PhD Graduate and result-oriented Director with 25 years experience with involvement in all levels of Business Strategy, Sales and Marketing, Managing Project and Product Development. Aside of managing a company, he is also the best corporate trainer and public speaker in seminar and conference.
These 3 Key Types of Innovation are Crucial for Your Business
Innovations is the process by which an organization conceptualizes brand new products, processes, and ideas, or to approach current products, processes, and ideas in new way. Successful innovation enables you to add value to your business and increase profits—if you don't innovate well, your business will plateau.
There are more competing businesses than ever before as a result of globalization and a rapidly changing market. However, staying ahead of the competition is made easier with innovation. There are 3 types of innovation which are common in business.
Product Innovation
Product Innovation is the development of a new product or the improvement of an existing one. This type of innovation aims to make customers' lives easier by solving an issue in an unique or unexpected way. It starts with thorough research that discovers opportunities as well as ways to apply the changes to a company's product line to better serve the customers.
When successful, an innovative product or service better serves the needs of the market, resulting in increased sales and revenue for the company. However, the costs of developing new and improved products can be prohibitively expensive, and businesses run the risk that now the market will not respond favorably to the changes made to their product.
Process Innovation
Process innovation is about developing new or significantly improved methods for creating and delivering services. The process can entail significant changes in the equipment and software used in service-oriented businesses, as well as in the procedures or techniques used to deliver services.
Process innovation also includes new or significantly improved techniques, equipment, and software in ancillary support functions such as purchasing, accounting, computing, and maintenance. This type of innovation is frequently overlooked because it does not always result in a direct or measurable increase in demand or revenue. However, if this type of innovation is successful, it has the potential to reduce production costs while increasing revenue.
Business Model Innovation
Business model innovation is the process of changing the value provided to customers and the manner in which that value is delivered in order to generate profit. These changes can affect the target segment, product or service offering, and revenue model. Furthermore, it focuses on how to drive profitability, competitive advantage, and value creation through these value proposition delivery decisions.
Simply put, business model innovation is probably the most important tool for creating a business that maximizes value for all stakeholders: customers, shareholders, employees, and society at large. When done correctly, business model innovation can be extremely powerful and have a long-term impact on business as well as the national or global economy.
Conclusion
Innovation is important to help businesses predict the market and keep up with the changing customer needs. If your business doesn't innovate, you'll watch innovative companies and start-ups bring new ideas to the market and you'll have to scramble to keep up with them and survive in this era.
Understanding these 3 types of innovation can be highly beneficial for the success of your business. Find out more about Digital Innovation Strategy to strengthen your business only at Multimatics!
Sources:
Miller, K. (2020, November 30). 3 Types of Innovation Changing the Future of Business | Northeastern. Northeastern University Graduate Programs. https://www.northeastern.edu/graduate/blog/types-of-innovation/