather taking it to the market too and using it in a way that generate goods, services or processes that improve on previous quality. Innovation will comprise of technological and management restructuring. Use of new technology and encouraging new ideas to add value and bring about significant change in a given society is a character of innovation. Different types of innovations that exist include product innovations where new product is introduced into the market; process innovation which encompasses implementation of enhanced techniques and supply chain where there is improved sourcing and delivery of products (Shukla, 2009 p.1).
Currently, open innovation is the most common in most of companies as the researchers are able to go beyond organizational boundaries as indicated by dashed lines in the above chart. Other companies that need to utilize the technique are supposed to licensed first before they can take advantage of the new technology. Green lines show techniques licensed to other firms that would otherwise be idle and were not developed by firm but could be useful in an organization’s operations (Chesbrough, 2003 p.45).
Importance of innovation to organizations
Innovation is and continues to be important to every organization and its significance is becoming evident as it becomes a key player in strategic planning. Innovation has been said to lead to enhanced earnings besides helping in continuous sustaining of organizations. In order to be important, most organizations are coming up with strong products or services. Companies are coming up with measures to sustain their innovation like development of dependable operating systems (Shukla, 2009 p.1).
Drivers of innovation
Upward trends in demand and rivalry among firms have been the major drivers for innovation. Rivalry leads to innovation and production while social expectations are playing a crucial role in innovation. Increased knowledge on social values, co-dependency concepts and a focused society with different ideas on technology are the social factors leading to innovation. Organizations are being forced to fulfill the conditions or be thrown out of business (Dearing, 2000 p.9).
Analysis of the paper was on innovation in IKEA. Innovation involves introduction of new products, processes or services to the market. In order to increase earnings and to have a competitive edge than the rivals, an organization must develop a sustainable innovation by introducing strong products, services or processes. Rivalry and increase of customer base drives innovation in addition to social expectations. IKEA has taken the initiative of ensuring that the innovative strategy is a sustainable one. IKEA has over time improved on quality of products it offers and increasing quantity too. All the products come at cheap prices hence increasing loyalty of clients. Increased customer base by extending to other regions has also been a strategy of innovation adopted by IKEA. IKEA too has realized that a good culture is what contributes to a good innovation strategy and the company has built on this. The culture established by IKEA has proved hard to be beaten by other organizations. In all the years, the organization has delivered to its clients’ better products which complement their mission and culture. This is what entails innovation, meaning that IKEA is on the right path towards sustainable innovation (Denison, 2008 p.1).
List of References
Chesbrough, H., 2003. New imperative for creating & profiting from technology. Boston, Massachusetts: Harvard Business School Publishing Corporation.
Chesbrough, H., 2010. Open Learning, Web.
Dearing, A., 2000. Sustainable innovation: drivers and barriers. World Business Council for Sustainable Development, Geneva.
Denison, D., 2008. Creating a successful culture of innovation: 1% inspiration, 99 % perspiration. Web.
Shukla, A. 2009. What is innovation? Why innovation is important. Web.