Value of the Concept of Innovation - Essay Example

Value of the Concept of Innovation al Affiliation) Innovation encompasses change. The change may be in terms of introducing a new concept, a different one or an idea that is better than the original. Innovation ought to make a positive difference in a business organization. Research and development is the mother of innovation. Creativity directed in the production process is innovation that translates to increased revenue and profit in a business organization. To be creative, going beyond the boundaries is an inevitable move and in doing so, there is an intrinsic risk. What sets apart successful companies and their less successful competitors is their assumption about strategy (Kim, 2014). Value innovation aims at seeking new and completely different value curves. High growth companies employ an approach that offers unknown value and compete by summoning the existing conditions. For this reasons they achieve sustained high growth in both revenues and profits. On the other hand, the less successful companies take a conventional approach, that is, they strategically work towards beating their competitors. In making their competitors irrelevant, the high growth companies employ a strategic logic referred to as value innovation (Kim, 2014). Discovery of hidden demand and creation of new demands are problems that value innovations redefine. Business Canvas Model The business model canvas aids an organization in carrying out structured, solid and strategic conversations surrounding new and existing businesses. Global companies employ the canvas in the management of strategy or in creating new growth engines (Verstraete, 2011). For businesses that are starting up, the model is used in search of an appropriate business model. The business canvas model aims at helping an organization move beyond product based thinking and towards thinking based on a business model. In a bid to explain the value of the business model in discussion, Nespresso a daughter company of Nestle shall be of reference. The company utilizes the tool in their regular planning and cycles of development. It is a company affiliated with the food and beverages industry. The business canvas model is used in the creation of a blueprint of their strategy. The model provides clarity in the foundation and direction for the impending conversation. Still on strategizing, the tool is utilized for strategic planning per business unit because it provides the organization with general information on the progress of the business units. The business canvas model works as a common language across the units of the business and provides the organization with a brief view of its business model portfolio. Nespresso applied the tool in developing a business model portfolio that aided in the understanding and highlighting of the business model that earns them revenue currently and that model that will earn revenue in the future (Trapp, 2014). The use of the machine and pod technology by Nestle that is the mother company of Nespresso appropriately illustrates the business model portfolio. The daughter company was the first to apply the named technology with its tea business and Dulce Gusto by Nescafe following suit (Trapp, 2014). Beyond growth and the generation of cash, Nespresso innovative business model established the single portioned coffee that has potential synergy and cannibalization. The other named businesses utilizing the same technology differ in business models with potential synergies and cannibalization as well. Another value of the business model canvas is as a new idea template for an organization (Verstraete, 2011). The developed and submitted ideas of all types ranging from product innovation to the creation of new growth engines become comparable. The model allows for management of ideas of the different teams in the organization. The tool is used in the innovation of a concept in the organization by designing, testing and building new growth engines in that particular order (Trapp, 2014). The business canvas model yields success as a shared language across a company. The tool is helpful related across functions. Different departments in an organization work in cohesion around the model and have a common language that allows for discussion of ideas. Apart from acting as a unifying tool for conversation in a company, the canvas promotes strategic conversations therefore providing implementable outcome (Verstraete, 2011). The business canvas model values the degree that two organizations are a good fit by sketching out their business models. The organizations ought to be in the same industry. Using the business canvas model in the context of mergers and acquisitions allows for better understanding of where there are potential synergies and opportunities of cohesion and where challenges will be faced because of distinguishing factors (Trapp, 2014). The tool in discussion is of value in mergers and acquisitions regardless of the size. An example of a large acquisition is that of Clairol by P&G in the year 2001. Investments are used as a measure of growth in business. A good investment decision is core for the growth and survival of a company. The business model canvas is reliant in making improved investment decisions (Verstraete, 2011). To best allocate resources, sketching out a business model and having a good comprehension of the business opportunity is core. The tool presents business opportunities in a straightforward way and serves as direction in the manner the resources ought to be allocated. The type of business model used in organization dictates the level of success. A business model recounts the logic of what way an organization constructs, gives to the consumer and captures value from the customer. The business model canvas is graphical template outlining nine building blocks in a simple way. As a tool, it creates new business models with ease, and analyzes and updates business models that are in existence. The nine essential components of the canvas are cost structure, key partnership, customer segments, channels, value propositions, customer relationships, key activities, revenue streams and key resources (Verstraete, 2011). The main outcome of using the model is growth of a company. In using the business canvas model, an organization improves its results with the current business model as a stepping-stone. The tool is a simple way of growth for start-up as mentioned earlier. In looking into the nine components extensively of the business models, a business organization is guaranteed capturing of revenue as the end of the business model cycle. References Kim, W., & Mauborgne, R. (2014). Blue Ocean Strategy: Expanded Edition (p. 256). Harvard Business Press. Trapp, M. (2014). Realizing Business Model Innovation: A Strategic Approach for Business Unit Managers (p. 201). Springer Science & Business Media. Verstraete, T., & Jouison-Laffitte, E. (2011). A Business Model for Entrepreneurship (p. 160). Edward Elgar Publishing. Read More