Innovation Management

The role of Innovation in achieving Competitive Advantage

The role of Innovation in achieving Competitive Advantage

Introduction

The main purpose of this paper is to create discussion on the role of innovation in gaining the competitive advantage. Modern era is an era of innovation, new technologies are emerging in the market and all businesses are adopting these new technologies. Innovation has become a very necessary factor for any organisation in order to gain the competitive edge. Taking the example of Intel, Apple and other mobile and technology companies, it is very clear to say that these companies have gained the competitive edge by adopting the innovation.

Literature Review

In order to gain the competitive edge, companies believe that innovation is the primary key. The term innovation has its derivation as the latest product creation or bringing development in the existing products. While going for the innovation, it is necessary for companies that they should bring optimisation in the product system. The company can bring innovation in its products by adopting the new technologies, and improving the research. Typically, it has observed that instead of bringing the latest techniques, companies use the traditional techniques to bring innovation in it. The concept of innovation is not new; it's been a century that the companies are going for innovation in order to gain the competitive edge. In order to gain the commercial success, the companies make a decision about the innovation management.

Several authors, experts have defined the concept of innovation, there are multiple definitions of a concept that is seemingly simple yet ambiguous, and a large majority of definitions come from the definition promulgated by the Austrian economist Schumpter innovation in which 5 cases covering the following:

1.Market introduction of a new, good or service that consumers are not yet familiar.

2.Introduction of a new production method or organizational method.

3.Creating a new source of supply of raw materials or intermediate products

4.Opening a new market in a country.

5.Implementation of a new structure in a market.

There are different companies, which adopt the strategies of brining radical innovations in its products by improving the qualified labour, machinery and production process. The companies go for adopting the innovation procedures in order to gain the competitive edge. The companies can also bring the innovation by going into a new market, and adopting mass production. Thus, it is very fair to say that innovation is techniques used for gaining the competitive edge.

The fundamental dependent variable in strategic management is performance. The focus on performance distinguishes strategic management from other branches of business administration and explains why economics has made such a lasting impact on the field (Allen, 2004, p. 127). As insightful observers of trends in business, have pointed out, however, various industries today appear to be moving away from competition based on market position and asset strength, the form of competition which economics understands so well. As the pace of global Competition has increased to the point where supply exceeds demand and as the speed of technological change has accelerated, firms are increasingly concentrating their ...