The competitive landscape of today is strongly reliant on innovation. Because outdated solutions can't solve many challenges, business leaders must continually explore fresh methods to innovate.
Here's a rundown of what Innovation in Business Strategy is, why it's essential, and how you can foster it at work.
WHAT IS INNOVATION?
The terms "innovation" and "creativity" are frequently used interchangeably. They're not the same, despite their similarities. Creativity is vital in business since it creates innovative ideas. Novelty is an important aspect of innovation.
An idea must be both new and beneficial to be considered innovative. Because creative ideas may not always yield feasible answers to issues, they do not always lead to innovations.
Simply said, innovation is a new and valuable product, service, business model, or strategy. Innovations do not have to be technological breakthroughs or new business models; they may be as basic as customer service improvements or new features added to an existing product.
Types of Innovation
There are two types of innovation in business strategy: sustaining and disruptive.
- Sustaining innovation: Maintaining innovation improves a company's procedures and technology to improve its product range for current customers. It's usually sought by incumbent corporations looking to maintain their market leadership.
- Disruptive innovation: When smaller enterprises take on larger businesses, disruptive innovation develops. It may be divided into categories based on the marketplaces in which the companies compete. Organizations entering and claiming a section at the bottom of an existing market are referred to as low-end disruption, whereas companies forming a new market segment to service a consumer base that the present market does not reach are referred to as new-market disruption.
Both sorts of innovation are included in the business plans of the most successful organizations. While preserving a market position is critical, seeking expansion is necessary to remain competitive. It also aids in the protection of a company's reputation from rival businesses.
Innovation's Importance in Business Strategy
In business, unexpected obstacles are unavoidable. Staying ahead of the curve and growing your business may both be accomplished via innovation. Here are three reasons why your company has to be innovative:
- It allows adaptability: The current COVID-19 epidemic caused massive economic disruption. Over a few months, routine procedures were rendered obsolete. Because they've remained to the status quo, many firms are still suffering unfavorable consequences as a result of the global transition. Innovation is frequently required for businesses to adapt to and overcome change's problems.
- It fosters growth: Stagnation may be incredibly damaging to your company. Staying afloat in today's highly competitive world requires achieving organizational and economic growth via innovation.
- It distinguishes firms from their rivals: Multiple rivals provide identical products or services in almost every industry. Your company's innovation can set it apart from the competition.