There are numerous reasons why entrepreneurial organizations would seek opportunities for innovation. To better understand the reasons it should be noted that there are two main types of innovations in the business world. These types are: Process Innovations and Product Innovations. A process innovation is a plan to make an existing product or service better and a product innovation is the creation of an entirely new product. One reason an entrepreneurial organization would seek a process innovation is to elaborate on a pre-existing creation, such as a computer program, and make it perform better than before.
This can be seen in the creation of many versions of Microsoft Windows. For instance: Windows XP, Windows Vista, and Windows 7 are all process innovations. Each stage is an improvement on a previous stage and each is designed to replace the stage before it. A second reason for an entrepreneurial organization to seek a process innovation is to reduce the costs of production or labor involved in creating their product. In this case the innovation is a design that will require the company to spend less money, hopefully without compromising the quality or integrity of the product.
If for example, your product is a pizza, you may wish to make twice as many pizzas for the same price, therefore you might consider making the pizzas one inch smaller in diameter, which would in turn require less sauce and cheese per pizza, thereby increasing your number of products without increasing your costs. One reason an entrepreneurial organization might seek a product innovation is to beat the competition in the race to market new merchandise.If your company already makes cd-players and dvd-players, you would have wanted to be first in line to make blu-ray disk players. The first organization to market the new product, can be the first to build a reputation as a leading innovator in electronic products.
A second reason to seek a product innovation is to grow and expand your organization. If one product is the start of an organization, two products are even better. The more you grow and expand, the more diverse your organization can become.You can provide merchandise that no other company provides or merchandise that many other companies provide, but if you provide it all under one roof, then you have grown and expanded your merchandise list and your organization will need to grow and expand to house the required facilities and employees to continue the growth. In conclusion, four basic reasons to seek opportunities for innovation include: improving the quality of products, reducing the costs of materials or labor, beating the competition, and growth and expansion of your organization.
