Most businesses are still adhering to the invention model, “centered on a bricks-and-mortar R&D infrastructure and the idea that their innovation must principally reside within their own four walls”, Huston and Sakkab, (2006). But in today’s competitive words, where the markets are saturating, product substitutions are easily available, multinational businesses need to identify the resources and opportunities – new techniques and ideas, consumer preferences, marketing and production techniques- and introduce concepts such as innovation or rather open innovation to maintain their sustainability into the market. What is innovation?
Innovation
Innovation is “an idea, practice, or object that is perceived as new by an individual or other unit of adoption” Rogers (2003). It can be defined as implementation of a new or significantly improved good, idea, service, process, marketing method, some organizational method used in business practices, workplace structure or external relationships (Tiwari 2008). Innovations have been primarily categorized in four types: 1. Product Innovation, 2. Process Innovation 3. Marketing Innovation and 4. Organizational Innovation(OECD, 2007).
In order to thrive in the competitive business environment, every business enterprise need to put keen focus on its R&D units in order to promote innovation. many business fail to compete only because they fail to innovate new products, ideas and strategies. Following analysis provides strong reason for the business to invest in innovation process and understand its derivatives.
In order to thrive in the competitive business environment, every business enterprise need to put keen focus on its R&D units in order to promote innovation. many business fail to compete only because they fail to innovate new products, ideas and strategies. Following analysis provides strong reason for the business to invest in innovation process and understand its derivatives.
In the present era where local and multinational enterprises need to compete introducing newness into the market with each of their new product/series, then need to understand the importance of global innovation. Investing and connecting resources for developing global trends by understanding consumer interests and preferences, the business can help leveraging their business potential and maintain long term sustainability into the market.
Global Innovation
"By sourcing and integrating knowledge from dispersed geographic locations, companies can generate more innovations of higher value and lower cost" state Santos, J., Doz, Y., & William, p. (2004).For MNCs it has become mandatory to invest in innovation with context to the various countries they are operating in or want to work with. Following the the global innovation process reference model indicating how local and global factors need to interconnect to maintain a stable innovation capacity and global competitiveness.
Business need to approach knowledgeable resources and develop local conformity inside the leading markets. For that they can hire local specialists who have extensive know how of the area in context. By developing a pool into local values, needs, aspirations, technologies these MNCs would be able to develop global product with slight modifications complementing to the local flavor. While acquiring ideas and resources from across the globe, firms are able to avail cheaper resources and thus cutting down their R&D cost and developing cheaper production techniques help them to reap more profits.