The Importance of Innovation to Companies - Case Study Example

Innovation and Change Introduction The of innovation is an essential factor in the progress that can be made in various companies and organizations and thus cannot be ignored when dealing with the growth of a business. The various implementations that are applied to achieve a particular objective can be seen as types of innovation and this brings out the relationship between change and the element of innovation when striving to bring about positive changes to a company. When looking at innovation from what can be termed as an organizational aspect, it can be seen as the differences that bring about a positive change to various aspects of the company such as its production levels, economic stability as well as growth in the particular market it is situated in (Davila, Epstein & Shelton, 2006). The activities that take place when trying to achieve these changes can be seen as the product of innovation by the company. It is especially essential for individuals dealing with innovation to realize the various methods and approaches that can be taken when dealing their implementation and management. The identification of these approaches allows a manger to select the most appropriate approach for their company and as a result enhance the chances of success a company has at attaining their objectives. The relationship between innovation and change comes into play as a result of the effects that a particular action may have on a company (Fichter, 2009). It also brings about the question of how important a role innovation plays in the growth of a company and whether this growth can be achieved minus the involvement of innovative approaches applied by the mangers. In order to fully answer these questions, one has to look at a particular company and the innovative implementations involved when looking to promote a positive impact on the organization (Heyne, Boettke & Prychitko, 2010). An industry that can be used to further expound on this concept is the vehicle industry with a leading company such as Toyota being the topic of the study to determine the role that innovation plays in the growth of a company. It should be noted that despite the fact that innovation is an important element in itself, the management of these innovations determines the success that an individual is able to enjoy in the resulting outcome. The Importance of Innovation to Companies There are various ways that innovation can be considered important in regards to the development and growth of a company. The key aspect that plays a role in this essentialness is the point that an organization cannot remain stagnant in a consistently developing market if it is to achieve or maintain its success (Strumsky, Lobo & Tainter, 2010). This particularly true in the vehicle industry as rival companies struggle to come up with new products (and features for their already existing products) so as to maintain the concerns of the market as well as adapt to new conditions that may have been set by a change in the mindset of their target market. Toyota has been one of the main global leaders in the production of cars and it can be said that its survival has to a point relied heavily on innovations and the change that is brought about by them to the products they have to offer. The importance that innovation holds to a company can be measured by studying a number of elements in the company as well as the markets they are targeting and determining their relationship to the progress of the company in terms of financial and market-based growth (Strumsky, Lobo & Tainter, 2010). Some of these elements include issues such as: Financial Growth and Economic Stability–The issue of money can be considered to be the foremost concern of most companies (with the exception of non-profit organizations which however also rely on the stability of their financial resources to keep afloat) thus, it should be the first thing that is taken into consideration when studying the benefits that innovation has to a business (Fichter, 2009). The main factor when dealing with the progress of a company is the availability of financial resources to expand as well as sustain the company. The enhancement of their profits refers to financial growth while economic stability refers to the sustainability of the company’s economic capabilities. In a company such as Toyota these essential factors cannot be achieved without the involvement of innovation due to the nature of the market (Fichter, 2009). The vehicle industry can be considered to be technology based as newer models are introduced to the market on an annual basis in a bid to increase the hold that a company has on the market in terms of sales. New technology cannot be achieved without the involvement of innovation as it is needed in order to create the new products and features that will be introduced to the market (Davila, Epstein & Shelton, 2006). Market Interest – This refers to the ability of a company to maintain the interest of its target market to enhance/maintain the level of sales. The consumer market tends to be fickle to certain products (such as cars) and look for new products whenever they are available in the market (Davila, Epstein & Shelton, 2006). Innovation in such companies is heavily required as a means of maintaining the interest of potential consumers and creating competition for rival organizations based in the same industry. Innovation brings about changes to the product that attracts new consumers as well and thus cannot be overlooked with regard to its effect on the level of interest a market may have for a product(Heyne, Boettke & Prychitko, 2010). Productivity – Another area where innovation plays an important role is the production of goods and services by a particular company(Davila, Epstein & Shelton, 2006). Innovations allow factories and industrial plants to develop ways of producing their products that may lead to lower costs and increased productivity. This in turn enhances the company’s growth as a result of the improved profit margins that arise from the increase in sales and decrease in costs (Strumsky, Lobo & Tainter, 2010). It should be noted that these innovations may not exactly deal solely with the machinery involved but could also include organizational innovations that allows for more efficient functioning of the company and its various activities. The Impact of Innovation on Advancement and Growth When considering the impact that innovation will have on a particular company in the next 15 – 20 years one can look at the impact it has already over the past few years in a bid to determine a trajectory that suits the company’s development (Fichter, 2009). With regard to the vehicle industry it can be said that innovation has played a large role in the new products that have been introduced to the market and considering the nature of this particular industry, this is a trend that is likely to continue over the years. Companies like Toyota have come up with new models that have various features such as the consumption of less fuel as well as more luxury based additions including interior design and it can be said that a continued implementation of these innovations is the foundation needed for the advancement and growth of this industry. This is especially essential in the creation of new products and features so as to maintain the customer satisfaction that will serve as the main support system of a growing consumer base (Heyne, Boettke & Prychitko, 2010). Ignoring the need for innovation will lead to a reduction of the company’s market share as rival companies will be able to attract more consumers as they continue to introduce new developments and improvements on their current products (Strumsky, Lobo & Tainter, 2010). It is projected that there should be a continued improvement on available products and as a result, a company that seems to have reached its limit in terms of innovation risks being left behind in the current and future division of market shares. References Davila, T., Epstein, M. J &Shelton, R. (2006). Making Innovation Work: How to Manage It, Measure It, and Profit from It. Upper Saddle River: Wharton School Publishing. Fichter, K. (2009). Innovation communities: The role of networks of promoters in open innovation. R&D Management 39 (4). Heyne, P., Boettke, P. J., &Prychitko, D. L. (2010).The Economic Way of Thinking. Prentice Hall. Strumsky, D.,Lobo, J. &Tainter, J. A. (2010). "Complexity and the productivity of innovation".Systems Research and Behavioral Science27 (5): 496. Read More