MEI609 Study Guide
Unit 2: Innovation and Growth
2a. Articulate methods for innovation to promote organizational growth
- How can an entrepreneur use creative methods to innovate?
- Why is innovation important to the entrepreneur?
- What is the difference between linear and lateral thinking?
Innovation is the combination of a new idea and the execution of the idea. It is based on three things: the idea, the execution, and the meeting of market needs. Market needs can be known or unknown. Innovation is a key factor to success in any entrepreneurial business because it can help create new ideas, methods, and processes for improvement.
Companies do many things to develop an idea, including the use of the empathetic design cycle, which is human-centric. This cycle focused on empathizing, defining, ideating, prototyping, and testing new ideas. Some companies use a method known as the Six Hats Thinking method to develop new ideas because it forces structure on a discussion where ideas can be discussed creatively. When considering creativity, it is important to note there is linear thinking, which focuses on a step-by-step approach, and lateral thinking, which is focused on creative thinking. Both have a place when companies innovate.
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2b. Correlate business life cycles and how to translate these life cycles into organizational growth
- What is a lean startup?
- What are some options companies can apply to pivot when needed?
- How does the business lifecycle relate to the product lifecycle?
Lean startup is a methodology to help with innovation, by allowing an entrepreneur to continuously test their products and get feedback from customers in real-time. Entrepreneurs are able to get feedback from customers early on in innovation by designing a minimum viable product (MVP), which helps customers understand what a product will be and can consist of sketches and videos. Early adopters are those people who like to try new products as soon as they come out, so often, MVPs are tested with early adopters. Often, companies will use a lean startup to pitch an idea. Pivoting is the idea to change quickly based on market needs.
The main reasons for business failure include marketing, management, financial issues, and lack of innovation. The Lean Model Canvas is a tool that can be used to outline the merits and details of a potential idea.
The business lifecycle consists of birth, growth, maturity, decline, and rebirth or death. This is different from the product life cycle, which is for a specific product and focuses on four steps, which include the introduction of a product, growth of a product, maturity, and decline phases. The relationship between these two is that the product lifecycle directly impacts the phase of the business lifecycle for most businesses.
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2c. Apply the appropriate growth strategy for the business environment
- What are the ways companies use to grow?
- What are the challenges associated with each growth strategy?
- How can a company apply core competencies for growth?
There are many ways startup businesses can grow. These include methods such as buying out another company and cooperation with another company, such as licensing. Companies also grow through innovation. Some of the challenges associated with growth include incompatibility of growth strategy and organizational culture, incorrect marketing, human resource, or finance strategies, inadequate or incorrect internal accounting, and dependence on third parties.
The important building blocks for innovation, resulting in growth include core competencies. A core competency is a mix of skills, abilities, and resources that provide a competitive advantage.This should provide access to a wide variety of markets, help with the perceived benefit of the end product, and be difficult to imitate.
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Unit 2 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- core competencies
- early adopters
- innovation
- lean startup
- Lean Model Canvas
- pivoting