9.2 Innovation (AQA A Level Business): Flashcards
Exam code: 7132
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What does innovation bring to a business?
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What does innovation bring to a business?
New products for customers and new processes that lead to greater efficiency.
Define incremental innovation.
Incremental innovation is the gradual, small-scale improvement of products, services or processes over time.
Define disruptive innovation.
Disruptive innovation is developing a significantly changed or entirely new product that disrupts the existing market.
Define product innovation.
Product innovation is creating a new good/service, or clearly improving an existing one, to meet customer needs better.
Define process innovation.
Process innovation is a new or improved way of making, delivering or supporting a product that raises efficiency, cuts costs or improves quality.
Give two ways innovation helps a business.
It keeps the business ahead of competitors and improves profits (also reaches new customers and markets).
Give two pressures on firms to innovate.
Intensifying competition and changing customer preferences (also tech advances, cost targets, capacity needs and compliance).
Name the four ways firms innovate.
Kaizen, research & development (R&D), intrapreneurship and benchmarking.
Define Kaizen.
Kaizen is making many small, everyday improvements suggested by employees at every level.
Define intrapreneurship.
Intrapreneurship is encouraging employees to think and act like entrepreneurs while staying inside the organisation.
Define benchmarking.
Benchmarking is comparing the firm's products, processes or performance with industry leaders or best practice.
What do intellectual property rights (IPRs) protect?
Inventions, creative works and some specialised processes from being copied.
Name the three main types of intellectual property right.
Copyrights, patents and trademarks.
What is the difference between copyright and a patent?
Copyright protects original creative works (automatic on creation); a patent gives exclusive rights to an invention (filed with the patent office).
Why do businesses often settle IPR disputes out of court?
Pursuing breaches in court is expensive, with significant costs if the complaint is lost.
Kaizen involves making many small, everyday suggested by employees.
Kaizen involves making many small, everyday improvements suggested by employees.
True or False?
Process innovation refers to creating brand-new products for customers.
False.
That is product innovation; process innovation improves how products are made or delivered.
True or False?
A patent must be filed with the patent office, but copyright begins automatically when a work is created.
True.
Copyright protection starts on creation with no registration; a patent must be formally filed with the government patent office.
How can innovation help the marketing function?
It creates fresh products and adverts, makes digital promotions more personal, and keeps the brand relevant.
Give one drawback of innovation for marketing.
Frequent updates cost time and money, messages can become unclear, and rapid changes may annoy loyal customers.
How can innovation help the finance function?
It adds new income streams, lifts margins by cutting costs, and can increase business value and access to funding.
Give one drawback of innovation for finance.
Large up-front spending on R&D and equipment; cash flow may worsen first, and failed ideas still carry development costs.
How can innovation help human resources?
It boosts staff creativity and morale, offers clear R&D career paths, and keeps the workforce adaptable through training.
Give one drawback of innovation for human resources.
Hiring specialists and training is expensive, constant change raises stress/burnout, and staff may leave if ideas are ignored.
How can innovation help operations?
New methods reduce waste, speed up output and cut unit cost, improve quality/safety and give clearer inventory control.
Give one drawback of innovation for operations.
Machines/software are costly and disruptive to install, and staff need time to learn new systems (early mistakes rise).
Innovation can add new income streams, but often requires large spending first.
Innovation can add new income streams, but often requires large up-front spending first.
True or False?
Innovation only ever benefits a business's functional areas, with no drawbacks.
False.
Each area also faces drawbacks — such as high costs, disruption during installation and added staff stress.
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