BU7030 Managing Innovation Assignment Sample 2023
Introduction
Innovation is described as the process adopted by an organisation for bringing new changes to secure a competitive edge in the market. In today’s business world, it becomes very essential for a business organisation to adopt creativity and innovation so they can survive in the competitive market.
As per Tidd & Bessant, (2020), innovation is all about bringing new products and services in the market beneficial for organisation’s success and helps in attracting consumers. The report will cover different concepts of innovation that need to be considered while bringing new services into the market. The SME chosen for developing an innovation portfolio is House of Tides, Newcastle.
It is a restaurant chain surviving in the market since 2014 and has a Michelin star. The innovation process and actions undertaken in context with SMEs will be focused on the issue they are facing due to some external effects. For developing an innovation portfolio, the report will take advantage of Tidd & Bessant innovation process model. Several criteria that need to be focused on while bringing innovation will be discussed in the report.
1. Innovation process
As per Aliasghar, Rose & Chetty, (2019) Innovation plays a crucial role in surviving in today’s competitive market. There can be seen various advancements in the market that can affect the growth of an organisation. For instance, the development of technology, changing consumer preferences frequently, development of new trends, and sustainability can affect the growth and success of the organisation.
The primary benefit of innovation is to help the organisation in surviving in the market, improvise customer satisfaction, develop new products and services and offer unique products. An organisation focusing on bringing innovation needs to focus on following its process so the likelihood of rising issues and challenges can be reduced.
The world of innovation comes with various challenges as well as opportunities that companies can take advantage of. These are often concerned with various product innovations, bringing changes in internal processes or culture, or business models.
Every organisation tries its best to bring innovation and it needs to be noticed that innovation comes with numerous risks that the organisation requires monitoring (Nguyen & Harrison, 2019). Further, various characteristics of innovation are there that is required to monitor so effective benefits can be taken.
Characteristics of innovation
Innovation helps companies grow and achieve success: It has been discussed above that for surviving in the current competitive market it is must to bring changes innovatively. Organisations need to focus on achieving long-term objectives instead of short-term goals. It is because long-term objectives help the organisation achieve growth and success, whereas; short-term objectives remain profitable for a certain period (Najafi-Tavani et. al., 2018).
Innovation helps companies in formulating strategy by identifying new products or services or bringing changes in existing services or products. Successful innovation is beneficial for expanding business, gaining profits, and increasing sales that directly helps the organisation in growing.
Innovation keeps organisation relevant and helps in following market trends: It can be observed that market trends are constantly changing affecting consumer preferences as well. For keeping up with trends it is mandatory to bring innovation and changes accordingly. The primary innovation being adopted by every organisation is technological advancements and the data proves that 570+ websites are created per minute and around 8 billion devices are connected to the internet by 2020 (Poirier et. al. 2017).
From this perspective, it can be seen that keeping technological trends in mind is mandatory for achieving success.
Innovation helps organisation in differentiating themselves: Bringing innovation requires constant monitoring and that gives a clear description of products and services being demanded. After monitoring every industry or company aims to bring products and services that are unique and different from their competitors (Saunila, 2020). It clearly describes that innovation is helpful for companies to increase their productivity as well as profitability.
Innovation process model
The innovation process model developed by Tidd & Bessant consists of four primary stages. It includes searching, selecting, implementing, and learning. All four processes play a crucial role in bringing innovation as it supports the organisation to bring what is highly demanded in the market instead of investing in the thing that is not essential.
Search: It describes the process of researching the market trends and innovation competitors and others are bringing. The process aims at searching on the external and internal factors of the organisation that can give information about the innovation. For instance, the external environment would help in analysing market competitiveness that makes it essential for bringing innovation (Hunke et. al. 2017).
Further, social trends and technological advancements that are must secure a competitive position in the market. Other than that, research also helps in examining the present challenges and opportunities that an organisation has. Researching and communicating with employees is must for making them understand the need for bringing innovation and this stage plays a crucial role in enhancing teamwork and asking employees for support.
Select: Researching on the requirement of innovation along with the external and internal market environment depends on selecting the particular ideas that will highly benefit the organisation. SME needs to focus on ideas and analyse the cost and time that will require bringing change. In this stage, out of searched ideas in the first stage, prioritise them and bring one into action further (Gurca et. al. 2021)
In selecting an idea, interaction with employees and the team is mandatory to gather their opinions so selection can be done effectively. For selecting an idea, it is necessary to focus on challenges and opportunities that the growing business can offer.
Figure 1: Innovation process model.
(Source: Vurburg, 2019)
Implement: It is all about bringing the selected ideas into action. The selection of ideas will further develop a strategy accordingly and then it will be implemented. The implementation of the idea is highly focused on project management and leadership capabilities so the team can work effectively and bring the best out of them.
The leaders and project managers are highly responsible for motivating and encouraging employees so they can support the change and suggest their opinions as well (Tidd, 2021). Planning strategically and implementing is must necessary for achieving success.
Learning: It can be noticed that implementing such a huge project into action lessons various things to the team. While implementing the project various challenges and obstacles can occur it is mandatory to learn from those so these challenges can be eliminated in future innovations. Other than that, success and failure of innovation also teach various aspects that need to be considered in further innovations.
2. Innovation in practice
2.1 Company context
The company chosen for developing an innovation portfolio is House of Tides operates in the hospitality sector. House of Tides is opened in 2014 and located at the historical Newcastle Quayside and set within the beautifully restored Grade 1 listed 16th-century former merchant’s townhouse. It is an informal and casual fine dining restaurant developed of two floors.
The ground floor is set with the touch of 16th century exposed beams and flagstones offering a great venue for dinner, drinks, and a leisure nightcap (House of Tides, 2020). The first floor offers an excellent view over the River Tyne and consists of a major restaurant seating area along with a big open fireplace and exposed beams.
The primary vision of House of Tides is to offer a place that offers informal and casual dining space that makes everybody feel comfortable and relaxed along with superior quality. The restaurant is awarded by four AA Rosette and one-star Michelin.
Furthermore, the company has less than 25 employees and generates revenue <$5 million. The restaurant offers six or nine-course tasting menus with excellent taste and service. Further, the hospitality sector has faced huge challenges during the pandemic period as they have to temporarily close their restaurants for a long time. Based on the research, it can be observed that out of all industries hospitality and tourism industry has seen an enormous decline in their sales and profitability (Breier et. al. 2021).
House of Tides being an SME has faced a financial downturn during the lockdown period and it becomes very difficult to survive. After the reopening of stores, the quality and safety of food play a crucial role as every consumer wants to have food that is premium and superior.
Other than that, technological advancements are increasingly rapidly making it essential for companies to adopt so they can survive in the competitive environment. Restaurant chains have also adopted various technologies for enhancing customer experience and satisfaction.
Technological advances impose greater challenges and opportunities for any organisation (Martín-Rios & Ciobanu, 2019). It is because failing to adopt technologies can be challenging for businesses to survive in the market whereas; emerging technology comes with various opportunities helping them to grow and achieve success.
Market competitiveness is increasing rapidly that can affect the customer base of the organisation. House of Tides faces tough market competitiveness from Peace & Loaf restaurant, Chucho’s the Real Mexican Food, Persia Restaurant, Mosob Gezana Newcastle, and many more.
They face tough market competitiveness in Newcastle and it becomes essential to differentiate them from other restaurant chains. Based on the research, it has been found that House of Tides doesn’t offer any takeaway and delivery options that can be challenging.
Looking at the market trends, it can be observed that customer demand for online delivery is increasing and it becomes essential for bringing innovation in their delivery service to keep the level of customer satisfaction high (Lee, Sardeshmukh & Hallak, 2018). These are some challenges that are being faced by the House of Tides.
2.2 Innovation in action
Substantial area of innovation
From the challenges examined above, it can be observed that the market competitiveness in the hospitality sector is increasing and their competitors are offering takeaway and delivery services to the customer. House of Tides only offers dine-in services that are not enough today’s competitive market.
It needs to be observed that the pandemic has changed consumer preferences to a great extent. Some of the customers try to avoid crowded places so they can keep the symptoms of Covid away (Yang, Liu & Chen, 2020). Keeping this in mind, they have started to place an order online using the restaurant application or third-party applications tied up with the restaurants.
As per the analysis, it is guided that House of Tides needs to bring innovation in their service so they can resolve the challenges along with adopting the opportunities that are emerging in the market.
House of Tides can either develops their online application allowing consumers to place an order online or merge with third-party applications for delivering food online. In the world of technological advancements, taking online orders and delivering it to consumer doorsteps is very much crucial for enhancing growth and success (Suhartanto et. al. 2019).
The restaurant can develop their application online by recruiting a software developer and using various digital platforms they can advertise and promote their services. Rather than that, they can also use four major online service food delivery applications including DoorDash, Uber Eats, Postmates, and GrubHub. These are the four online food delivery applications serving in Newcastle. Initially, they can start by merging with one of these applications and if the online delivery order is increasing, they can also start their application.
After researching all the four applications, it has been analysed that Uber Eats offers cheap and effective services as compared to the other three. Choosing the application that attracts most of the consumers will be beneficial for the restaurant to increase their online sales (Das, 2018).
Other than that, in the beginning, House of Tides can offer discounts on their initial days to attract customers and establish a potential customer base. After analysing the online order, they can offer various discount coupons and vouchers to attract more customers. In this way, they can bring innovations in their services.
Figure 2: Benefits of online food delivery.
(Source: McCann, 2020)
Furthermore, measure the success monthly and bring innovations effectively. However, it can be seen that third-party applications take 15-20% of benefits but it is essential to establish a customer base using these applications. After establishing the customer base House of Tides can switch to their personal online application (McCann, 2020).
For instance, if the profitability increases after merging with the third-party application, then they can hire a software developer and develops their own online food delivery application where customer can order online food directly from the restaurant instead of involving a third party. Developing a personal application is beneficial in getting more profits and benefits as compared to merging with a third-party application.
Bringing advancements in online services comes with various opportunities as it helps in enhancing the customer base from different areas nearby the location of restaurants (Yeo, Goh & Rezaei, 2017). Other than that, customers can offer reviews and feedback about the food quantity, quality, and taste that can be improved if any issues are identified. In this way, House of Tides can offer online service delivery and takeaway options to their customers and explore new market segments.
Importance of leadership
Leadership is described as the process of encouraging and guiding team members for implementing strategies so they can achieve organisational goals and objectives. It can be seen that leaders are responsible for motivating the employees about the change. Many of the times it can be seen that strategies planned for innovation are not accepted by the employees (Li et. al. 2018).
Other than that, many employees restrict the change process as they don’t feel the need. Leadership helps in making the employees understand the requirement of the organisation by addressing the benefits of change they are going to adopt. Many of the employees face challenges while managing online orders and services but leaders must make train and develop them accordingly so they can adopt change effectively.
Figure 3: Leader’s role in bringing innovation.
(Source: Role of leaders in innovation, 2020)
Furthermore, leaders play a dual role while managing innovations. In their top-down role, leaders are the primary means for the company to identify the innovation goals and strategies. In the bottom-up role, they circulate the innovative results by analysing ideas coming from teams and employees.
The entire innovation process depends on the role of leaders as they interact with employees and analyse the challenges being faced by the company so changes can be made accordingly (Arena et. al. 2017). After analysing the issue, they will communicate further to examine the solutions for current problems. Leadership will analyse the alternative solution and select the best one that offers great advantages and results.
The entire implementation plan and strategies are formulated by the leaders and tasks are assigned to employees by the leaders. Leaders can identify the employees that are best suitable for taking part in the project to achieve the best outcomes and success.
From the entire analysis, it can be observed that leadership plays a crucial role in driving innovation as they are the ones identifying the requirement of innovation. Leadership will then formulate strategies and implement changes accordingly (Davila, Epstein & Shelton, 2012).
Leaders will guide team members to achieve success and fix their mistakes. It is crucial for leaders to stay confident and motivated while bringing innovation as it will improvise the employee’s confidence as well.
Several internal resources are required to implement the innovation discussed above. As per the proposed innovation necessary internal resources include HR management, employee engagement, leadership & vision, and technological skills. The importance and benefits of these internal resources are described in broad below:
HR management: HR management is an essential internal resource of the organisation when it comes to bringing innovation. It can be seen that HR knows employee skills and talents that can be utilised while bringing innovation. Technological innovation requires adequate training and development programs provided to employees so they can support the entire innovation process.
It is the responsibility of HR management to select the employees that are best suitable for the implementation of the current innovation process (Bulińska-Stangrecka & Bagieńska, 2019). Selecting employees is the initial step for taking innovation to a further step.
Employee engagement: It can be observed that employee engagement plays a crucial role in bringing changes. Employees need to be encouraged and motivated continuously so they engage and support the innovation process effectively (Hoque et. al. 2017).
Employees are the key to success their ideas, contribution, and support are necessary for improvising organisation success and growth. For the proposed innovation, employees play a crucial role in taking orders and preparing the order on time so it can be delivered to the customer appropriately.
Leadership & Vision: Leadership & Vision offers a sustainable competitive advantage to the company. It can be observed above that leader play huge responsibility in implementing innovations. Leaders would be the ones deciding the innovation that is required and beneficial for the organisation (Novitasari et. al. 2021).
Further, they will choose the employees and encourage them to support the innovation process. Leaders will create a visionary statement and implement strategies for bringing innovation and at last, analyse and bring changes in new services if required.
Technological skills: Technological development is all about the proposed innovation and that is the reason technological innovation plays an essential role (COCCIA, 2021). Lack of technological skills will develop gaps and loopholes in the implementation process as developing the strategies needs to be accurate. It can be observed that the company has to adopt an online food delivery service and it needs to be learned by other employees before working on it.
Market dynamics and trends are changing frequently and so as customer preferences. In the food sector meeting, customer taste and preferences play a crucial role in achieving success and profitability (Lusk & McCluskey, 2018). From the above analysis, it can be observed that technologies are increasing rapidly and making it essential for SMEs to adopt them so they can secure a competitive edge in the market.
It can be seen that various external factors can be identified that can affect the designing stage of the organisation. Looking at the technological advances, it can be analysed that technological demand can change rapidly and that can affect the process of innovation to some extent.
Price fluctuation in the third-party application can affect the designing stage. For example, if the online food delivery application hikes its prices, then it can affect the profitability of the organisation to great extent. During this, it is must for the company to establish a contract before starting the services with them.
It would be beneficial for the organisation to keep the prices as negotiated and companies can gain decided profit (Castillo-Vergara, Quispe-Fuentes & Poblete, 2021). Further, various substitutes are available on the third-party application and it can seek their attention to a great extent. Looking at this, it is must to analyse the taste and preferences of the customer and serve them so it can attract various consumers.
The financial crisis is highly responsible for affecting the buying decisions of the customer and it can impact the sales of the company in online delivery as well. For this issue, House of Tides needs to focus on establishing a customer base initially instead of earning huge profits. After establishing a customer base, they can offer discount coupons and benefits to the customer as per their preferences would be effective.
At last, the major factor that can affect the entire delivery process and profitability is the increased transportation cost. It can be observed that the cost of fossil fuels is increasing affecting the cost of transportation. Increased transportation costs will increase the cost of food products and that can even reduce the customer base.
Potential influences of organisational culture on innovation process
Organisational culture is highly essential for bringing innovation as it supports the employees in developing strategies. The culture of any organisation describes its influencing power on employees to motivate them for bringing innovation (Gorzelany et. al. 2021). The factor that supports innovation is the ability of leaders and employees to take the risk.
It is the organisational culture that enhances the ability of employees to take a risk and bring innovations in favour of the organisation. Further, organisational culture influences leaders to interact with employees and communicate about the issues and ways that can resolve particular issues. Interacting with employees will also help in identifying the demands of customers and innovation can be brought accordingly.
Innovation management is highly influenced by the culture of the organisation as it keeps the employee motivated and encouraged so they support the entire innovation process adequately.
From the analysis above, it can be seen that employee engagement and leadership play a crucial role in developing innovation and these two elements can be influenced by innovative organisational culture (Rezaei, Allameh & Ansari, 2018). For example, if the culture of the organisation doesn’t support innovation, then employees and leaders can’t do anything. While some organisational culture supports innovation and engages employees and leaders in developing creative strategies to achieve success.
Organisational culture needs to be formulated in such a manner that offers rewards, benefits, and incentives to employees as it helps in bringing the best out of the employees and supports innovation as well. As per Kuratko, Goldsby & Hornsby, (2018) the training and development programs that are in the nerves of organisational culture also drive innovation at its best. Because offering adequate training and offering knowledge about particular skills would help in developing talents that can support the strategies for innovations.
Conclusion
It has been observed in the report that innovation is the most essential part of driving success and securing the competitive edge in the market. The report is focused on developing the innovation portfolio for House of Tides located in Newcastle.
The company operates in the hospitality industry offers a great quality of food to its customer along with an excellent and relaxing dining experience. Based on the challenges identified in the report innovation portfolio was developed. Initially, the innovation process model developed by Tidd & Bessant is described in the report. It is comprised of four stages including search, select, implement and learn.
All four steps play a crucial role in implementing the innovation with a high probability of success. It can be concluded that changing market dynamics, consumer preferences, increased technological advancements, and market competitiveness are the primary challenges being faced by House of Tides.
Furthermore, it has been estimated that various competitors are offering online delivery and takeaway services to their customers. Whereas; House of Tides just provides a dine-in experience to its customers. Because of the changing trends and increased customer preference to have food ordered online, innovation is focused on merging with third-party online foodservice applications initially.
After achieving success, they can develop their online application allowing the customer to order online. It will be profitable but establishing a potential customer base is necessary for adopting this as it requires huge investment as well. The capability and importance of leadership in driving innovation are described as well.
Further, it is being followed by identifying the internal resources that are essential for proposed innovation. Based on the research, the report has described technological skills, HR management, leadership & vision, and employee engagement. Potential external factors that can affect innovations are changing customer preference, increased transportation cost, and increased price of third-party. At last, the importance of organisational culture in driving innovation is also described.
References
Books and Journals
Aliasghar, O., Rose, E. L., & Chetty, S. (2019). Where to search for process innovations? The mediating role of absorptive capacity and its impact on process innovation. Industrial Marketing Management, 82, 199-212.
Arena, M., Cross, R., Sims, J., & Uhl-Bien, M. (2017). How to catalyze innovation in your organization. MIT Sloan Management Review, 58(4), 38-48.
Breier, M., Kallmuenzer, A., Clauss, T., Gast, J., Kraus, S., & Tiberius, V. (2021). The role of business model innovation in the hospitality industry during the COVID-19 crisis. International Journal of Hospitality Management, 92, 102723.
Bulińska-Stangrecka, H., & Bagieńska, A. (2019). HR practices for supporting interpersonal trust and its consequences for team collaboration and innovation. Sustainability, 11(16), 4423.
Castillo-Vergara, M., Quispe-Fuentes, I., & Poblete, J. (2021). Technological Innovation in the Food Industry: A Bibliometric Analysis. Engineering Economics, 32(3), 197-209.
COCCIA, M. (2021). Technological Innovation. innovations, 11, I12.
Das, J. (2018). Consumer perception towards’ online food ordering and delivery services’: An empirical study. Journal of Management, 5(5).
Davila, T., Epstein, M., & Shelton, R. (2012). Making innovation work: How to manage it, measure it, and profit from it. FT press.
Gorzelany, J., Gorzelany–Dziadkowiec, M., Luty, L., Firlej, K., Gaisch, M., Dudziak, O., & Scott, C. (2021). Finding links between organisation’s culture and innovation. The impact of organisational culture on university innovativeness. Plos one, 16(10), e0257962.
Gurca, A., Bagherzadeh, M., Markovic, S., & Koporcic, N. (2021). Managing the challenges of business-to-business open innovation in complex projects: A multi-stage process model. Industrial Marketing Management, 94, 202-215.
Hoque, A. S. M. M., Gwadabe, U. M., & Rahman, M. A. (2017). Corporate entrepreneurship upshot on innovation performance: The mediation of employee engagement. Journal of Humanities, Language, Culture and Business, 1(6), 54-67.
Hunke, F., Seebacher, S., Schüritz, R., & Illi, A. (2017, July). Towards a process model for data-driven business model innovation. In 2017 IEEE 19th Conference on Business Informatics (CBI) (Vol. 1, pp. 150-157). IEEE.
Kuratko, D. F., Goldsby, M. G., & Hornsby, J. S. (2018). Corporate innovation: Disruptive thinking in organizations. Routledge.
Lee, C., Sardeshmukh, S., & Hallak, R. (2018). Understanding the innovation development process in restaurants SMEs. CAUTHE 2018: Get Smart: Paradoxes and Possibilities in Tourism, Hospitality and Events Education and Research, 121.
Li, W., Bhutto, T. A., Nasiri, A. R., Shaikh, H. A., & Samo, F. A. (2018). Organizational innovation: the role of leadership and organizational culture. International Journal of Public Leadership.
Lusk, J. L., & McCluskey, J. (2018). Understanding the impacts of food consumer choice and food policy outcomes. Applied Economic Perspectives and Policy, 40(1), 5-21.
Martín-Rios, C., & Ciobanu, T. (2019). Hospitality innovation strategies: An analysis of success factors and challenges. Tourism Management, 70, 218-229.
Najafi-Tavani, S., Najafi-Tavani, Z., Naudé, P., Oghazi, P., & Zeynaloo, E. (2018). How collaborative innovation networks affect new product performance: Product innovation capability, process innovation capability, and absorptive capacity. Industrial marketing management, 73, 193-205.
Nguyen, H., & Harrison, N. (2019). Leveraging customer knowledge to enhance process innovation: Moderating effects from market dynamics. Business Process Management Journal.
Novitasari, D., Supiana, N., Supriatna, H., Fikri, M. A. A., & Asbari, M. (2021). The Role of Leadership on Innovation Performance: Transactional versus Transformational Style. JIMFE (Jurnal Ilmiah Manajemen Fakultas Ekonomi), 7(1), 27-36.
Poirier, V., Schwartz, L. H., Eddy, D., Berman, R., Chacour, S., Wynne, J. J., … & Sanberg, P. R. (2017). Thoughts on improving innovation: What are the characteristics of innovation and how do we cultivate them?. Technology & Innovation, 18(4), 319-330.
Rezaei, A., Allameh, S. M., & Ansari, R. (2018). Effect of organisational culture and organisational learning on organisational innovation: an empirical investigation. International Journal of Productivity and Quality Management, 23(3), 307-327.
Saunila, M. (2020). Innovation capability in SMEs: A systematic review of the literature. Journal of Innovation & Knowledge, 5(4), 260-265.
Suhartanto, D., Helmi Ali, M., Tan, K. H., Sjahroeddin, F., & Kusdibyo, L. (2019). Loyalty toward online food delivery service: the role of e-service quality and food quality. Journal of foodservice business research, 22(1), 81-97.
Tidd, J. (2021). A review and critical assessment of the ISO56002 innovation management systems standard: Evidence and limitations. International Journal of Innovation Management, 25(01), 2150049.
Tidd, J., & Bessant, J. R. (2020). Managing innovation: integrating technological, market and organizational change. John Wiley & Sons.
Yang, Y., Liu, H., & Chen, X. (2020). COVID-19 and restaurant demand: early effects of the pandemic and stay-at-home orders. International Journal of Contemporary Hospitality Management.
Yeo, V. C. S., Goh, S. K., & Rezaei, S. (2017). Consumer experiences, attitude and behavioral intention toward online food delivery (OFD) services. Journal of Retailing and Consumer services, 35, 150-162.
Online
House of Tides. (2020). [Online]. Accessed through: <https://www.houseoftides.co.uk/>
McCann. K. (2020). Pros and Cons of Offering Food Delivery Service. [Online]. Accessed through: <https://www.touchbistro.com/blog/pros-and-cons-of-offering-food-delivery-service/>
Role of leaders in innovation. (2020). [Online]. Accessed through: <https://www.pinterest.com/pin/121808364905539141/>
Vurburg. R. (2019). Innovation Process Model by Tidd, Bessant and Pavitt. [Online]. Accessed through: <https://www.researchgate.net/figure/Innovation-process-model-adapted-from-Tidd-Bessant-Pavitt-2005_fig1_228796279>
Know more about UniqueSubmission’s other writing services:
