Levels of Innovation Section: SDL 1
The purpose of the learning is for you to develop your own learning. There are a number of tasks that you should complete before you undertake the next section. You can work through this section at your own pace. It is expected that you would take up to 3 hours to complete this section. You must complete this section before you move to the next section.
Read the article “Dimensions of Change”
This introduces the activity
Dimensions of Change
A small bakery produces bread for the mass market bread. However there is fierce competition from other local bakeries and supermarkets. After some research the baker sees an opportunity to change her business to meet this competition. She discovers that the two other small bakers and the two supermarkets focus solely on mass produced bread. Talking to both her customers and the supermarket customers she realises that there is a market for high quality artisan bread.
The introduction of one or two new lines would not diminish the direct competition as the baker would still be relying on mass produced bread for most of her income. Introducing the one or two new items is also not sustainable as the customers would not necessarily identify the baker as being different. So, incremental changes to the production of bread would not work. Radical changes to one or two items also would not work because the baker would still be selling mass produced bread and would still face the same competition. The research suggested that she need to completely differentiate the bakery from all the other bread outlets. Consequently, the baker chose to radically change the bread she made.
The baker needed to identify how those radical changes would implement and undertook an analysis of the solution using the 4Ps mentioned in Unit 3 OLL 2. In the table below you can see the changes that the baker introduced.
|New ingredients: new types of flour, new tastes and new shapes||Change from machine to hand kneading, changes to ingredients and hand shaping||Speciality artisan bread||Niche market: The bakers skills and artistry|
You can see a number of elements from previous units in this table. For example, in the section on pattern recognition we mentioned things like shape and taste as critical factors. You can also see the elements that make the radical system change actually work. The products are substantial different to mass produced bread in that the baker is using different flours and other ingredients, along with changes in the shape of the loaves of bread. By producing the bread by hand the loaves move away from the traditional notion of bread and take on the notion of almost being a new product. The position in the market changes radically. The loaves of bread become high value speciality products which leads to a change in the way customers view the business. The bakery moves from the mass market to a niche market.
You should recognised a number of factors from past Units such as pattern recognition and the different levels of innovation.
Read the “Case Study ” and complete the activity in your workbook
This activity enables you to develop your skills at analysing innovative solutions
This case study was introduced in the SDL1 for this Unit. It applies the concepts in this task and will continue to be part of the next few tasks.
You run a small online business selling small items that fit in an envelope. Previous you ran your business from a large garage in your garden. Each you would print the orders on separate sheets. The taking one order at a time you would collect the items from the shelf place them in an envelope before sealing the envelope and placing the item in the postal collection box. It took no more than 2 minutes to complete the order.
However, your business has grown and you now run your business from a large warehouse. You still print each order on separate sheets but due to the size of the warehouse it now takes 3 minutes and 30 seconds to complete each order separately. This additional 1 minute and 30 seconds means that over 15% of orders are going out a day late and you cannot catch up. Customer complaints are beginning to affect your rating online.
The ideas ranged from employing extra staff, putting popular products close to the front of the warehouse, introduce a catalogue system so staff knows exactly where products are, baskets or trolleys to collect items, changing the delivery times, prepacking items and many others.
Type of Need
This is an everyday problem that requires a specific solution.
Importance of need
Extremely high, this sort of business is reliant on high levels of customer satisfaction, price differentiation is almost impossible to achieve as online retailing is very transparent. If the rating drops below 93% of 4.5 stars then sales will drop.
Cause of need
The need was caused by the relocation to larger premises. While moving meant the number of products sold could double, it also created several logistic problems this being the main one. We used the 5 whys tool.
There were three parameters, one was cost. Moving the business had used up the cash reserves and until sales increased through more products there were no funds to spend. The second parameter was time, the solution had to be found and applied within two days. The last parameter was that the solutions had to be viable at least until sales and therefore profits reach a level that cash reserves were replenished and there was enough to consider alternative solutions.
Several solutions were considered and tested. In the end the most cost effective solution was to purchase 3 supermarket shopping trolleys. They worked for a number of reasons. Firstly was size, although most products sold are quite small once they are in the envelopes they are quite bulky. The shopping trolley was able to take more filled envelopes than a staff member could carry, and when the trolley was full it was still relatively light enough to push back to the despatch area. The child seat was ideal to hold the empty envelopes and the order lists in an orderly way. The trolleys were robust and quite cheap.
Using the 4Ps analyse the solution utilised by this business. You need to answer the question in your workbook.
You should undertake further reading on the topics in this section. We recommend that you read the following:
- Bessant, J. & Tidd, J., (2015), Innovation and Entrepreneurship, 3rd Edition, Wiley, Chichester
- Michanek, J. & Breiler, A. (2014) The Idea Agent, The Handbook on Creative Processes, New York: Routledge
The next section is Unit 3 OLL 3
Introduction to the module
Welcome to this module on innovation. The module is designed to be used either individually or within a classroom setting. The module takes a non-technical approach to innovation and looks at setting innovation within small every day businesses. It explains what innovation and isn’t and how you can develop your skills and abilities to become better business owners. You will find the module will challenge your thinking around innovation in preparation for either starting your own business or developing an existing one.
This module can be used as a standalone module on innovation or as part of the Student Business e-Academy programme on Business start-up.
Download here related workbooks before starting the course:
All workbooks in this course please submit to firstname.lastname@example.org (MDX students), email@example.com (UMA students) or firstname.lastname@example.org (UNIST students), upon finishing the assignments.
Dr. Simon Best is a Senior Lecturer at Middlesex University, with interests in micro and small business start-up and development. Simon’s first career was 15 years as a chef; this was followed by two years as a Market Researcher and then 28 years as self-employed business owner. During his time as a business owner, Simon started businesses in Australia, Papua New Guinea, India and Viet Nam. Simon has extensive networks across many countries. Currently Simon leads the Enterprise development hub – EDH@MDX as well as lecturing in Entrepreneurship and small business development.
For discussion and course related questions visit the FORUM.
- Lectures 20
- Quizzes 11
- Duration 60 hours
- Skill level All levels
- Language English
- Students 75
- Assessments Self
UNIT 1. What is innovation?
- Lecture 1.1 What is innovation? Section: OLL 1
- Quiz 1.1 Quick Quiz U1OLL1
- Lecture 1.2 What is Innovation? Section: OLL2
- Quiz 1.2 Quick Quiz U1OLL2
- Lecture 1.3 What is Innovation? Section: SDL 1
- Lecture 1.4 What is innovation? Section: OLL3
- Quiz 1.3 Quick Quiz U1OLL3
- Lecture 1.5 What is innovation? Section: SDL2
UNIT 2. Acting innovatively
- Lecture 2.1 Acting Innovatively Section: OLL1
- Quiz 2.1 Quick Quiz U2OLL1
- Lecture 2.2 Acting Innovatively Section: OLL2
- Quiz 2.2 Quick Quiz U2OLL2
- Lecture 2.3 Acting innovatively Section: SDL 1
- Lecture 2.4 Acting Innovatively Section: OLL3
- Quiz 2.3 Quick Quiz U2OLL3
- Lecture 2.5 Acting Innovatively Section: SDL 2
UNIT 3. Levels of innovation
- Lecture 3.1 Levels of Innovation Section: OLL 1
- Quiz 3.1 Quick Quiz U3OLL1
- Lecture 3.2 Levels of Innovation Section: OLL 2
- Quiz 3.2 Quick Quiz U3OLL2
- Lecture 3.3 Levels of Innovation Section: SDL 1
- Lecture 3.4 Levels of Innovation Section: OLL 3
- Quiz 3.3 Quick Quiz U3 OLL3
- Lecture 3.5 Levels of Innovation Section: SDL 2
UNIT 4. Managing innovation
- Lecture 4.1 Managing Innovation Section: OLL 1
- Quiz 4.1 Quick Quiz Unit 4 OLL 1
- Lecture 4.2 Managing Innovation Section: OLL 2
- Lecture 4.3 Managing Innovation Section: SDL 1
- Lecture 4.4 Managing Innovation Section: OLL 3
- Quiz 4.2 Quick Quiz Unit 4 OLL 3
- Lecture 4.5 Managing Innovation Section: SDL 2