CS-803 Assignment No-1: Q. Explain Innovation and Its Classification

CS-803
Assignment No-1
Q. Explain Innovation and its Classification .
Ans INNOVATION
The term innovation is very versatile and is frequently inflated. A clear definition of the
term is important for a clear, common understanding in companies. To this end, there
are various types of innovation with regard to the object of innovation and the degree of
innovation. This knowledge of classification is necessary for innovation management.
What is the purpose of types of innovation?
Why do we deal with types of innovation? From the point of view of innovation
management, the types of innovation and thus the classification of innovation have a
strategic and process-related significance.
A clear definition of the desired innovation object and degree of innovation is important
for the innovation strategy. This determines where an organization wants to innovate.
The classification is also relevant for the innovation process, since the different types of
innovation have different requirements for the innovation process. A radical innovation
requires a more comprehensive process with different decision-making structures than
a small incremental innovation.
The first classification is thus the object of innovation.
Product innovation: Products concern both material products and intangible services
such as services that meet customer needs and are thus acquired by the customer.
With product innovations, a company earns its money and tries to differentiate itself
from the competition.
Service innovation: service innovations are like product innovations when it comes to
selling them directly to the customer, e. g. insurance or management consultancy. Even
if services are not actively sold, as in the case of manufacturing companies, each
company still provides services to its customers, for example in logistics, complaints,
sales advice, etc., even if they are not actively sold. This is also where innovation
comes in when it comes to differentiation and customer enthusiasm.
Business model innovation: The business model is the way a company functions and
earns money. The business model innovation encompasses innovations in strategy,
marketing, supply chains, value creation, pricing or cost structures.
Process and technology innovation: As the name implies, these are technological
innovations, such as the creation of products and services. In principle, they are also
process innovations. These include, for example, production processes or IT
technologies for apps. Product innovations, quality improvements or cost savings often
go hand in hand with process and technology innovations.
Organizational innovation: Organizational innovations affect the process and

organizational structure. These can be organizational process innovations or
management innovations, e. g. new tools for measuring customer satisfaction or
optimizing delivery processes to reduce costs.
Social innovation: Social innovations are innovations where the benefit lies with
society and the purpose is not primarily profit. Examples include innovation in
education, poverty reduction, equal opportunities and health.
Environmental innovation: All innovations that contribute to improving the

environment are environmental innovations. This concerns for example environmentally
friendly products, contributions to environmental protection or the avoidance of
emissions.
Q 2. Relationship Between Innovation And Entrepreneurship
Ans- Innovation means introducing something new. This can be an idea, product,
model, process, or a service. For example, introducing a new equipment that can
reduce the electricity consumption by some percentage is an innovation. Innovations
need creativity and new thinking. Innovation always does not mean invention.
Innovation can create change and add values to the existing product or a service.
The sources of innovation are economic changes, technological changes, new
knowledge, new markets, etc. These things make a person think of a new product,
services or business process. Innovation help organizations to be strong and be
competitive in the industry. There is no risk involved in innovation.
Entrepreneurship is making great ideas into a business opportunity by taking a risk.

Entrepreneurship understands the business opportunity for the great ideas innovated
and adds a tangible value to the innovation. Entrepreneurs always search for innovation
sources and they do not restrict themselves for one type of innovation. Entrepreneurs
set up business on the opportunity identified and run it profitably. They need skills
like planning, decision making, managing, leading, motivating and risk taking.
Successful entrepreneurship is always a result of hardworking, commitment, and risk
taking.
the difference between Innovation and Entrepreneurship?

Although there is a link between innovation and entrepreneurship, they have a different
meaning altogether. Following are the major differences between the two concepts.
Definitions of Innovation and Entrepreneurship:
Innovation: Innovation is creating something new; it always doesn’t create a business
opportunity.
Entrepreneurship: Entrepreneurship identifies the opportunities in great innovations
and creates opportunity, add values and keep the value improving over a period of time.
Q.3 Explain Models of Innovation
 Ans- First-Generation Innovation Model (1G) – Technology Push
Technology push in the first Innovation model is the result of rapid economic growth
from 1950. Nasa developed this as a management tool in the 1960s. They also termed
it as ‘Phase-review-processes’.
The idea was to break down complex processes of space projects. It focused on
systemizing the work and gaining control over activities.
The Phase-review-processes implies consistent monitoring of each phase. Thus
forming a linear sequential process. It focused on pushing technological innovation
through extensive research & development.

It was applied at the stage of product research, its engineering, manufacturing &
marketing to invent a successful product. As the entire focus was on the development of
ideas- it ignored the marketing phase.

The complete emphasis on R&D had a disadvantage of not considering customer
feedback and expectations. Thus, the innovations would often get ignored in the
market.

 Second-Generation Innovation Model (2G)– Market Pull

In the 1960s mid, the approach shifted from Technological push to Market pull. The
focus began on responding to market needs. Factors ignored during the first generation
are considered now in the second generation.

It includes- the cost-benefit analysis of each project & systematic allocation of
resources.

The process is similar or sequentially linear but emphasized on market needs. Thus
reducing the research time.

As the market needs are dynamic, the projects would last for a shortfor short period.
Hence, resulting in numerous small projects.

 Third-Generation Innovation Model (3G) – Coupling Method.
The third-generation model overcomes the limitations of the previous two linear models.

It gained prominent acceptance during the inflation and stagflation phase of the
economy.

It tightly combined R&D and Marketing. The innovators coupled technological innovation
with market needs. The model was based on the balanced coupling of Technology Pull
and Market Push.

The core driving factor was reducing the operational costs during the contraction stage
of the economy. So, the process formed a non-linear feedback loop. But the stages in
the process made the model sequential.

 Fourth-Generation Innovation Model (4G) – Integrated Model

The fourth-generation model follows an integrated model for the business process. It
moved away from the sequential process to follow the parallel process.
A parallel approach is followed in development, internal company communication, key
suppliers at upwards, and customers at downwards.

 Fifth-Generation Innovation Model(5G) – Network Model
The network model focused on the effective distribution of network processes. It

emphasized on gaining flexibility and increasing the development speed.

The 5G model has integrated network systems to consolidate external and internal
factors. Therefore, the model considers the external inputs of suppliers, customers,
competitors, government, etc.

Thus gaining market competitiveness in time of rapid technological changes and shorter
product cycles.

The Integrated and network model intensifies the fact that technological innovation is
cross-functional & multi-factor but not sequential.

 Sixth-Generation Innovation Model (6G) – Open Innovation Model

As Chesbrough defines, “Open innovation is the use of purposeful inflows and outflows
of knowledge to accelerate innovation internally while also expanding the markets for
the external use of innovation.”

It looks out for technological advancements by combining internal and external ideas.
The funnel representation shows- Initiating with a large pool of ideas to narrow down
later at the best choice of the idea.

Q4. Explain Product Innovation
Ans- Product innovation is the creation and subsequent introduction of

a good or service that is either new, or an improved version of previous goods or
services. This is broader than the normally accepted definition of innovation that
includes the invention of new products which, in this context, are still considered
innovative.
Product innovation is defined as:
the development of new products, changes in design of established products, or use of
new materials or components in the manufacture of established products
Numerous examples of product innovation include introducing new products, enhanced
quality and improving its overall performance. Product innovation, alongside cost-cutting
innovation and process innovation, are three different classifications of innovation which
aim to develop a company's production methods.
Thus product innovation can be divided into two categories of innovation: radical
innovation which aims at developing a new product, and incremental innovation which
aims at improving existing products.
Q5. Explain Marketing Innovation
Ans- A marketing innovation is the implementation of a new marketing method

involving significant changes in product design or packaging, product placement,
product promotion or pricing.
Marketing innovations are aimed at better addressing customer needs, opening up new
markets, or newly positioning a firm’s product on the market, with the objective of
increasing the firm’s sales.
The distinguishing feature of a marketing innovation compared to other changes in a

firm's marketing instruments is the implementation of a marketing method not previously
used by the firm. It must be part of a new marketing concept or strategy that represents
a significant departure from the firm’s existing marketing methods. The new marketing
method can either be developed by the innovating firm or adopted from other firms or
organisations. New marketing methods can be implemented for both new and existing
products.
Marketing innovation refers to the creation and launch of new products and services.
It brings together the expertise areas of market research and marketing planning with
operational management and financial planning.
Most businesses see marketing innovation as an opportunity to find new ways to grow
their business. As the needs of target audiences evolve, marketing innovation plays an
important role for business to :-
 Identify growth opportunities.

 Set up efficient processes to create and launch new products.
 Manage the launch and post-launch marketing plan.

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CS-803

Q. Explain Innovation and its Classification .

The first classification is thus the object of innovation.

Organizational innovation: Organizational innovations affect the process and

Environmental innovation: All innovations that contribute to improving the

Q 2. Relationship Between Innovation And Entrepreneurship

Entrepreneurship is making great ideas into a business opportunity by taking a risk.

the difference between Innovation and Entrepreneurship?

Q.3 Explain Models of Innovation

 Ans- First-Generation Innovation Model (1G) – Technology Push

 Second-Generation Innovation Model (2G)– Market Pull

 Third-Generation Innovation Model (3G) – Coupling Method.

The third-generation model overcomes the limitations of the previous two linear models.

 Fourth-Generation Innovation Model (4G) – Integrated Model

 Fifth-Generation Innovation Model(5G) – Network Model

The network model focused on the effective distribution of network processes. It

 Sixth-Generation Innovation Model (6G) – Open Innovation Model

Q4. Explain Product Innovation

Ans- Product innovation is the creation and subsequent introduction of

Q5. Explain Marketing Innovation

Ans- A marketing innovation is the implementation of a new marketing method

The distinguishing feature of a marketing innovation compared to other changes in a

 Identify growth opportunities.

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