Question

What are the main factors affecting innovative performance?

Answer 1

The main factors that can affect innovative performance are:

- the degree of variation from the old to new- This factor implies on the level to which the innovative product or service is different from the old product that the customers were already using and were comfortable in using. If the variation is higher then the innovative performance can be less as the customers will not adopt the innovation easily.

- The synergy of innovation and firm. The innovation should be able to fit in the firm's competencies as if the new product or service should be maintained by the firm in a managed way. The resources, promotional activities and duration required for the innovation to be adopted in the market should be given by the firm for the success of the innovation.

- coordination and teamwork in functions- The process of innovation in the service industry is more uncertain and variable compared to the manufacturing industry. Thus the performance of innovation will also vary according to the industry and the type of work it does.

- The degree of importance to the innovation activity- The resources put into the innovation and the strategies made for the same define its success. For example, the number of employees, the time and finance utilised in the innovation strategy shows its importance for the firm.

- Market competition- The innovation could be a new aspect for the firm but would have to face a very tough competition in the market as products or service of the same potential may already be in use in the market by the customers. Hence making a place and creating demand for the innovation will depend on the market forces.

- Quality and advantage of innovation- The use and the quality which the innovation brings to the customers and society also defines its success. An innovation which is more advantageous will bring in more demand and adaptability hence better performance for the firm.