Samara University

College of Business and Economics

Department of Management

Innovation management and Entrepreneurship

Haftom Welegebriel
(MBA - Specialization of Entrepreneurship)
2024/ 2025 - Academic Year
Chapter: 1

Innovation
imperatives
1.1. Innovation matters
• Absolutely, innovation is crucial in today's rapidly changing
world. It drives economic growth, enhances competitiveness,
and addresses social and environmental challenges.
• Here are a few reasons why innovation matters:

 Economic Growth: Innovations create new markets and

opportunities, leading to job creation and increased
productivity.
 Problem-Solving: Many of today's biggest challenges, such as
climate change, healthcare, and resource scarcity, require
innovative solutions.
 Competitiveness: In a globalized economy, innovation
helps businesses stay ahead of the competition by
improving processes, products, and services.
 Quality of Life: Innovative technologies improve our
daily lives, from advancements in communication to
healthcare breakthroughs.
 Sustainability: Innovation in clean technologies and
sustainable practices is essential for developing a more
sustainable future.
Definitions of Innovation
• The word innovate comes from the Latin innovatus,
where “in” means “into” and “novatus” is a form of
the verb for “making something new.”
• The word eventually refer to bringing new things or
changing established practices.
• Innovation is defined as the process of bringing
about new ideas, methods, products, services, or
solutions that have a significant positive impact
and value.
• It involves transforming creative concepts into
tangible outcomes that improve efficiency, and
effectiveness, or address unmet needs.
1.2. Innovation and entrepreneurship
• Entrepreneurship is the process of identifying
opportunities in the market place, arranging
the resources required to pursue these
opportunities and investing the resources to
exploit the opportunities for long term gains.
• It involves creating incremental wealth by
bringing together resources in new ways to
start and operate an enterprise.
• Entrepreneurship is a practice and a process
that results in creativity, innovation and
enterprise development and growth.
• It refers to an individual’s ability to turn ideas
into action involving and engaging in socially-
useful wealth creation through application of
innovative thinking and execution to meet
consumer needs, using one’s own labor, time
and ideas.
Entrepreneurship consists five critical
elements. These are:
• The ability to perceive an opportunity.
• The ability to commercialize the perceived
opportunity i.e. innovation
• The ability to pursue it on a sustainable basis.
• The ability to pursue it through systematic
means.
• The acceptance of risk or failure.
• Key Differences between Invention and Innovation
Invention
• The occurrence of an idea for a product or
process that has never been made before is
called the invention.
• The invention is related to the creation of new
product.
• The invention is coming up with a fresh idea
and how it works in theory.
• The invention requires scientific skills.
• The invention occurs when a new idea strikes
a scientist.
• The invention is concerned with a single
product or process.
• Invention is limited to research and
development department of the organization.
innovation
• The implementation of the idea for product or
process for the very first time is called
innovation.
• Innovation means adding value or making a
change in the existing product.
• Innovation is all about practical
implementation of the new idea.
• Innovation requires a broad set of marketing,
technical and strategic skills.
• innovation arises when a need realized for a
new product or improvisation in the existing
product.
• Innovation focuses on the combination of
various products and services.
• Innovation is spread all over the organization.
types of innovation
 There are four distinct types of innovation, these are:
(1) Architectural Innovation
• Architectural innovation happens when new things,
like products or services, use existing technology to
make new markets or reach new customers who
haven’t bought that thing before.
• It includes:
 Product Design
 System Architecture
 Organizational Structure
 Information Systems
(2) Disruptive Innovation
• Disruptive Innovation is when a new product or
service starts in basic, affordable applications at the
lower end of the market. As it becomes more
accessible, it gradually moves up the market,
eventually displacing established competitors.
• Involves the transformation of costly or intricately
sophisticated products or services once exclusive to a
high-end or more skilled consumer segment into
offerings that are more economical and accessible to
a wider population.
(3) Radical Innovation
• Radical innovation is like creating something completely
new that can replace the way things are done now.
• It’s different from small improvements or changes it’s a
big, groundbreaking idea that can transform the whole
way a business operates.
(4) Incremental Innovation
• Incremental innovation involves making small
improvements or upgrades to a company’s current
products, services, processes, or methods.
• The changes made through incremental innovation
aim to enhance the development efficiency,
productivity, and competitive advantages of existing
products.
The Innovation Process
• The innovation management process typically
involves several steps or stages:
Step 1. Identify Challenges and Opportunities
• The first step is to identify the challenges or
opportunities that the organization aims to
address through innovation.
• This could involve analyzing market trends,
customer needs, competitive landscape,
technological advancements, and internal
capabilities.
Step 2. Idea Generation
• In this stage, ideas are generated to address the
identified challenges or opportunities.
• This can be done through brainstorming sessions,
idea contests, employee suggestion programs,
market research, customer feedback, or
collaboration with external partners.
Step 3. Idea Screening and Evaluation
• Once ideas are generated, they need to be screened
and evaluated to identify the most promising ones.
This involves assessing ideas based on criteria such as
feasibility, market potential, strategic alignment,
technical requirements, and resource availability.
Step 4. Concept Development
• Once the most promising ideas are selected, they
are further developed into concept proposals.
• This stage involves refining the ideas, conducting
market research, creating prototypes, and assessing
technical feasibility.
Step 5. Business Case Development
• A business case is created to assess the viability and
potential return on investment of the innovation.
• This involves conducting a detailed analysis of the
market size, potential revenue, cost estimation,
financial projections, risks, and benefits.
Step 6. Development and Testing
• If the business case is approved, the innovation
moves into the development stage.
• This involves transforming the concept into a
tangible product, service, or process.
Step 7. Implementation and Commercialization
• Once the innovation is developed and tested, it is
prepared for implementation and
commercialization.
• This stage involves finalizing the product design,
manufacturing, or development, setting up
production processes, establishing supply chains,
and creating marketing and sales strategies.
Step 8. Launch and Post-Launch Evaluation
• The innovation is officially launched in the market,
and marketing and sales efforts are executed.
• Post-launch evaluation involves monitoring the
performance of the innovation, gathering
customer feedback, measuring key performance
indicators (KPIs), and assessing the success of the
innovation in achieving its objectives.
Step 9. Continuous Improvement and Scaling
• Innovation management is an iterative process, and
organizations need to continuously seek ways to
improve and scale their innovations.
Areas of Innovation
• New product
• New Services
• New Production Techniques
• New Operating Practices
• New Means of Informing the Customer about the
Product
• New Way of Delivering the Product or Service to the
Customer
• Innovation is the specific tool of
entrepreneurs, the means by which they
exploit change as an opportunity for a
different business or service. It is capable of
being presented as a discipline, capable of
being learned, capable of being practiced.
• This idea of entrepreneurship driving
innovation to create value social and
commercial across the lifecycle of
organizations
Creating commercial value
Start up
• Individual entrepreneur exploiting new
technology or market opportunity
Growth
• Growing the business through adding new
products/ services or moving into new markets
Sustain
• Building a portfolio of incremental and radical
innovation to sustain the business and/ or spread
its influence into new markets
Renew
• Returning to the radical frame breaking kind of
innovation which began the business and
enables it to move forward as something very
different
Creating social value
Start up
• Social entrepreneur, passionately Concerned
to improve or change something in their
immediate environment
Growth
• Developing the ideas and engaging others in a
network for change perhaps in a region or
around a key issue
sustain
• Spreading the idea widely, diffusing it to other
communities of social entrepreneurs,
engaging links with mainstream players like
public sector agencies
renew
• Changing the system and then acting as agent
for the next wave of change
innovation isn’t easy

• Innovation is difficult because it requires a

combination of creativity, problem solving
skills and the ability to think outside of the
box. There are many innovation management
challenges but the followings are the main
challenges of innovation.
• Impatient leadership
• Lack of innovation culture
• A fear of change
• Lack of ownership
• End to end processes
• Inadequate benchmarking
• No innovation ecosystem
 Managing innovation and entrepreneurship

• A number of key innovation management

practices have a particularly strong impact on
innovation performance across business.
These are:
• Explore and understand different dimensions
of innovation (ways in which we can change
things)
• Manage innovation as a process
• Create conditions to enable them to repeat
the innovation trick (building capability)
• Focus this capability to move their
organizations forward (innovation strategy)
• Build dynamic capability (the ability to rest
and adapt their approaches in the face of a
changing environment).
 Dimensions of Innovation

• Product: Changes in the things

(products/services) an organization offers
• Process: Changes in the ways these offerings
are created and delivered
• Position: Changes in the context into which the
products/services are introduced
• Paradigm: Changes in the underlying mental
models which frame what the organization
does
A Process Model for Innovation and Entrepreneurship

There are four processes model for innovation

and entrepreneurship:
• Recognizing the opportunity
• Finding the resources
• Developing the idea
• Capturing value.
What are the Benefits of business innovation?
• Solves complex business problems
• Increases productivity
• Brings uniqueness and novelty to business
process
• Gives a competitive advantage
• Reduces cost and increases revenue
How Does Innovation Help To Achieve Business
Success?
• Here are some ways in which innovation will
help in achieving success in businesses:
• It helps organizations differentiate themselves
from the rest by implementing different
innovative marketing, production, and sales
strategies.
• It helps companies fight uncertainties and stay
relevant in times of adversities.
• It helps organizations grow in complex
situations
 Innovation Management
• Innovation management is defined as the process of
a systematic and strategic approach to generating,
developing, and implementing new ideas, products,
services, or processes that result in organizational
value addition.
• Innovation management involves the process of
managing an organization's innovation procedure,
starting at the initial stage of ideation, to its final
stage of successful implementation.
• Innovation management is crucial for organizations
to stay competitive in dynamic and evolving markets.
The key aspects of innovation management
Capabilities
• Capabilities are an umbrella term used to cover the
different abilities and resources the organization has for
creating and managing innovation.
Structures
• The right structures can work as a force multiplier
allowing the organization to operate and innovate
much more effectively.
Culture
• With the right kind of pro-innovation culture, the
organization is much more likely to be able to recruit
and keep the right people in the organization.
Strategy
• Strategy is, simply put, the plan the
organization has for achieving long-term
success.
• But what’s critical to understand is
that strategy is ultimately about making a
deliberate choice between a number of
feasible options to have the best chance of
“winning” and this choice shouldn’t obviously
be separate from the execution.
Importance of Innovation management
• Competitive Advantage
• Growth and Expansion
• Adaptation to Change
• Improved Efficiency and Productivity
• Employee Engagement and Retention
• Customer Satisfaction
• Long-Term Sustainability
THANK YOU

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