Innovation approaches that companies could gain competitive advantage.

Innovation & Competitiveness

As markets are constantly changing,
innovation and the willingness to produce new things are becoming one of the
main approaches that companies could gain competitive advantage. These changes
are driven by consumers who claim more and more, by competitions who
continuously come up with new ideas for satisfying needs and by technology
which is growing day by day. If firms do not keep up with their markets’ changes
and satisfy needs they are basically out of the competition.

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When
talking about innovation and competitiveness I think is essential to mention
the ‘blue ocean’ strategy. A clear example that shows innovation is totally
related with competitiveness is the case of Ford and the Model T. In 1908, Ford
came up with an innovative product, the Model T, and afterwards created the
automobile industry as we know it today, this creation of blue ocean brought them
huge profit and economic growth. This smart strategic move boosted the market
share of Ford to 61%. So, I want to say by using this example is that companies
should not battling competitors because they will not achieve growth and profit
and end up competing in a bloody red ocean as they fight over shrinking
profits. Therefore, a really good way to achieve progress and competitive
advantage is making the competition irrelevant by using the innovation in order
to create blue oceans.

On the other hand, only by
creating new markets or blue ocean is obviously not enough, companies should
lengthen their profits and growth by swimming as far as possible in this blue
ocean created, distancing themselves from potential imitators. Let me introduce
another famous example, Nokia. This company had an incredible history of
innovation – was the initiator in wireless infrastructures, perhaps the first
company to transform mobile phones into fashion electronic equipment and created
the first smartphone at the end of the 20th century. However, the
problem Nokia had was that they never really successfully transitioned into the
new age. Even though Nokia created a blue ocean, their success did not last and
ended up with huge losses and finally they had no more option than selling its
handset division to Microsoft. So we can see clearly that innovation doesn’t
give competiveness, but a constant innovation does.

In
my opinion, innovations can bring two types of competitiveness: technological
competitiveness, which focuses on improving performance through new products
and new markets access, and a second one is cost competitiveness, which is based
on innovation replacing human labor process and industrial technology, which
presumes a more flexible and reduced costs production.

To
conclude, innovation can help a company achieve a competitive advantage and
help the company to get bigger and stronger. As the era we live in is really progressive,
it is highly important for companies to identify moments and formulate
strategies in order to take advantage of the opportunities. The most profitable
companies at this moment are almost always the most innovative companies, this
shows how important is to think out of the box and this explains the close
relationship between the competitiveness and the need for innovation.

 

Responsibility
& Innovation

As CRS
and
innovation
has
emerged
slowly
over
the
past
decade,
they are
now the
foundation
of
business
competencies.
In my opinion, there are three ways that we can relate responsibility and
innovation.

First, organizations need to make sure
that innovations are responsibly developed and implemented; that is, that new
products or services avoid harming people and the world. We can call this
dimension the ‘responsibility to avoid harm’.

Second, in order to improve living conditions and
safeguard the Earth’s life-support system, organizations should provide
incentives to develop innovations that alleviate or reverse environmental
depletion and social misery. We can call this dimension the ‘responsibility to
do good’.

Third, it is necessary to put in place global governance
structures that facilitate the first and the second dimension of responsible innovation.
This can be named as the ‘governance-responsibility’ of organizations.

From my point of view, successful
brands
in the
future
will
be
for sure the
ones
that
see
these
challenges
as
opportunities
for
innovation
and the ones that tackle
the
issues
such
as:
social
justices,
poverty
and
climate
change.

 

Responsibility
& Competitiveness

If companies make environmental
responsibility their corporate value and publicize that value, both externally
and internally, they will be able to build solid relationships with
communities, customers, investors and regulators. And these relationships can,
in turn, give them the respect and credibility they need to successfully
negotiate issues that could be important to their company later on. If environmental
organization became an integral part of the corporation, this environmental
performance does have far-reaching implications that extend beyond the realm of
‘environment’. For example, ‘green’ companies are becoming the ones that not
only attract and retain customers, but also have a competitive edge when it
comes to recruiting and holding on to the best and brightest employees, and
therefore, the company becomes more competitive.

There
are more and more enterprises that are increasingly taking social
responsibility as a resource of competition advantage. SA8000, the
international guideline of social responsibility, is undoubtedly the important
resources to win international competitiveness. Products passing SA8000
certification have stricter moral standards in social responsibility and are of
more humanism and morality features. Here goes another clear example: in 2004,
Zhe Jiang Hai Zheng Pharmacy, integrated the concept of social responsibility
into enterprise development to implement differentiated competition strategy
and enhance core enterprises of the enterprise, and today is one of top ten
competitive listed medicine companies in China.

Compared
with competitors, the enterprises actively taking social responsibility will
have loosened supervision and better operation environment from government
policy, which undoubtedly help to enhance competitiveness of the enterprise. Therefore,
it has become clear that there is a need to become more aware of the importance
of CSR and its impact on company competitiveness in today’s highly competitive market.

After
this essay, we can see these three concepts are clearly and closely related
among them
as markets are becoming more globalized day over day.