What is innovation?

Innovation is the action or process of innovating. Innovation is not invention; it is use of a better and novel method, but not a creation of something new. One common example is technological innovation: use of technology to do something in a better way.

Innovation-strategy is to perform and grow using improvements as a tool to enhance efficiency, effectiveness, quality, and market share. This strategy adds value to an organization by changing old practices and methods with new ones.

Why businesses use innovation-strategy?

Businesses use innovation strategy to acquire or sustain competitive advantage.

Having and sustaining competitive advantage is a matter of survival for businesses. Presently, businesses increasingly focus on innovation; the obvious reason is increased and continuously growing competition in the business world. Moreover, after becoming lean and cutting cost to the extreme, businesses do not have many options to choose from the short list of actions for achieving competitive advantage. In economic downturn, business may innovate at business and corporate levels to build competitive advantages over its competitors.

In macro environment around a business, many factors demands for a strategy to innovate. Such demanding factors include trends as increasing focus on new technologies, changing government legislation on various sectors including health, and changing landscape of banking sector, etc. These trends require significant change and innovation from business.

In economic downturn, business may innovate at business and corporate level to build competitive advantages over competitors