The Importance Of Product Innovation

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CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction Companies of all sizes seek to be innovative and creative in order to gain competitive advantages, to increase growth and performances which in turn creates economic flows and dynamics that support labor and also the creation of new opportunities. Freel (2000) stated that innovators are more likely to experience business growth than non-innovators. According to (Harrison and Watson 1998), innovation and creativity may be one of the core competencies necessary for SMEs to survive and grow. In today’s globalized business environment, SMEs exert a strong influence on the economic growth and technological development of a country through their ability to innovate and create new products and processes…show more content…
Innovation in products or services: Product/service innovation is oriented toward improving the features and functionality of existing products and services. Service innovation is about making changes to products that cannot be touched or seen and they are often associated with work and recreation (Rubalcaba, 2013). If Product life cycles become shorter business survival will depend on new product development and increasingly on the speed of innovation in order to develop and bring new products to market faster than the competitors (Jonash and Sommerlatte 1999). From a commercial perspective, the attraction of product innovations is that the novelty of a new product persuades consumers to make a purchase and these leads to an increase in effective demand which leads to an increase in profits.. iii. Innovation in management and work organization: Management innovation involves the introduction of novelty in an established organization, and as such it represents a particular form of organizational change (Freel, 2000). This type of innovation can also be referred to as the exploitation of human resources such as knowledge and skills, together with the capacity to foresee techniques. 2.6 Implications of innovation and creativity on business…show more content…
The major tenet of this theory is that humans have six basic needs. These needs need to be met before one can thrive. Once these needs are met we can reach self-actualization and freedom to express in a creative manner. This theory argues that environment is not a factor in creativity. It implies that if the person is able to meet the six basic needs they can then choose to be creative. Creativity is central to our growth and learning processes and as such help us to advance ourselves within society. Believers of this theory believe self-actualization allows us to live a meaningful life and break out of social and cultural
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