Define Innovation.

Innovation is introducing new things in the economy, initiating a method of production not yet tested by experiment in the branch of research and development (R&D), identifying a product which is not familiar to the customers and exploiting a new source of raw materials or new.

What are the different sources of innovation?

According to Drucker, the 7 sources of innovation are:

1. Unexpected Successes or Failures

Whether the unforeseen, unanticipated success or failure of a product or service happens within your own firm or that of your competitor, analysis of the situation provides an opportunity for learning. Understand why it was successful, so you can build upon it or improve your own product offerings to be more competitive in the market

2. Incongruities between reality as it actually is and reality as it is assumed

If suppliers in the marketplace fail to discern this difference, then the opportunity arises for a new entrant to the market to provide an alternative that narrows this disparity and becomes more attractive to the consumer.

3. Process Needs

When looking at the process of how things are done, opportunities lie where there are ways of doing it better and the customer sees value.

4. Changes in Industry and Market Structure that catches everyone unaware

Changes in customer taste or preferences usually will prompt changes in the industry. Perceiving and understanding where customer demand is moving away from the norm and why will provide the opportunity to capitalize by introducing new products.

5. Changes in Demographics

Evaluating existing demographics or shifts in the statistical data of a given population, whether based on age, sex, race, disposable income or education, can provide opportunities for innovation

6. Changes in Perception, Mood or Meaning

This refers to changes in how customers perceive a product or service. This can be influenced by a combination of economics, a change in values, etc.

7. New Knowledge, Scientific and Unscientific

New discoveries in technology or the sciences can provide opportunities for innovation.

What is SWOT analysis?s

The point of a SWOT analysis is to develop a strong business strategy by making sure all business’s strengths and weaknesses are considered, as well as the opportunities and threats it faces in the marketplace.

S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organized list of a business’s greatest strengths, weaknesses, opportunities, and threats.

Strengths and weaknesses are internal to the company (e.g. reputation, patents, location). One can change them over time but not without some work. Opportunities and threats are external (e.g. suppliers, competitors, prices)—they are out there in the market, happening whether one likes it or not.

Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively.

How to Conduct a SWOT Analysis

To get the most complete, objective results, a SWOT analysis is best conducted by a group of people with different perspectives and stakes in a company. Management, sales, customer service, and even customers can all contribute valid insight. Moreover, the SWOT analysis process is an opportunity to bring a team together and encourage their participation in and adherence to the company’s resulting strategy.

A SWOT analysis is typically conducted using a four-square SWOT analysis table.

1. Hold a brainstorming session to identify the factors in each of the four categories2. Capture the factors you believe are relevant in each of the four areas.3. Create a final, prioritized version of your SWOT analysis, listing the factors in each category in

order from highest priority at the top to lowest priority at the bottom.

Questions to Ask During a SWOT Analysis

Strengths (internal, positive factors)

a. What do you do well?b. What internal resources do you have (e.g. knowledge, background, education, credentials,

network, reputation, or skills; capital, credit, existing customers or distribution channels, patents, or technology)?

c. What advantages do you have over your competition?d. Do you have strong research and development capabilities? Manufacturing facilities?e. What other positive aspects, internal to your business, add value or offer you a competitive

advantage?

Weaknesses (internal, negative factors)

a. What factors that are within your control detract from your ability to obtain or maintain a competitive edge?

b. What areas need improvement to accomplish your objectives or compete with your strongest competitor?

c. What does your business lack (for example, expertise or access to skills or technology)?d. Does your business have limited resources?e. Is your business in a poor location?

Opportunities (external, positive factors)

a. What opportunities exist in your market or the environment that you can benefit from?b. Is the perception of your business positive?c. Has there been recent market growth or have there been other changes in the market that

creates an opportunity?d. Is the opportunity ongoing? How critical is your timing?

Threats (external, negative factors)

a. Who are your existing or potential competitors?b. What factors beyond your control could place your business at risk?c. Are there challenges created by an unfavorable trend or development that may lead to

deteriorating revenues or profits?d. What situations might threaten your marketing efforts?e. Has there been a significant change in supplier prices or the availability of raw materials?f. What about shifts in consumer behavior, the economy, or government regulations that could

reduce your sales?g. Has a new product or technology been introduced that makes your products, equipment, or

services obsolete?

Example of a SWOT Analysis

Process of environmental analysis

Environment Analysis Process consists of scanning, monitoring, analyzing and forecasting. Environment Analysis is a dynamic process. It keeps changing depending on the situations.

1. Identifying Environment Factors: Internally, the factors include systems, internal structure, strategies followed, and culture of the organization. These are functional areas.Externally, the business interacts with the customers, competitors and suppliers; also other stakeholders such as trade unions, media, and pressure groups. Add to these the social, political, economic and technological factors also.

2. Scanning and Selecting Key Factors: Analysis is made only on the relevant factors to the company. All factors are not important and affect the company. Choosing and focusing on the relevant factors paves the way for proper environmental analysis and forecasting.

3. Defining Variables for Analysis: Variables have to be defined in any analysis. Similarly, the political situation as stable, unstable, reliability, long term effect, etc. should be measured using the variables. Economic environment should be classified into GDP, Per-capita, economic policies, etc. Variables should be compared, grouped and correlated and predicted to find the clearer picture of the broader concept.

4. Use of Different Methods, Tools and Techniques: Some methods used for analysis are Scenerio Building, Benchmarking, and Network methods.Some of the techniques used are Delphi, Brainstorming, Survey and Historical Enquiry.Analysis Tools can be statistical ones. Finance, Human Resources, and Marketing use different tools specific to their area of operation.

5. Forecasting Environmental Factors: Analyzing the past information to predict the future is the objective of this step. It is a comprehensive process to analyze the information collected by using different tools and techniques.

6. Defining Profiles: Analyzed Environmental Factors are thus recorded into profiles. Internal areas are recorded in Strategic Advantage Profile (SAP), and external areas are recorded in Environmental Threat and Opportunity Profile (ETOP). Both profiles can be combined into Strengths, Weaknesses, Opportunities and Threats (SWOT) profile.

7. Strategic Position and Report Writing: The Manager should identify the relevant environmental factors, then analyze using different tools and techniques to find out the actual situation. It is a

SWOT analysis. The manager should then choose the best alternative strategy to take the company forward.

Elements of corporate entrepreneurship strategy