Innovations, Ideations and New Product Development

Subject: Management
Pages: 7
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Study level: School

Ideation and Innovation

Laforet’s “A framework of organisational innovation and outcomes in SMEs” and Björk et al.’s “Ideation Capabilities for Continuous Innovation” are making arguments about Ideation Capabilities for Continuous Innovation. They are also discussing the framework of organisational Innovation and outcomes in SMEs.

Comparisons between Ideation and Innovation

These topics are similar as both of them are talking about the different ideas that can be applied in innovation, and the various mechanisms in which these can be applied in Small and Medium enterprises (Laforet, 2010, pp. 434; Cooke, 2002). One article is concerned with capabilities for the idealities and innovations to be continuous as well as successful while the other is discussing on the types of innovations that can be made in small and medium enterprises as well as their outcomes.

Both articles are referring to the same phenomenon, and this has enabled one to get the information required with regard to innovations and ideations. Ideas give birth to innovations, and still the same innovations may lead to the development of other ideas that would be applied to improve the innovations as well as the SMEs. More so, it is the SMEs that are able to utilise the ideas and innovations (Teece et al, 1997).

New Product Development (NPD)

NPD is mandatory for those businesses that want to grow. Wolf and Pett (2006, pp. 102 ) suggest that improving the appearance of a new product is better than having great profits. When a product is new, it needs to be marketed and advertised vigorously so that it may have a lasting impact for all those who want to purchase it. NPD or New Product development refers to the manner in which a company makes adjustments to their innovative capabilities so that they may introduce a new product that is flawless and one that meets the market standards (Brown and Eisenhardt 1997, pp. 100; Holt, 2002).

It is a branch in a business that is majorly concerned with the introduction of new products into the market, more so modifications may be made to the existing products so that they become as good as new. A company may also re-brand the existing brands and combine two or more brands from different organisations so as to come up with a magnificent brand. Many management tools can be used to manage NPD in that, they will assist in marketing as well as the design of the product so that all the goals and objectives that are intended are achieved (Trajtenberg,1990).

Bjork et al (2010, pp. 200) stress that it is of note for organisations to invest a lot in NPD as it is able to boost the company’s image as well as bring into the market environment. Technological innovations and ideals that are passed on through NPD often pass the test of time and are embraced globally. This leads to greater profits that are enjoyed by the company. No matter the size of the organisation, all SMEs should engage in NPD (Lundahl, 2012).

Datamonitor (2011, pp.89) says that NPD may impact an organisation either positively or negatively, it may outdo all the other existing products, sand it will be quite a vast loss, coming up with a product that will lead the company to experience losses. On the other hand, it may be of excellent benefit in that; it will increase the cash inflows of the company, hence, greater profits. For a small company, coming up with a new product is costly and tedious as it involves a lot of time, investments and manpower (Enzing, 2009, pp.150). On the other hand, for a large company, it is rather cheap as they have all the finances, hence investments of time and energy are what is required so that they may bring the new product into being.

By introducing the new product, it calls for extra expenses which include advertising and marketing as well as information sharing as people will be able to ask and would seek to know the product. Before the product breaks the waters and people get acquitted of it, most of the time the firm will experience lots of losses as they will not gain as much as they would have if they had dealt with the older product. There are also after sale services that need to be put in place, as well as warranties, and guarantees.

As the product is still new, testing of the efficiency of the product is to be made time and again so as to ensure that the product is of the best quality no matter the circumstances. Goldenberg and Mazursky ( 2002, pp. 101) say that one of the shortcomings of NPD is that some of the products that are launched often fail during the first stage that is when they are launching, and hence, this calculates too many losses that are experienced by the organisation.

The risks are far too dangerous for small firms and hence the majority of them opt not to engage in NPD. Bjork (2010, pp. 134) asserts that NPD is a risk in itself, in that, the risks and threats are almost similar to those of beginning a business, and this makes innovations a venture that many people do not engage in. Due to the high number of failures associated with NPD, modifications are made to the existing products so that it suits the existing needs of the market environment (Business. Gov. Au, ND).

Discussion of differences and similarities of Innovations and ideations

In SMEs, echnology plays a major part in their innovation, and the generation of ideas. Technology is responsible for the majority of the innovations that have been made possible as well as the ideas that have led to the advancements in the business sectors, the same is also applied for all the other sectors that bring in revenue into the country (Cagan, & Vogel, 2002, pp. 234). By creating, changing or inventing new and effective services and products, new products come into being as well as organisations advance technologically.

Through these innovations, many organisations have been able to gain a competitive advantage over the other companies that are backward innovative ways. More so, it also creates better opportunities in the market place that are able to suit the needs of the client. By adapting to the market’s competitive nature and having an upper hand over the other competitors’ innovations spur an organisation to greater heights as they are able to reach trends and targets that they thought they could not (Cefis and Marsilli, 2003, pp. 123; de Jong and Marsili, 2006, pp. 99).

Bjork (2010, pp. 113) says that the creativity of the employees is what assists in the development of new products as well as coming up with innovations. They also contribute significantly to the pool of ideas that the organisation is able to venture into, and in so doing, the technologies and products that the organisation has, become sophisticated (Crawford, 1987, pp. 155; Cooper, 2001, pp. 147; Rhodes et al, 1994).

What is Ideation and the why is it Important?

Ideation refers to the ideas, imagination and integration of varieties of mechanisms so as to come up with meaningful and interesting results. More so, it helps in the creation, integration and proper utilisation of the resources of the organisation. It is for this reason that it goes hand in hand with innovations as it encourages the proper airing of views awhile innovation leads to proper utilisation of ideas so that they may be able to gain or achieve a better picture of what they had in mind.

Laforet (2011) ideation enhances the capabilities of the organisation, and many of those employees who bring in fresh ideas into the organisation are often promoted so that they can reap of the benefits of their labour. By so doing, they may also collaborate with people from other organisations in coming up with other prominent ideas through brainstorming. Brown and Eisenhardt (1997, pp. 156) state that when an organisation lacks skilled manpower to manage the ideas and innovations, most of the ideas go into waste and the company stagnates. It is the power that is in the personnel of the organisation that is able to drive ideation as well as innovations so that they may as well practice NPD and still come up with greater and better technological innovations.

Furthermore, Brown & Eishenhardt (1997, pp. 67; Teece, 2007, pp. 99) point out a shift from the static view to a dynamic view of competitive advantage this mean that there are more competing companies, e.g. large and successful brand like Nike and Sony infiltrated in the industry to compete for consumers. This shift has also played a vital role in influencing organisational changes and performance of Kodak (Kodak, 2010).

There was a tremendous change in the consumer preferences and needs, and this called for changes to meet these needs as well as achieve the desired targets of consumers (Nonaka, 1994). The consumers demanded high tech products for purposes of imaging and also to meet the needs of their status in the society. The circumstances as they were, practically forced Kodak to effect organisational changes in an effort to accommodate the changing needs of the consumers (Wulfen, 2011, pp. 113).

Effects of Ideation

Ideation involves the creation and integration of new ideas as well as modifying the existing ideas and resources so as to come up with innovations. It is the starting point of innovations, in that, many of the organisations, often table and brainstorm their ideas before they map out the innovations and the ways in which they will come into being. Ideas from the heart of innovation as they are the foundation on which the bricks of innovation are built (Bjork 2010, pp. 245). This is because a firm needs to have a sketch of what they need to achieve, which are the ideas while the innovation is the actual drawing put in perspective and reality.

More so, innovation is the implementation of the creative ideas in a successful manner so that they may be of use to the organisation (Jiem. org 2011, pp. 453). SMEs often lack the personnel to bring into life the creative ideas that are tabled across. This often leads to the organisations often lacking on the requirements that are required to remain up-to-date with the current market trends. It is a necessity for all organisations to practice ideation as it will be able to assist them in innovations. More so, all those who have no way in which they can be able to address financial issues, may also source funds from large enterprises that will give them assistance with regard to the finances.


To finalise, innovation and productivity largely implicate the market ratio and total revenue of the company at large. Indeed, the process of production and innovation is ambiguous and rely on the company market command and power in order to accumulate revenue.


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