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Lesson 1: Introduction to Innovation, Entrepreneurship, and Creativity
Enabling Business Strategy Through Innovation and Entrepreneurship
Innovation, entrepreneurship, and creativity are frequently viewed as overlapping and self-reinforcing concepts in the field of business. Students of innovation will benefit personally and professionally by exploring these domains in tandem, and understand the role each plays in promoting change, invention, experimentation, strategy implementation, and the maintenance and/or achievement of competitive advantage in business. Innovation is typically viewed as the set of activities that leads to the creation of better or more effective products, processes, policies, relationships, services, and beyond. To succeed, a specific innovation must address a perceived need, fulfill a desire, exploit an opportunity, fill a gap, improve something, solve a problem, or fill a niche, usually for a target audience or category of customers. In general, the goal of innovation is to create business value, solve problems, break down barriers, improve products, services, and situations, and help organizations adapt to an ever-changing environment. From a business strategy perspective, the keys to business success, supported by innovation, entrepreneurship, and innovation, usually boil down to the concepts of differentiation, competitive advantage, sustainable competitive advantage, and distinctive competencies. A quick scan of the following definitions highlights the important role innovation plays in ensuring a viable business strategy
- Differentiation: the ability of a company to set itself apart from rivals. (e.g., low-cost provider, diversification, focused strategy, narrow market niche, geographic scope of operations, etc.)
- Competitive advantage: the portfolio of resources, capabilities, and methods that gives a company competitive advantage. Competitive advantage allows a company to be profitable relative to its competitors. (e.g., ability to innovate)
- Sustainable competitive advantage: when buyers and customers prefer a company's products and services over rivals over the long term.
- Distinctive competencies: those skills, capabilities, areas of expertise, and resources that set a company apart from rivals to yield competitive advantage.