Types of innovation
- Product
When we think about innovation we often consider the innovation of products. We are all familiar with new electronic devices, such as the iPad - this is a typical type of product innovation.
Course: Innovation: the Fashion Industry
- Process
We consider less often how a product has been produced: for example, the manufacturing technology behind the production of the iPad. This is called process innovation.
- Service
Service companies provide innovative services to their customers instead of products. Credit cards and internet banking are familiar examples of service types of innovation.
- Business model
Business model innovation involves making changes to the ways a company creates value for its customers and how the company captures the value from the innovation. Examples of this are Amazon, the internet bookstore, and ‘no-frills’ airlines.
- Organisational
Organisational innovation is also referred to as managerial innovation. This involves fundamental changes in practices, processes, and the structure of how the activities within the business are managed. Examples are lean manufacturing, total quality management, outsourcing, and the supply chain.
Levels of innovation
- Incremental
Incremental innovation could be described as taking a successful product/service/process and improving it incrementally. An example could be the different generations of iPads designed by Apple: each subsequent generation of iPad is improved, with better resolution and a more streamlined casing.
- Radical
Radical innovation happens less frequently but has a huge impact. An obvious example is the invention of internet, which has had an impact on people worldwide.
- Disruptive
When we consider disruptive innovation, we are focusing on the consequences of change. Digital imaging, for example, was a technological change which for some had a disruptive effect: this innovation impacted on Kodak’s core capability, in they didn’t manage to switch successfully from film to digital imaging. It is not only technology, however, which can be disruptive: a business model can also be disruptive, requiring companies to adapt.
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