The Application of Innovations to Enhance Business Performance

Over the years, the need to gain a wider customer base has heightened the race to keep pace with the volatility in the current business context. This arises from the unpredictable nature of the consumer behavior owing to the many factors influencing purchasing decisions. Similarly, the days where products enjoyed lengthy spells of competitive differentiation are far gone, with the emergence of the innovative producers closing up such existing gaps. The strategic innovations in the firm’s operations are dependent on the capability of the internal resources of the enterprise. Equally, enterprise operations are influenced by elements of the external environment which the strategic management should monitor to create an interactive synergy. This would work well by fostering a dialogic medium interacting with the consumer purchasing decisions. Consequently, adopting strategic innovativeness is inevitable for enterprises seeking to expand their market share and survive the dynamic environment.

Time and again, strategic management emphasizes the philosophical saying stating that tactics without strategy is like noise before successive defeat. This mount weighty pressure for them to conduct incremental innovations in readiness of resolving the challenges emerging in the unforgiving business context. However, conducting incremental innovations in one’s products is a capital budgeting decision since a lot of resources are committed. Subsequently, strategic analysis of the potential returns is a critical stage before committing huge financing in suchinnovative programs. Concurrently, the product development and innovation should run environmental surveys to monitor and suitably track current and potential changes in the macroeconomic variables.

The focus accorded to wealth maximization has often overshadowed the need to uphold ethical concerns during innovation. In practice the two business concepts, innovations and ethical consideration exist as two concepts in the opposing flanks. However, senior management in the organization should strike the balance to secure the product’s success in the competitive environment. Adopting such an approach provides an interactive forum generating a receptive environment for the organization’s survival. With globalization influencing all tactical and strategic operations of the organizations, striking the balance between the two principles eliminate risk of environmental shocks by aligning internal structures of the enterprise to the macroeconomic changes. Many a times, the leading enterprises in each of the economic sectors emphasize such balance to reinforce their business prosperity.

In this text an analytical approach is maintained by scanning the empirical contribution of the two principles highlighted above. More emphasis is committed to understanding the impact and burden of isolating the two principles in the contemporary era of the informed consumer. In particular, a mind-set of the informed consumer assists maintain the knowledge-gap contrasting instances when the two principles are absent in the business operations.Further in the later stages, the impact of establishing a comparative advantage by sustaining a reputable image for the firm through statistical examination of the yields under a contrasted and statistical examination.Concurrently, the text presents an evaluative approach of the need to maintain a close relationship between innovation and social contingencies surrounding the enterprise.

Literature Review

Time after time, organizations seek to acquire design competencies that enable their product to create a reputation in the consumer’s mind of their ability to satisfy their requirements. Acknowledging the impact of non-technological innovation and cultural oriented creativity whilemanaging innovative designs exists as an important tool for attaining competitiveness (Thomson and Koskinen 2012, 3). In practice, establishing an innovative path for the organization revives economic prosperity despite the manifestation of endless changes in the contemporary environment. Sustaining innovations in product development cycle offer user-centered satisfaction to accomplish better solutions to the societal problems.

Traditionally, product innovation has emphasized strategic market growth with less attention accorded to the ethical concerns. This made start-up firms fail to survive the unforgiving environment where stronger incumbent would unethically drive them out of business. Nevertheless, fast-growing businesses exist as creative destructions to drive out unethical operations of the incumbent firms while accomplishing the long-term productivity (Kestenbaum 2009, 9). However, implementing incremental innovations in line with the evolutionary theory faces a set of three main challenges. Firstly, product innovations requirerefurbishment to attain consumer attention on the global stage. Similarly, enterprises need to commit to innovation systems which bring value-added benefits to the society, consumer and public sector. Here, a relationship bond with the environment will ensure the firm adheres to the ethical standards. Lastly, the firm should always seek to sustain a competent workforce that embraces environmental diversity to ensure innovations optimally fit in the market (Thomson and Koskinen 2012, 24).

Typically, the contemporary advancements of products and services trace their historical development path from innovation processes.For instance, the evolutionary theory claim that the innovation process can be viewed as an evolutionary process involving activities that generate technological changes and dynamic interaction between them (Seiffoidin, Salimi and Esfahani 2008, 43).Here, innovation operators exist as evolutionary agents creating new combinations of structuresto increase the product’s variation. Consequently, attaining a comparative advantage for the firm is determined by the potential of the firm in turning environmental ideas into differentiated products.This involves converting challenges into exploitable opportunities.

Under the Schumpeterian rent approach, economic growth owes credit to the evolutionary innovation as a destructive feature with the dynamic mechanism where old and well-known products are made obsolete following new innovations (Seiffoidin, Salimi and Esfahani 2008, 44).This highlights the nature of competitiveness generated when firms’ capabilities commit to include principal competitive advantages that demonstrate their quality products developed under new approaches. With other firms responding through imitation of the new developed approach, this replicates the death and renewal of firms and products leading to the constant cycle of innovation for the individual firms to survive the volatile market (Seiffoidin, Salimi and Esfahani 2008, 44).

Innovation involves the fundamental aspect of introducing new products in the market to compete against the presence of products developed under previous techniques. In that connection, Schumpeterian defines innovation as incorporating new production methods to introduce new and unfamiliar products to open up new markets not entered into previously, while creating a competitive structure in the industry (Laperche, Levratto and Uzunidis 2012, 187). This generates a major wave of competitive cycles with each product undergoing modifications to outstrip the rival products. In agreement, Mulgan and Albury (2003) emphasize that innovations are meant to improve efficiency and effectiveness. This backs up the standpoint provided by Schumpeter inclusion of the entrepreneurial ability to generate new mechanisms to create comparative advantages through new products.

Additionally, a technological sector expresses innovation as implementing and commercializing products with improved performances with the objective of satisfying the consumers needs better. This analytical clarity definitely calls for implementation of technological and non-technological features to create a commanding competitive advantage in the market (OECD 2009, 71).Such approach is maintained in the current forms of marketing where marketing personnel are continuously responding to changing macroeconomic elements. In practice, innovation incorporates a heterogeneous approach to keep pace with the dynamic elements. In essence, this approach iscongruent with the fact that, business fluctuations would not exist if not for the clustering of innovations around technology yielding investment bunches to commercialize innovations (Laperche, Levratto and Uzunidis 2012, 188).

Lastly, economic prosperity is dependent on dynamics emerging from opportunities arising in the sectoral and social gaps. For instance, the existence of a technological gap provides a receptive medium to source knowledge to exploit the pool of opportunities available for growth, explains the Gerschenkron’s effect on sectorial innovation dynamics (Kubielas 2009 , 1). In this perspective, sectoralcompetitiveness during the transitionperiod emphasize innovations focus on specific potential of knowledge sourcing conditions. On the other hand, Edquist recognizes that innovations exist as new creations that firms uphold as a new element or combinations of present elements (Seiffoidin, Salimi and Esfahani 2008).


In preparation of this dissertation, examination of secondary materials formed the key source of information. Ideally, periodical journals on comparative management and strategic reports were resourceful to supplement knowledge acquired during the learning process in this unit. Additionally, scholars’ findings captured in various management books and research manuscripts provided the facts on the contribution of innovation in solving challenges emerging in the dynamic environment. Further material was obtained by analyzing proceedings report such as the European design report on approaches to innovation. Lastly, strategic company reports reviewing the market observations provide a key source of comparison information. This incorporated weekly reports by the regulating authority in the security exchange markets such as the OECD micro-data Project reports.


Innovation matters in the growing enterprises and for the benefit of the economy and society. Referring to that proposition, encouraging creativity coupled with proper utilization of knowledgeable information is a critical determinant for successful organization and the economy as well. For instance, the volume of advancements wrapping the global context is a representative evidence of how mankind embraces exchange of ideas in understanding the links established between the innovation and economic performance (OECD 2009, 3). The fundamental aspect of innovation emphasizes the introduction of initiatives to assess the current position, cultivating mechanism through environmental surveys and connecting data obtained to promote innovation culture.

Inculcating a culture of innovation requires companies to strategically focus on obtaining real information on the market trends. For instance, a company that fails to monitor the effect of immigrant culture to the indigenous market may fail to recover the cost of investment in a volatile environment. Essentially, sharing an innovative vision of the companies is key to match the firm’s product to the market demands. Here, ideas exist as the propelling fuel in the innovation life-cycle (Carpenter 2010).This explains why companies such as Jacuzzi Incthrivein the competitiveenvironment through their innovative culture.

Singling out technological-oriented innovation as the ideal source of inventive designs ignores the contribution of environment-based innovation to solve upcoming encounters. However, innovation exists as a form of creative destruction to old products while generating comparative advantage of new products which drive long-term throughput. Further, this reveals the bond emerging between businesses growth and innovation activities where innovative culture bolsters the firm’s growth, demandingsubsequent innovation (Kestenbaum 2009, 3). Here, front end innovations through boardroom ideas in brainstorming sessions is a key factor to create a differentiated reputationof the firm’s products in the product market.

However, external information serves a supplementary role in provision of ideas where useful data are conceived and developed into productive concepts later transformed into marketable products (Hansen 2007, 16).Consequently, it is suitable for the product development team to strike the balance in using internally generated ideas and input provided by macroenvironment elements to design products. This enhances proper product differentiation where fuzzy ideas from data collected in the environment is transformed through a creative process to generate distinctly defined products. Through a theoretical lens, creativity has been presented as an analytical tool to foster exploitation of market gaps in the ever dynamic environment. However, in real business context firms need to scrutinize and understand the variables operating in the external environment to guarantee the success of their innovation process.

In practice, creativity and innovation bonds generate the core synergy for sustaining the firm’s competitive advantage. It follows that, organizations seeking to attain those goals should refurbish their internal resources to track the endless changes arising in the external elements. Firstly, the firm management should lay emphasis on empowerment programs to lift up ideas through employee creativity and put them into real practice through innovation(Ejaz, et al. 2011, 173). This brings up the need to motivate internal innovation channels through empowered human resources to improve organizational strategiesin solving the current nature of environment unpredictability. Such an approach is emphasized by Hopkins theme in his scholarly work, Official Guide to Success, that profits of great ideas come when you turn them into reality (Ejaz, et al. 2011, 174).

In the present globalized context, creating and sustaining differentiation is an ideal strategy for the organization’s survival. Perhaps, the ideal solution for firms to remain competitive in tracking the changing trend in the external variables is for them to adapt through the innovation paths. Organizations need to shift away from the traditional wisdom strategies to new behavior directed to solve challenging environment presence. Here, the struggle is won by incorporating creativity and innovation to accomplish strategic power in the market.However, the organization management must continuously search and interpret material information to select new idea that have commercial potential for long term survival of the organization(Ejaz, et al. 2011, 175).Here, strategic management for the search of material information through creativity in the existing human resources is essential to explore the problem and garner appropriate solutions.

Interior innovation of products is not enough to identify and solve the problems arising in the market. Therefore, the product development team must pay attention to factors identified by Martins and Terblanceh (2003) affecting the pace of generating comparative advantage during dynamic contexts. Factors identified include organizational culture, motivational environment and integrative macroeconomic variables(Ejaz, et al. 2011, 176). However, a coordinated input from the senior management is ideal through an integrative approach to avoid weakening innovations when the above mentioned factors are handled under an isolated approach.

With multinationals dominating and influencing major activities in the domestic markets, the nature of competition is ticking towards a difficult level. Worse still is the volatility in the external environment which the organization has to monitor alongside the expansion of their core competencies while solving the grand challenges. In view of that, a complete system of dealing with the volatile challenge includes all important economic,social, political, organizational, and culturalfactors that influence the development, diffusion and use of innovation-based solutions (Piperopoulos 2012, 42). This places innovations at the central focus of analyzing the present and anticipated development with an overall environmental mindset. For instance, successful firms embrace this concept into their culture by exclusively producing new knowledge and combining existing knowledge in new forms, later transforming it in products and processes that have economic significance (Piperopoulos 2012, 42).

In the contemporary global context, macro economic elements are fast developing into complex determinants of organizational performances, and so do the firms need to match the trend. In practice, conducting an incremental search for solutions to existing challenges require comparison approaches where the product features are continuously examined against the degree that consumers’ requirements are satisfied. In the volatile environment, neither can one claim that innovations establish constant solutions to the ever changing demands, nor predict the optimal course for the firm. The evolutionary process lacks optimality due to the destructive nature of innovation, emphasizing use of environmental comparisons under a benchmarking strategy to sustain firm’s competitiveness (Piperopoulos 2012, 47).

Nevertheless, innovations present a medium of accomplishing sought competitiveness and added value in the product market. Porter underlined this notion that innovation generates competitive advantage by perceiving or discovering better ways to competeand bring into the market products and services creating value to consumers and profitability to the organization (Szirmai, Naudé and Goedhuys 2011). This generatesthe contemporary role of entrepreneurship in solving environmental challenges by comparing its achievement against investment committed to innovation. Through the systematic approach advocated by Edquist, complete knowledge of existing environmental problems would not guarantee success of the organization in the environment.This is true in practice as no breakthrough has the ability to control or build on the basis of knowledge of environmental determinants as such are provisional and unpredictable in nature (Miettinen 2013, 42).

Drawing the line for the organization achievement is not easy as presented in the theoretical lens. This has arisen since what innovations solve today will not succeed in solving subsequent challenges owing to changing market demands. For that reason, the functional approach of the innovation life-cycle lacks clarity constituting new barriers to solve further challenges when other players in the market innovatively close comparative gaps. Solving challenges in the organization through innovation is a rigorous approach influenced by progressive determinants.Edquist identifies ten determinants influencing innovation: research and development, competence –building, formation of new product markets, articulation, of users’ needs, creation and change of organizations, networking around knowledge, creating and changing institutions, incubating activities, financing innovation and consultancy services(Lundvall, et al. 2009, 5).

Providing a check-list to monitor the innovation path adopted by the organization do not provide the ideal solution to deal with the endless demands in the competitive market. However, such a list ensures that firm’s innovation are not narrowly defined to benefit the organization against the well being of the society and other stakeholders. Sustaining ethical practices is a supplementary condition that the firm should seek in revamping the reputation of their brand. Consequently, it is incomplete to focus organizational achievements to profitability associated with innovations and snub ethical aspect of the process. The two go hand in hand while solving the grand challenges in the environment. In particular, innovations need to be the lifeblood of the progress individuals seek to make in protecting human health and the environment (Anastas 2011, para 1).Sustaining an open innovation approach will save the human population from injury inflicted due to unethical business practices.

Frequently, modern organizations have encompassed responsible solutions to challenges that arise in their contexts. For instance, corporate management is emphasized responsible innovations through corporate social innovation approaches (Bisgaard 2009, 4). Previously, organizations have concentrated to solve challenges through development approaches to gain a larger market share. This has changed to convert the existing business challenges into opportunities by doing good as a social innovative firm (Saul 2010, 147). A mutual dependence exists between the firm and the society since both derive benefits in the existence of each other. Companies must be aware that successful corporations need a healthy society and at the same time a healthy society needs successful companies (Michelini 2012, 1).Consequently, organizations are required to create a shared value approach to bolster relations with the society by sustaining ethical practices that will secure their future business growth paths.

Embracing social innovation through strategic planning should integrate the social perspectives when selecting what business paths to follow. In practice, corporate social innovation allows internal re-assessment of business models designed to help solve global challenges while simultaneously generating profits for the firm (Franz, Hochgerner and Howaldt 2012, 2). Social innovation presents a new outlook of solving problems which are fond of affecting the society and spilling over to misalign accomplishment of long-term objectives of the firm. In practice, the value of social entrepreneurship has eliminated the imbalance created through innovations which emphasized organizations benefits rather than the corrective well being of all stakeholders. In the cross-pollinated relationship organizations are developing solutions and creating value in ways that mainstream companies failed to do with the previous functional innovation approach (Ellis 2010, 125).


While the top management strives to accomplish long term survival of the firm through innovations, its time the organization incorporates social strategy. Although this may draw conflicting standpoints, doing good for the society will generate a competitive advantage in this era when all firms are closing all existing gaps in the market. Further, this will differentiate them from the crowd of producers. Similarly, the management should strategically apply and sustain approaches that move operations beyond competitive advancements to innovation forums that address the social needs of the dynamic environment. Here, organizations should identify with ethical practices that commit to reductions of social problems and environmental pollutions by incorporating trails of the social strategy to supplement its business strategy.


The nature of competition witnessed in the contemporary business context is raising eyebrows amongst the corporate leaders with innovative rivals closing up previous existing gaps.This exist due to the destructive nature of evolutionary innovation where present competitive advantages become obsolete with the introduction of new products. In practice, organizations require incremental innovations to sustain their competitiveness in the unforgiving environment. Consequently, organizations need to incorporate creativityand environmental-based innovations to create value approaches through social innovation. Adopting a single approach may not solve the problem since environmental conditions are changing with time. This calls for the organizations to identify with ethical innovations that commit to reductions of social problems through asocial strategy supplementingits business strategy. Under the corporate social innovation, a balance will exist between the push for wealth maximization and responsible innovations.


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