Entrepreneurs use many tools to propel their endeavors. One of the tools that many entrepreneurs use is the innovation concept. The innovation concept is the development of new disciplines and practices within the frame work of the concept. Entrepreneurs bring about innovation through opportunities that are caused by change. Technology innovation, processes innovation, service innovation and product innovation are some of the ways that the opportunities within the innovation concept can be found. Each of these ways of finding opportunities happen in different ways.
The first way in which entrepreneurs use the innovation concept is technology innovation. Technology innovation is used in production techniques. The use of technology innovation in production techniques does two important things. The first thing that is does is lower the cost of a product or make the product a better quality product for the consumer to use. When the price of a product lowers or the quality of the product is raised, the business or organization is able to surpass their competitors. When a company is able to produce a product that is better than its competitor’s products more product is sold. Therefore, the company’s profits are raised. The second thing that technology innovation does is keep the interest of current customers and possible new customers through the change made by technology innovation.
Process innovation is where change is found to make productivity more cost effective. It uses the total quality management (TQM) concept and the just-in-time supply (JIT). The TMQ concept is when an organization works together to constantly make changes that will deliver higher quality products and services to consumers. The JIT supply is a concept of not keeping any unused inventory on hand. JIT saves a company a substantial amount of money. Process innovation changes are innovations that usually use technology to reduce the occurrence of product defects that happen on the production line because of human errors. The reduction of human error on the production line cuts down on internal failure costs because less defective products have to be thrown out, less waste occurs and less downtime is experienced. Because these issues are usually caused by quality problems, process innovations that improve quality help eliminate internal failure costs.
Service innovation happens when a company changes and improves their customer service methods. This makes the company’s product more desirable to customers because they are offered better customer service. This also gives the company the opportunity to build a better relationship with their customers. Often service innovation involves getting customer feedback on how to better their customer service. Better customer service creates more customers and; therefore, more cash flow and profits are experienced by the company.
Companies find opportunities in product innovation by providing new products and services to customers. This keeps current customers interested in doing business with the company and has the potential to attract new customers. Sometimes this is done by creating new products, greatly changing an existing product or by just changing the way the current product is presented. Another form of product innovation is branding. By creating a more positive brand image a company can keep the interest of consumers.
Most people have heard the phrase “innovation is the key to industry.” While this statement may seem tired and over used, it still rings true. If businesses do not change they will not survive in a changing world. If business do not change products and services to meet customer’s need they will not have any profit. By implementing technology innovation, processes innovation, service innovation and product innovation a business can continue to grow and thrive.