[Innovation-interest to marketing]

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Innovation-interest to marketing

Introduction

Purpose of the Thesis

The main purpose of this thesis is to make an analysis on the Drucker's theory of innovation, and discuss the importance of innovation in the market.

Significance of the Thesis

This thesis is helpful for the students in order to get a clear picture about the concepts of innovation, and its main principles and sources. This thesis is helpful for the students in order to discuss the importance of innovation for marketing.

Literature Review

Several authors, experts have defined the concept of innovation, there are multiple definitions of a concept that is seemingly simple yet ambiguous, and a large majority of definitions come from the definition promulgated by the Austrian economist Schumpter innovation in which 5 cases covering the following:

1.Market introduction of a new, good or service that consumers are not yet familiar.

2.Introduction of a new production method or organizational method.

Drucker's Innovation Theory

The first lens through which to consider program development and persistence is Drucker's (1985 a, 1993) theory of innovation opportunities. Drucker devoted a lifetime to researching the concepts of innovation and entrepreneurship and found that innovation is the instrument of entrepreneurship. Through examination by the scholarly community and through the experiences of practitioners, Drucker's principles and theories have stood the test of time. He derived and tested his theory about innovation and entrepreneurship from 2 years of observation of various for- and non-profit organizations (Chesbrough, 2003, p. 45).

According to Peter Drucker's Innovation theory, Innovation is one the means through which an entrepreneur tries to exploit a change for creating new business opportunities and providing new services. The entrepreneurial organizations try to fulfill consumer's needs and create a niche market. Drucker states innovation is one the most important function of entrepreneurship, which could be a new venture, a change in existing business or public services (Chesbrough, 2003, p. 5). It is a way through which an individual or an organization creates resources that are more enhanced in fulfilling customer's needs. According to Drucker, innovation is the real work in any organization and it should be managed like all the other function of an organization.

Sources of innovation

Innovations come various sources. Majority of the innovations are a result of conscious thinking, determined search for innovative opportunities that could only be identified in certain situations. These sources of Information are divided into two categories: Internal and external source of information.

Internal Sources of Innovation

Four internal sources of innovation were conceptualized by Drucker (1985a, 1993). First, innovations can be generated from unexpected successes or failures within an organization. For example, a new invention designed to suit one situation might not be successful, but another use for the invention is discovered. Second, innovations can stem from gaps between what exists and what is needed (Gassmann, 2006, p. 223). A third source of opportunity for innovation is from an outgrowth of process needs. Simply, employees may work around a problem or inconvenience until the opportunity for an innovation is seized. Fourth, industry and market changes can provide opportunities for ...