Innovation Strategy: Its Importance and Relevance to the Business Process - Essay Example

Section/# Innovation Strategy: Its Importance and Relevance to the Business Process One aspect of doing business that has manifestly been demonstrated throughout the past several years is with respect to the fact that developing and promoting an effective strategy of change and/or innovation has a direct correlation with respect to the overall longevity and hope for the accrual of profitability for a given business venture. Due to the fact that the business world continually changes and shifts, the need to continually re-define the product or service is a goal that all firms should be mindful of. Moreover, the degree and extent to which a small enterprise is able to engage innovation in terms of defining and delineating a strategy for integration with the business world is of the utmost importance due to the fact that it allows it a means of providing a new and differentiated product or service to the consumer market (Buncombe, 2010). As a means of understanding the the importance of integrating an innovation strategy for a small firm/business enterprise, the following analysis will focus upon the hurdles strategy formulation as well as the means by which the known and unknown factors of innovation and strategy can be determined. Through such an understanding, it is the hope of this author that the reader will come to a more informed realization with regards to the impact full level of importance that innovation strategy portends for a given business entity. Firstly, much of the information that is thus far been presented has been concentric upon the fundamental decision whether or not a firm should seek to engage innovation strategy in the first place; and/or whether innovation strategy is something that can be planned or should come naturally. At its very core definition, innovation strategy can be defined as “a plan made by an organization to encourage advancements in technology or services” (Ercan, 2013). Such an understanding can be associated with the writings of Phillip Shapiro. However, part and parcel of innovation strategy is the fact that this strategy, perhaps more than any other, has the ability to determine the way in which all component parts of a business or firm will operate (Shapira, 2008). In such a way, innovation strategy, if it is employed, can have the power to determine the way in which decisions are made, component divisions are managed, and issues related to purchasing and personnel are determined (Capozzi et al., 2013). Such an all encompassing level of importance commands a certain level of respect as innovation strategy, if employed correctly, can ultimately lead a firm or business entity from an almost certain decay to a period of sustained growth and profitability. An obvious limitation that must be discussed is with respect to the fact that small businesses cannot leverage a high degree of funding and/or resources to promote innovation. This weakness is evidenced heavily with respect to the manner by which many small businesses choose to forego innovation strategy and planning entirely. However, as can easily be noted, the dangers of choosing not to allocate resources to this particular planning/strategizing process speak for themselves. Another limitation is with respect to the fact that an allocation of time and available manpower to accomplish such a task is also generally quite limited within the small business. Yet, these factors notwithstanding, an effective innovation strategy, even for a small firm, can greatly enhance the long-term outlooks for success and profitability that can be expected. However, the fact of the matter is that many firms are hesitant to engage with innovation strategy due to the fact that it engenders too many elements of the unknown. Many stakeholders within such firms point to the fact that due to the inability of the management to foresee the future, engaging in innovation strategy and appropriating resources to it is tantamount to an exercise in futility (Shwu-Ing et al., 2011). Although there is at least a certain level of truth to this, the fact of the matter is that innovation strategy has been proven to have positive impacts with regards to the way in which a given small business entity is able to anticipate and plan for the shifts and changes that will very doubtless be a part of their own evolution and growth/development process (Hanna, 2004) From the information that is thus far been presented, it must be understood that both small and large firms alike must choose whether or not they will engage in innovation strategy; and if so to what extent (Harrison, 1992). For smaller firms the invariable focuses upon cost; whereas in larger firms a level of safety exists in the focus can expand to long-term impacts. However, even though it might be misconstrued to mean that the innovation strategy that is employed by both small and large entities is somehow similar, this is in fact not quite the case (Krugel, 2007). Due to the overall level of funding and teams available to manage innovation strategy, the established firm is clearly at an advantage; however, the small firm that seeks to provide a well rounded approach to the market and continue to integrate with the needs of the consumers must also engage in innovation strategy; not only to capture the largest market but to ensure that the firm itself is attuned to the possible variables that may present themselves within the industry/consumer base within the future. For this very reason, it is extraordinarily important that the entity in question integrates with the most effective strategy that promotes the business focus and key specialties that they seek to provide to the market (Clausen et al., 2012). Without a perfect correlation between these aspects, it is doubtful that any level of profitability and/or sustained success will be noted. Further, the importance of innovation strategy can clearly be seen with regards to the way in which floral firms either integrated or did not integrate with the new FTD internet ordering systems. Previously, FTD orders had been called in to the local florists from a large corporate FTD office. However, as the means of consumers ordering floral arrangements shifted to the internet, it was required that these local offices adopt new technology as a means of innovating and changing with the times. As can be expected, some florists did integrate with the new system and some did not; ultimately, those that did not found themselves hurting for profitability after the internet revolution succeeded in fundamentally changing the way in which floral arrangements were ordered Within the current era of rapid change and complete integration of technology within society as well as the market, a business entity cannot afford to miss the opportunity of integrating with the direct and visible needs of the consumer (Abrams, 2010). As such, maintaining and up-to-date innovation strategy and promoting this throughout the various litany of different channels is as important for the small business entity as it is for the multinational corporation. However, as has been specified, the margin of failure is so much smaller for the startup enterprise and therefore does not allow for any level of experimentation or possible failure with regards to the approach (Barone & Jewell, 2013). Naturally, this is but one of the factors that delineates the real world reality that only one in three startup ventures survives its first few years in operation. Ultimately, even though there is not a specified “best practice” for innovation management, the review that has been performed helps to point firmly to the understanding that those firms that actively engage in this process are at a noted advantage as compared to those that merely dismiss it as a waste of time and resources. References Abrams, T 2010 'TECHNOLOGY & INNOVATION MANAGEMENT’, Academy Of Management Annual Meeting Proceedings, pp. 1-103, Business Source Complete, EBSCOhost, viewed 24 October 2013. Barone, M, & Jewell, R 2013, 'The Innovator's License: A Latitude to Deviate from Category Norms', Journal Of Marketing, 77, 1, pp. 120-134, Business Source Complete, EBSCOhost, viewed 24 October 2013. Buncombe, L 2010. 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