Innovation In Small Business

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Researchers agree that small businesses represent the lifeblood of the economy. They create jobs, launch products and invent business models. However, small businesses have weaknesses, too. They suffer from being fragile, particularly during the early stages of their growth. Consequently, creators of economic policy worldwide are interested in the processes of their formation, establishment and growth in order to improve their survivability. Variations in the innovativeness of these firms may help explain why some succeed, while many fail (Frambach, 1993). For Yap and Souder, crucial question is how small firms to remain innovative while face scarce resources and have little market influence. The answer, while obfuscated by a relative paucity…show more content…
In his definition, “something new” is introduction of novel product or service, improvement or modification of existing one. Slow moving business environment cannot result in innovation. Innovation is dynamic process performed by organizations successfully involved in management of internal and external, driving or impeding factors (Tiwari and Buse, 2007). The three stages of the innovation process are the concept, the implementation and the marketing. The concept stage encompasses idea generation, idea evaluation and project planning. The implementation entails design, prototyping and testing, while the marketing stage is made of initial production, market roll out and market penetration (Fabian and Schmidli, 2005). Consequently, the research and development department is fundamental actor of the process. However, it is far to be the sole “culprit” for it, since successful innovation requires coordinated efforts of all parts of a company, particularly if it is of small or medium…show more content…
The innovative products can help the businesses in strengthening their competitive position at the foreign markets (Boutellier at al., 2000). The innovative ventures bring novel or improved products or services and promote efficient manufacturing, distribution and marketing, necessary for “going-abroad”. On their own market, businesses count on their established product line and enjoy the advantage of direct feedback and information exchange with customers. However, to achieve this level of customer intimacy that allows design of products closer to their needs is difficult on the foreign markets. On these markets, there is indigenous demand based on the local tastes of the consumers. To meet this adequately, companies need to study the overall social context, too. Rovira, Nordman and Melen (2008) showed how various combinations of the technological and international knowledge affect the firm’s behavior when discovering foreign market opportunities. In these terms, the flat organizational structure that prevails in the case of small businesses creates additional provisions for innovation. This is true, particularly in comparison with large vertical organizational structure of powerful, yet slow multinationals. Innovation proliferates faster in the small businesses. This results in significant flexibility and short response time, virtues that large

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