Business innovation is done so as to improve on the existing services, products or processes. An idea generation should solve problems to reach new customers or serve existing customers better (Atilola, Tomko, and Linsey, 2016). An example of a business generated idea in business innovation is the introduction of the Gillette Mach3 razor which contains an innovative technology for shaving more efficiently.
The importance of business innovation in idea generation is to;
In short, business idea generation creates a higher performance leading to a higher profit in the business. Additionally, organization innovation results is a process that should lead to competitive advantage. Idea generation helps an organization to reach the strategic objectives and to grow in its capacity of building better services and products(Belton, Reardon, and Boughton, 2015).
Literature Review
The growth of international competition is associated with a striking change in the competitive position of various companies including Gillett Mach 4 – in the consumer electronics industry. Gillette has been making blades over the years. The latest improvement has seen Gillette create a business idea in which the blade Mach 4 has the best and most effective shaving outcome. The four blades are used to enhance a clean shave. It has been the best seller in the business with its competitors having minimal effect on the perception that Gillette has (El-Sayed, Dickson, and El-Naggar, 2015). Examples of other companies using generated business ideas in innovation include, IKEA, Honda, Microsoft and many more. On the contrary, the opening of international markets has allowed Honda – in the production of motorcycles, Microsoft – in the software industry and IKEA – in furniture retail to achieve success that the founders of these companies did not dare to dream about.
To understand how internationalization changes the basis of competition, we must expand our competitive advantage analysis framework to include the influence of the firm’s national environment. As we have already noted, gaining a competitive advantage can be said in the case when the internal resources and abilities of the company correspond to the key success factors in the industry. International industries are different from national sources of competitive advantage.
Methodology
This is the research processes used in the validation of the feasibility of the business idea. Questionnaires, observations and interviews are the best method to cover a research. In questionnaires, a comprehensive research in questions are listed for them to be answered by the necessary employees or stakeholders involved in idea generation. The term “comparative advantage” refers to the relative cost effectiveness in the production of various types of products. As long as currency exchange rates behave calmly (they do not deviate from the parity level of the purchasing power of currencies), the comparative advantage translates into a competitive advantage (Gereffi, and Fernandez-Stark, 2016). Therefore, a comparative advantage is reflected in trade efficiency: Positive values ??show the presence of a comparative advantage, negative values ??- the lack thereof. So, a company like Gillette has a strong comparative advantage in machine tools and shaving equipment,.
Application to idea generation and development
The theory of trade in determining comparative advantage traditionally emphasizes the role of natural resource endowment, labor supply and fixed capital. Demonstrates how the lack of natural resources is more than offset by the development of capital, education, technology, and telecommunications and transportation infrastructure (Grant, 2016). The ability to take advantage of comparative advantages based on huge investments in technology and infrastructure requires adequate market demand.
Therefore, in most capital-intensive and technology-intensive industries, large countries (such as the United States) have an advantage over small countries. Porter’s analysis is based on two basic principles: To analyze national competitiveness, we need to focus on the efficiency of the company’s operations (Jaligot, Wilson, Cheeseman, Shaker, and Stretz, 2016). Indices of the revealed comparative advantage for the widest product categories
Information and competitive advantages
Scale competition
The scale of competition has four key dimensions: The scale of the segment. A competitive advantage based on a narrow target market segment is based on the optimal setting of the value chain, which is better able to provide specific types of products, consumers or geographic regions. If the target segment is characterized by some unusual needs, competitors aimed at a wider area will not be able to satisfy them).
Vertical scope (degree of vertical integration) a company may receive potential benefits from performing many activities based on internal resources, by refusing the services of external suppliers (Lin, Hsieh, and Pai, 2017).
Value Chain Transformation
IT pervades the value chain in each of its links, changing the way in which valuable activities are performed and the nature of the links between:
Examples, The flexible computer-aided design and production systems pose serious obstacles to the threat from product. Automation of processing orders and invoices according to fighter and led to increased competition in many areas. The new technology increases the fixed costs simultaneously with replacing people with technical means. As a result, distributors must strive to increase sales. Mass production no longer matters for automation.
Competitive strategy was offered a constructive analysis of the fundamental factors of competition in industries formulated as the “five forces”. Such an approach makes it possible to discover the most important differences between industries and their evolutionary paths, and helps companies find their unique position. The book provided tools for examining the entire diversity and heterogeneity of industries and companies, providing a rigorous methodology for their research. It structured the concept of competitive advantage, expressed in terms of cost and differentiation indicators and directly related to profitability (Mudambi, and Puck, 2016). The book, which has practical value, was quickly accepted by managers who needed concrete ways to solve complex issues of strategic planning. The book also gave impetus to a new direction of economic thought. At that time, the economic theory of competition was very conditional.
There are mainly different variants of the structure and model of competition within the framework of a certain socio-economic state policy. The goal was to reduce “super profits”. Questions about how the nature of competition affects the behavior of companies or how to increase profits, economists almost did not consider. In addition, economists did not have the means to simulate competition among a small number of firms whose behavior influences other companies (Mudambi, and Puck, 2016). The Competitive Strategy defined a range of phenomena that were first subjected to a mathematical study of economists armed with new methods of game theory.
Outcomes and evaluations
How the firm can achieve the best performance compared with rivals. The sectorial structure is determined not by two, but by five forces. Competitive positions can be viewed in terms of costs, differentiation and scale. According to my theory, managers have significant opportunities to influence the industry structure and position the company in relation to others. There was a need to develop methods to make decisions in real market conditions (Rothaermel, 2015).
Having repeatedly conducted a situational analysis and obtained on this basis extensive knowledge from sales and companies, I was able to offer a more detailed approach to industry competition and introduce a certain systematization into the question. Market signals, switching costs, barriers to exit from industries, the choice between cost reduction and differentiation, between a broad strategy and a focusing strategy (XU, XU, and WANG, 2014). My approach contributed to the discovery of a new field of economic research and suggested that economists who worked in business schools go beyond teaching standard economic theories and models.
Conclusion
Innovation in a company leads to better outcomes in terms of performance and profitability. To a certain extent, everything has changed. New technologies, management methods, growing industries and government policies emerged. The emergence of an innovative business idea generation increases the value creation of the company. It increases the profits and new information. Competitive Strategy defined a range of phenomena that were first subjected to a mathematical study of economists armed with new methods of game theory.
References
Atilola, O., Tomko, M. and Linsey, J.S., 2016. The effects of representation on idea generation and design fixation: A study comparing sketches and function trees. Design studies, 42, pp.110-136.
Belton, B., Reardon, T.A. and Boughton, D., 2015. Aquaculture in transition: value chain transformation, fish and food security in Myanmar. Department of Agricultural, Food, and Resource Economics and the Department of Economics, Michigan State University.
El-Sayed, A.F.M., Dickson, M.W. and El-Naggar, G.O., 2015. Value chain analysis of the aquaculture feed sector in Egypt. Aquaculture, 437, pp.92-101.
Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Jaligot, R., Wilson, D.C., Cheeseman, C.R., Shaker, B. and Stretz, J., 2016. Applying value chain analysis to informal sector recycling: A case study of the Zabaleen. Resources, Conservation and Recycling, 114, pp.80-91.
Lin, Y.J., Hsieh, W.L. and Pai, T.Y., 2017. The Combination of SCAMPER and TRIZ for A More Effective Idea-Generation Method. International Journal of Kansei Information, 8(1), pp.19-27.
Mudambi, R. and Puck, J., 2016. A global value chain analysis of the ‘regional strategy’perspective. Journal of Management Studies, 53(6), pp.1076-1093.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
XU, H., XU, S.R. and WANG, R.Z., 2014. Internationalization transformation and innovative paths of enterprise based on embedded global value chain: case study on six international trade enterprises. Studies in Science of Science, 1, p.011.
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