Radical and Incremental Innovation and Their Application

ASSESSED SUMMATIVE ESSAY
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Summative Assessment
Radical and Incremental Innovation
Innovation is a major factor that determines the success and longevity of modern enterprises. Organizations use innovation theories in order to stay in the competition. There are different types of innovation models and theories that are used according to the business structure, and products nature. Most of the firms tried to invent a new product but they failed due to the lack of resources and capital. However, many companies developed unique products such as Google, and Apple. These firms conduct extensive market research and develop a product according to customers’ needs and expectations.
The cumulative assessment report contains an explanation of two innovation theories that are used by multinational organizations. The selected theories are the bottom of the pyramid and incremental & radical innovation. Both theories have been used by different organizations especially Google. Organizations alter strategies according to the business structure and needs. Companies encourage an innovative culture in the workplace and motivate employees to achieve their professional goals.
Features
The core features of the incremental innovation are following.
* The innovation improves features and competitiveness of existing products and services in order to increase sales and revenue.
* The innovation introduces something new without affecting the current business model (Teece and Pisano, 1997).
* A new business model can be produced while the existing model remains the same (Berson and Linton, 2005).
* The innovation assists organizations to remain competitive and develop the next generation of the product (Rerup and Feldman, 2011).
* Customers prefer to use an improved product that comes with upgraded features (Becker, 2005).
* The approach is used commonly by different companies and received positive results (Teece and Pisano, 1994).
* The theory is used for continuous improvement and development according to changing trends (Pearson, 1990).
The following are features of radical innovation.
* The main concern of the radical innovation is to explore technology for exploiting existing products and services (Ehrhart and Klein, 2001).
* The innovation gives a huge chance to win the industry becoming a pioneer in the field (Feldman and Pentland, 2003).
* During the starting stages, the pioneer company can own the whole market share (Pentland and Hærem, 2010).
* Radical innovation has a significant impact on the company and market (Nelson, 1982).
* Companies identify totally new methods of producing products and services for the benefits of the society (Hales and Tidd, 2009).
* Gives a new business model and blows up the existing one (Li and Zhang, 2007).
* The innovation alters components, the interaction components, and unites them to develop a new and unique solution (Becker and Zirpoli, 2008).
Importance
Both radical and incremental innovations have a significant importance in industry (Abernathy and William, 1978). The innovations are important because they impact the economic activities of a firm (Amabile and Schatzel, 2004). Organizations can improve their products, services, and processes to increase sales and overall profits (Drazin and Ann Glynn, 1999). Companies can identify completely new methods in order to bring innovation to the industry (Anderson and L. Tushman, 1990). Both types of innovations serve companies and market in the best possible way.
In 1986, Porter used the concept as a continuous and discontinuous development. The incremental innovation is a perilous phase of technological revolution in which the commercial worth of technically original developments is significantly improved (M. Henderson and B. Clark, 1990). The innovation was introduced so firms can change internal and external situations for mutual benefits of the company and the market (Beck and Muller-Bloch, 2017). The most common type of innovation is incremental and almost all organizations experience this innovation.
Customers have different needs and preferences so firms should conduct market analysis before developing a product or service. (Chesbrough, 2004). The application of the radical and incremental theory is important because it emphasize on creativity at global level. The theory gives a new source of innovation so companies can create a new business models by using external constraints.
The original authors used the theory to bring revolution, change the lifestyle of people, and increase revenue by providing social and commercial benefits (Christensen and Overdorf, 2002). The base of the theory is led by different authors as a business procedure that assists communities and businesses to develop something and improve economy (Ansari, 2013). The market is required to mutually benefit customers and firms (Woodman and Sawyer, 1993). Authors believe that special attention should be paid toward prices of innovative products and services because it is the main concern for customers.
Purpose
The purpose of using radical and incremental innovation is introduce an innovative product or add improve features in an existing product. Organizations use the incremental innovation because it helps firms to generate products in early stages of the product life cycle (Becker and Lazaric, 2005). The innovation involves diverse stakeholders but the company in an economy cannot attain all financial benefits from the innovation. The implementation of incremental theory is affordable because the firm has required capital and resources to bring innovation to the existing products and services (Berry and Taggart, 1994). The ideas under this innovation are easy to sell and they can be promoted in an effective manner (Keasey, 2018). Organizations remain competitive and earn profit from existing products with new features.
The radical innovation gives a chance to enter in the new market and capture more market share (Amabile, 2018). The firm can set up its own rules for sales and profits (Phillips and Noke, 2018). A significant purpose of using radical innovation is that organizations can earn more revenue with no competitors (Anderson and L. Tushman, 1991). A company should select perfect time and product to introduce in the right market segment (Pantano and Eleonora, 2015). Firms can easily capture value in new markets as compared to mature markets.
The biggest strength of the theory is that it is a unique market approach that is used by almost all companies. Organizations develop products and services according to needs, culture, and preferences of the target market (Utterback, 1996). The products are easily accessible and available due to the strong distribution channels (Granstrand and Sjolander, 1990). The innovation allows companies to serve the community in the best possible way and make difference in their lifestyles.
The innovation helps to change and reconsider the long-held ideologies, assumptions, and believes that is based on burden thinking and supporting victim such as people do not prefer the latest technology, and they do not spend money on the advanced technology (Daniel Mulinge, 2015). The theory eliminates all these wrong assumptions about customers and the market segment.
Radical innovation theory is responsible for the greatest advancements in the society and industry. Different industries have been using the theory such as power, technology, transportation, medicine, and information (Gibson and Birkinshaw, 2004). However, the research found that it is a long-term process that proves that the innovation is never used for disadvantage of the society. There is a need to accelerate innovation so political and economic changes can occur within the given time frame. Many multinational firms are working on ongoing projects to bring innovation in different fields. (Abdul Halim, 2017). Following company has applied Radical Innovation and Incremental Innovation to facilitate its consumers in the best possible manner.
Analysis of Incremental and Radical Innovation
There are two approaches to innovation that are used by organizations such as radical innovation and incremental innovation as shown in appendix 1. A disruptive or radical innovation has an important impact on the economic activity of the company in a target market segment. However, incremental revolution means the company makes improvement or upgradation in an existing service, product, method, organization, or process. It is the leading form of innovation that affects companies on a large scale (Narayanan, 2001). The rate of technological change and the nature of innovation can be different from one industry to another.
During 1970s, the theory was emerged and the concept has been used by many authors. They have the used diverse terminology but articulated the same meaning. There are two dimensions that are used to differentiate both radical and incremental theories such as internal and external ones (Engen and Elisabeth Holen, 2014). In the internal dimension, the incremental innovation is based on existing resources and knowledge in a specific company (Scott and Bruce, 2018). However, the radical innovation requires completely new information and resources.
The second dimension is external that differentiates the revolution on the basis of the technological variations and its influence on competitiveness in the market. The innovation contains improvements and modest technological changes in the existing products that are available in the market (Motwani and Dandridge, 2018). However, radical innovation involves technological changes at a large scale. The existing product is considered obsolete and non-competitive.
Application of Incremental and Radical Innovation
Different organizations have used radical and incremental innovation models to bring change in the industry (F. Suarez, 2018). Firms make small improvements and changes in their existing products (Chesbrough, 2003). The objective of the incremental change is to improve performance and develop the efficiency of a product and service (B. Roberts, 2007). Many companies use both approaches, for instance, the radical theory is used to develop innovative products and incremental theory is used to add improvements and features in the product (Trokoudes, 2017). Some companies uses both incremental and radical theories to bring change in the industry.
The proper application of radical and incremental theory benefits organizations to increase revenue by launching creative products in the market (Dodgson and Gann, 2010). As per (Ettlie, 2006), the innovation assists companies to identify needs of the community and develop understanding about the distribution channels. Firms collect and use customer information for both incremental and radical innovation. Companies face challenges in developing and creating balance in the kind of skills that are required to bring innovation in the industry.
If multinational companies work with local government to create new products and business models then firms can achieve benefits (Chi Kuo and Hanaf, 2016). Different organizations apply the theory as a business model in order to become successful in the industry (Bessant and Tidd, 2015).
Organizations have an opportunity to increase the market share by serving more communities (Christensen, 2002). The theory focuses on uniqueness as innovators and business partners as compared to just consumers and producers (Simanis, 2014). According to (Clayton and Michael, 2003) firms adopt creative and exclusive business models for community and organizational benefits.
Google
Google is an American international corporation that offers internet related services and products. Approximately, 1 billion people use different services of Google on the daily basis. The company adopts different strategies to serve its customers at global level. The objective of the firm is to organize global information and make it assessable for everyone. The company used the incremental innovation theory and designed the Google’s Gmail service (Google, 2018). It is the world’s most popular email service. When the service was launched, it contained a few features, but it quickly delivered emails without ads (Rafferty and Griffin, 2004). With the passage of time, Google improved the service by adding many features.
The firm has used the incremental innovation so many times and created Google Internet Browser and Google Map (West and Borrill, 2003). The company introduces simple products in the market than make gradual changes in them (Atuahene Gima and Li, 2001). The innovation has multiple benefits and disadvantages so it should be used with a careful analysis (Christensen, 1997). Many organizations follow this track and improve their products continuously.
The example of the radical change is that Google introduced Google Glass. The unique idea is presented and implemented by the company with the intention to produce a universal computer (Keller, 1992). The glass resembles a normal pair of glasses but the lenses are replaced by a head-up display (Thorpe, 2010). The device controls voice and displays information directly in the user’s field of vision. This innovation is beneficial and the company is a pioneer in the field.
The company offers some products to upper-class society so lower class people cannot buy and use them. Google’s Chromebook are reliable and high quality machines but most of the people cannot afford its laptops. The company can increase the market share by offering mid-range and low-range products. Google can enter into the market of underdeveloped countries...