Innovation can simply be defined as a new idea or a new way of doing something. It can also be called a process to think differently and find better solutions to our problems. Since hundreds of years, humans have weathered tough situations by innovating to find a solution. Discovering the way to light a fire or generating electricity were all examples of innovation. So was the invention of cars, trains and air travel. Innovation leads to a better life for everyone. For businesses, innovation is directly related to success as it provides them with something new that the competition will not have. This is also known as a competitive advantage. Strategic managers come up with their strategy to find ways of sustaining themselves by gaining a competitive advantage over the competition. Innovation is one of the priority components of a strategic plan. Strategic management professionals are often trained in their field through a global business strategy course where they learn the strategy of international business.
Strategy is about preparing for competitive advantage by choosing which industries a company should serve or what customers should it target. It is also about the allocation of resources and choosing what products or services to deliver and in which market. By achieving a unique competitive position in the market, a company can gain a competitive advantage.
Innovation helps in creating value in a business chain. It creates value by making better processes. It also creates value by reducing the cost of operations or manufacturing. Value is also created when a manager finds an innovative way of delivering goods to the market which reduces the time to market for the company, thereby gaining a competitive advantage compared to the competitors who cannot service the market as quickly. Value is created through innovating in the product design and satisfying customer needs the way they have never been satisfied by competition. Hence, innovation is the driving force behind the execution of a strategy that is successful in gaining a competitive advantage.
In order to focus the energies of the organization on innovation, the company must allow their employees to think freely. They must be allowed to talk and be heard. They must also be taught to think strategically because, without tying strategy to innovation, it might not hit the bull’s eye. Strategy linked with innovation is a recipe for competitive advantage for any organization.