Effects of Product Innovation on Firm Growth

Introduction

Aside from the managerial strategies and efforts of the leaders, the use of technologies and ideas of innovation also emerged in the market. With the help of the applied researches and developments done in order to explore the other possibilities and achieve the total growth and profitability of the firm. In addition, due to the constraints and challenges presented in the globalization of market, the organizations are seeking more attractive way to maintain the customer relationship and the profitability.

Background and Problem Statement

Product innovation is one of the most desirable strategies implemented in the competitive arena. Both domestic and international organizations are allowed to manage the product innovation to remain competitive in the market. Other studies regarding the product innovation supported the idea that there is a link or relationship exists between the innovation and corporate performance. Based on the investigation, there are factors that affect the profitability of an organization and that would be based on the market share, value, and growth of sales and productivity. However, all of these factors are identified to be just the results of the innovation. Therefore, what would be the impact or effects of product innovation in the aim of the firm towards total growth?

Research Aim and Objectives

The main aim of the study is to investigate the outcome or effects of product innovation in achieving the growth of the firm. In order to capture the necessary information, there are four objectives that need to be satisfied. First is to understanding the process involved in the product innovation. Second is to review the organizations that successfully integrated the product innovation towards achieving their corporate objectives and be effective in the market. Third is to identify the level of research and development that must employ in fostering the product innovation. And fourth is to measure the effectiveness of innovation even in a congested or saturated market.

Literature Review

The growth in the research and development as propelled by many organizations is said to be the start of product innovation. Aside from market surveys, the products are also tested in the reports that originated from the customers’ preferences serve as the most effective source of information to enhance the product. The best applied method in product development is through exploiting the other ideas and concentrating on the requirements of the customers. Overall, the product innovation, when commercialized, can create a positive effect in terms of the corporate revenues. In this way, the organizations are continuously implementing the R&D in their organization to manage the product innovation which can increase their revenues up to the next coming years (Corsino, 2009). The evidences based from the innovation activities and the different effects of process and product innovations on productivity and productivity growth are part of the areas in which the R&D can be used. The firm can base their assumptions in revenue growth through the productivity and quality of the variety produced. Growth is driven by the combination of product innovation and effective entry in the market. However, the selection of product that needs to be innovated and processed is expected to be characterized in optimal pricing. In this case, the market became unpredictable and if the firm subjects the price higher than the competitor there is no assurance that the people will stay and patronize their products (Fasil, 2009). However, because of the opportunity of some firms to use their technologies and make a profit out of it, innovation of the products can be easier. Still, in the end, the acquisition or purchase of the market are the bases to say that the product is effective in the market. Furthermore, if there is an increase trend in continuous profitability, the product innovation can be assessed as part of the internal development of the firms. There is no doubt that the funds and technology are important aspect of innovation. The performance of the people and the employed technological system can significantly improve the development of a product. All in all, the firm growth can be duly achieved in the event where the firms successfully combined the product and process innovation (Nås & Leppälahti , 1997; Goedhuy & Veugelers, 2008).

Methodology

The applied method in the study is the use of case studies that focuses in the product innovation. The business case studies can be an effective source of information especially in identifying the gaps in the literature. Also, it is an advantage for the study to use the case studies because of the involvement of the contemporary approaches of the management like the total quality management (TQM) and others.

References:

Corsino, M., (2009) Product Innovation and Firm Growth: Evidence from the Integrated Circuits Industry [Online] Available at: http://www.cide.info/conf/2009/iceee2009_submission_51.pdf [Accessed 17 September 2010]

Fasil, C.B., (2009) Product and Process Innovation in a Growth Model of Firm Selection [Online] Available at: http://smye2009.org/file/173_BenedettiFasil.pdf [Accessed 17 September 2010].

Goedhuy, M., & Veugelers, R., (2008) Innovation Strategies, Process and Product Innovations and Growth: Firm-Level Evidence from Brazil [Online] Available at: https://lirias.kuleuven.be/bitstream/123456789/213809/1/MSI_0809.pdf [Accessed 17 September 2010]

Nås, S.O., & Leppälahti , A., (1997) Innovation, Firm profitability and Growth [Online] Available at: http://www.step.no/reports/Y1997/0197.pdf [Accessed 17 September 2010].

Strategic Management of Technology & Innovation

Introduction

Gadgets are already in the hands of the young population, whether teenagers or working people. Name it all, it seems that the entire population are all oriented about the new system and attached to the technologies. Through the use of the technologies and (if someone is lucky enough) is also affordable, people can find simple ways from communicating to sharing the information. Apparently, with only a decade, it seems like each and every country are tied and wrapped on the effectiveness of the technologies and the promising benefits laid by the continuous innovation.

Managing Technology

The global competitive strategies are continuously increasing towards the technology-driven which is also extremely dynamic, in high-velocity, and in turbulent environment. For such, the rapid technological changes are also described to be very risky. In the area of managing the technology and innovation, the people or rather the managers are used to be advised by the management of technology to get a grip on better understanding particularly on the type of technology they handling. Understanding the details of the technology will surely provides the better implementation and fostering the development. One must learn to control the impact of the technology in different functions such as the marketing, finance division, or in human resource department. From the introduction of the technology and innovation in the industry, there is a strong indication of management provided by the influence manufactured in the engineering-based disciplines. The field of technological assets is entirely based focused on the research and development management and with that implication; the economists aided the analysis to support the policies that can be associated with the technology according to the type of industry, size or country (Chanaron and Jolly, 1999).

In the place of the technological management, there is a sudden shift in the response of the economy and the openness of the country towards the growth theory and productivity. The technological investments and knowledge can definitely be the source of the strategic competitive advantage to a firm. The technological competencies that are needed can be in a form of operation by the matters of cost-efficiency methods, technological diversity, operational efficiency, product and process management, and other strategic alliances that can be possible (Liyanage and Poon, 2003).

Successful Technological Market

Innovations had been the key role in the growth of the industries and intensify the competition of the strategies among the firms. Together, the technology and the innovation can be the essential tool to stimulate the growth and enables the firms to master the competition provided by the globalization. As to say, the critical factors that might involve in the technological innovativeness of an organization are through the continuous support of the entire team in sustaining their strategy. All the development based on the globalized innovation created a path towards the changes and challenges (Tiwari, Buse, and Herstatt, 2007). It seems that, the only firm left standing in the innovation can be the successful firm. This case can be traced through their systematic steps, analysis to idea generation, evaluation and selection, project planning, and product development just to answer the critical phases of innovation process. Specifically, the technology and innovation itself and its management are already regarded as the critical area within the organization. And the effective management is a good techno-managerial approach when it is combined with the management theories and principles and the technology management practice (Liyanage and Poon, 2003).

Role of the Technology and its Development

The increase shift and focus on the business competition provided by the technology is a great indication that the role of the technology within an organization placed into a higher level. The competitive advantage of an organization can be earned not only through the use of the technologies but also being open towards the industrialization, because the innovation-driven can be a disadvantage for the low-cost producers from the emerging markets. However, there is still a place for the so-called global innovation outlook when applied to the information technology (Tiwari, Buse, and Herstatt, 2007). The approach of the firms on the technological management can be the mainstream of the research and development towards the success of the firm (Chanaron and Jolly, 1999).

Conclusion

Technology nowadays can be easily managed because of the easy accessibility and more defined features that are offers to the market and to the potential users. Technologies, such as the computers and the information system, and the innovation can be easily organized and handle according to the situation and the level of the performance needed. For example, different areas are now equipped with special kind of technology and innovation such as the corporate sector or in accounting department, health care settings, and even in education. Technologies are now considered to be the driver for change.

References:

Chanaron, J., & Jolly, D., (1999) “Technological Management: Expanding the Perspective of Management of Technology”, Management Decision, Vol. 37, No. 8.

Liyanage, S., & Poon, P.S., (2003) “Technology and Innovation Management Learning in the Knowledge Economy – A Techno-Managerial Approach”, Journal of Management Development, Vol. 22, No. 7

Tiwari, R., Buse, S., & Herstatt, C., (2007) “Innovation via Global Route: Proposing a Reference Model for Chances and Challenges of Global Innovation Processes”, Research Project Global Innovation-Institute of Technology and Innovation Management, Accessed 08 June 2010, from http://www.tu-harburg.de/tim/downloads/arbeitspapiere/Working_Paper_49.pdf

Innovation, Organizational Capabilities and the Born-Global Firm

Title of the Article: Innovation, Organizational Capabilities and the Born-Global Firm.

Authors: S. Tamar Cavusgil and Gary A. Knight

Source: Journal of International Business Studies, vol. 35, no. 2, pp. 124+. (Online publication – January 8, 2004)

Brief Summary: This article is an empirical investigation of ‘born-global firms’ on the concept of innovation, knowledge and capabilities on the strategy and performance of the firm through exploratory case study (formulation of hypotheses) and survey method. It pertains to the linking of innovation to the phenomenon of early adoption of internationalization. ‘Born-global firms’, also known as international new ventures or global start-ups, are companies that operate globally from an early stage of development wherein they adopt the process of internationalization. Results from the firms involved in the study affirmed the role of innovation in the development of various types of knowledge that will lead to development of organizational capabilities that will support early internationalization and performance of the firm. The results are also supported by the evolutionary economics framework (Nelson and Winter, 1982). Since born-global businesses are young and scarce in financial, human, and tangible resources, innovative activities give rise to internationalization. Among the firms involved in the study, youth and lack of experience, as well as scarcity of financial, human, and tangible resources are no longer major impediments to the large-scale internationalization and global success of the firm. This article also provides discussion on technological competence, unique product development, quality focus, logistics management, and superior performance in the international market.

Reflection of Thoughts:

The continuous and dynamic competition in the global business arena has been very stiff and complex in these recent times. In this regard, firms must be able to utilize a strategy and management system that will enhance the performance of the business so as to outgrow its rivals. Innovation is a basic and crucial attribute of international businesses. Most successful global firms hold the ability to innovate and come up with something that is beneficial for the whole setup of the business. The progression of ideas and innovations has been rapidly apparent, whereas different firms have to cultivate ideas that can meet the demands of the market and the target market. In the process of innovation, international business should set objectives, formulate and implement strategies based on the principles of management, and supported by essential factors such as technology and development of intellectual capital. However, innovation in international marketing will not stand alone if not integrated with core competencies, resource-based, and competitive advantages.

Today, various firms – domestic or international in nature, are aiming for competitive advantage and sustainable development among its management and operations. With this, there are numerous actions that are being implemented and directed to the eventual success and growth of the firm’s assets. In competition, there is motivation in every firm to improve and develop generally. For firms to succeed in local or global competition and operations there is a continuous plan to develop management and marketing techniques such as strategy, change and innovation of new products/services with higher quality than its competitors, efficient management of critical success factors, and others.

Reference

Cavusgil, S. T. & Knight, G. A. (2004) Innovation, Organizational Capabilities and the Born-Global Firm. Journal of International Business Studies, 35(2); pp. 124+.