The paper "Innovation Is Essential in Business Today " is a good example of marketing coursework. The term innovation has been defined as the process of creating a new thing or changing an existing thing to appear different from the original thing (Shukla, 2011). In the contemporary business environment, innovation can, therefore, be defined as the process of creativity through which a new product or service is introduced into the market. It can also be viewed as the process through which an existing product or service is changed in order to appear different from the original product or service. The increasing cut-throat competition in the contemporary business environment has more than ever fuelled the need for innovation as companies strive to beat each other in the market place.
For example, the iPod developed by Apple Inc. was an innovation that saw a new portable product introduced in the marketplace which replaced the Sony Walkman which was the only portable technology for playing music that exists in the marketplace (Shukla, 2011). In this regard, the innovation by Apple Inc. replaced Sonny Walkman in the market. It is imperative to note that the essence of innovation is to increase the competitive advantage of the company’ s products and services as compared to the products and services offered by the competitors in the marketplace.
It is vital to mention that economists focus on two aspects of innovation that include process and product as will be explored in the subsequent section. The purpose of this paper is to explore the reason why innovation is essential in business today and its implication for marketing managers. Discussion Economically, innovation is based on two aspects that include service and product innovation (Heyne, Boettke and Prychitko, 2010).
Service innovation is defined as a new process through which services or goods are delivered or made. For example, touching a screen instead of informing the receptionist that you have arrived to see the doctor is an innovation which shows that a new service is delivered differently. Product innovation is defined as the process of improving the quality of the products already on offer in the market by introducing a new product that functions better than that already in the market. Product innovation has been the most popular aspect of many businesses today.
As stated above, the iPod was a product innovation that improved the quality of portable music tools such as Sony Walkman (Heyne, Boettke and Prychitko, 2010). The packaging of coffee in portable cups/tins by MacDonald restaurant is another example of product innovation in the coffee retail industry. Innovation adds value to the firm’ s services or products which makes the products more desirable for consumption by the consumers. Porter’ s five forces theory holds that a firm operates in an environment characterised by; entry of new firms or competitors, the threat of substitute goods and services, increased bargaining power of the buyers, increased bargaining power of the suppliers and increased rivalry among the existing competitors (Porters, 1998).
The most important elements in Porter’ s five forces theory applicable in this paper include the entry of new competitors in the market, increased rivalry among the existing firms in the market and the threat of substitutes.
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