Introduction
In the business world today, organizations aim at gaining a competitive edge against their competitors. In so doing, organizations are pursuing all the possible avenues that would ensure the achievement of the desired edge in business. The goal is to make the organization the most preferred by the consumers and the other stakeholders, such as financials and donors as the case maybe (Zaltman, Duncan and Holbek, 1973).
In doing this, organizations then turn their efforts in managing innovation and entrepreneurship. Here, organizations aim at formulating innovation strategy. Formulation of innovation strategy is closely related to value innovation concept.
On the other hand, value innovation is unique to each organization as each organization formulates its value innovation concept according to its line of specialty. Of worthy, to note here is that value innovation concept is aimed by the organization at improving its production capacity and quality (Kleinknecht, 1996). To this end, therefore we need to understand the meaning of the whole concept of value innovation in an organization.
In addition, how an organization can use value innovation in formulating its innovation strategy (European Commission, 1995). In order to understand the concept of value innovation, the world innovation will refer to any activity done on an object or a phenomenon aimed at improving the appearance or the overall product of the same object or a situation aimed at getting more output in terms of quality and quantity.
In other words, innovation in the business world will insinuate all activities done in the organization aimed at achieving renewal or improvement of the organization’s production processes. If then this is so about innovation, the concept of value innovation will imply the improvement of the organization efficiency.
This will be through for example, the people engaged in the production process changing their thought system in all matters pertaining the working of the organization. These too will include changes in the way decisions are made and making choices out of the ordinary (Porter and Stern, 2002).
In business economics and entrepreneurship, the concept value innovation is often associated with the output of the process. Value innovation therefore comes to be understood as the adoption of any idea aimed at being transformed into something useful.
An organization aiming at applying the concept of value innovation in its production then aims at not at staying ahead of the competitors, but reducing the cost structure. The saved cost is then passed over as benefits to the customer. Here, the organization achieves a competitive edge by producing for the costumers what the competitors do not.
We then come to find out that organizations consider the whole concept of value innovation as important in improving the existing product or service or creating a new one altogether (Kleinknecht, 1996). In improving their efficiency in the production line, organizations have come to appreciate the role value innovation plays in their success or failure.
This is done with the understanding that innovation is the key to success in economy. The application of value innovation should be done through out the production lifecycle. That is from development to delivery (Porter and Stern, 2002).
Formulating Value Innovation Strategy
In formulating a value innovation strategy using the value innovation concept, an organization should align its innovation on the inclusive corporate strategy. Instead of only formulating marketing and sales strategies, organizations too need to come up with value innovation strategies. The strategy mentioned here should be reflective of the organization involved.
The innovation strategy should be reflective of the challenges as seen here below. These should include being able to put sustainability first, be able to care for a growing world and be able to create new technologies. In achieving the above, an organization will then need to align itself with the core values of value innovation. These are being responsible in its production process, being able to innovate continuously and being able to think ahead.
If then an organization is to come up with an effective value innovative strategy, it will then need to come up and test new possibilities. This could involve for example, a project that does little harm to the environment.
Illustration
With an effective innovation strategy in place, the organization can then aim at using it in achieving a competitive edge against its competitors. This is possible by producing what the competitors does not. The value innovation strategy formulated using the innovation concept can then be used by the organization in the following ways. That is by identifying the intellectual assents in the organization.
These intellectual assets if identified then become the pillar of the organization. They could include staff expertise, market intelligence, and trade secrets. The knowledge of ones organization can then be used for example to provide the customers after sale services. This then becomes an innovative way of ensuring customer retention.
Innovation strategy can also be applied in coming up with the best value chain. Value chain here will mean the production process in terms of demand and supply. An effective innovation strategy will enable the organization to realize that each element in the chain provides a chance for the organization to develop its production process.
In concluding this discussion therefore, we find that every organization wishing to achieve a competitive edge against its competitors must aim at coming up with an effective innovation strategy. This will then enable it to produce goods or services that the other organizations do not have. Moreover, it is not merely staying ahead.
Reference List
European Commission. (1995) Green Paper on Innovation. Brussels: European Commission.
Kleinknecht, A. (1996) Determinants of Innovation. The Message from New Indicators. New York: St Martin’s Press.
Porter, M. E. & Stern, S. (2002) ‘National Innovative Capacity’ in Global Competitiveness Report 2001-2002. New York: Oxford University Press.
Zaltman, G., Duncan, R. & Holbek, J. (1973) Innovations and Organizations. New York: John Wiley & Sons.