Challenges of Innovation in Business

PORTFOLIO ELEMENT 1: ESSAY

Innovation emerges out as a major challenge for several companies. Prajogo (2016) pointed out the fact only 6% of managers are actually satisfied with their innovation. In general terms, innovation, and especially the one of disruptive kind, is different from what companies are used to doing most of the time. Rather than actively researching for innovative models of business and product, several companies concentrate on making slow incremental improvements in various parts of the business operation. The mansion intervention is highly illogical as it is focused on scaling the existing business and investing in projects that make the company successful, embracing limited risk, and making the results predictable (Visnjic, Wiengarten and Neely, 2016). The challenge in the mentioned context is a disruptive innovation involving innovation, compared to the slow changes and hence cannot be managed the same way making it difficult for the companies to sustain innovative processes in the long run. A concept to understand here is innovator's dilemma, a theoretical framework that explains the reason for failure for most of the business organisations. Any innovation, and especially disruptive innovation, is inferior to the existing services and products within the market. This statement holds as product improvement demands a lot of time and several changes, making the value of the customer at this point minimum and at the bottom of the curve. Rangus and Slavec (2017), pointed out the fact that innovation is hard making it difficult for the companies to accept change.

When it comes to assessing capabilities of the business organisation, lack of talent and skill coupled with the ability to execute ideas are prime barriers to innovation. New initiatives are supported by the people who work within the organisation. In absence of appropriate capabilities, it becomes harder to achieve the desired result (Shakeel et al. 2020). Innovation is not about creating better profit margins, rather it is about creating value. It is important for the team members to consult people with necessary skills and conduct the business. Cultural challenge is perceived as a primary challenge in successful innovation as it is one of the slowest paced things to change, deeply engraved among the employees. Creating a culture that embraces innovation demands proper guidance and skills with the shift of mindset that reflects these possible values. For example, Amazon works on cultivating a corporate culture and employees are allowed to learn from experimentation. The company is removing possible barriers by saying yes to the ideas produced by the employees. If someone says an idea won't work, it unblocks the process of development and that person has to do all the work regarding that idea. Lack of suitable leadership is perceived as an additional challenge where innovation is not treated as a priority. Unless the manager is actively involved in removing the possible barriers that may hinder the growth of innovation, it becomes difficult to make progress (Pilav-Velić and Marjanovic, 2016). Without the right kind of infrastructure for implementing the innovative idea, the right process for making final decisions and communication channels is narrowed down to limited possibilities, making it difficult to implement innovation. Organisational structure with high command and control leadership style fields to innovation as they have several layers of management with people having a small span of authority under working independently. Teams working on innovation need to move fast and embrace the environment while making independent decisions. Becoming an innovative organisation demands a holistic and disciplined approach. It is not enough to do well in one area as the business needs to have a few things to be on the right in order to gain success and innovate consistently (Bouncken, Kraus and Roig-Tierno, 2019).

The business needs to embrace a proactive measure to ensure better understanding about the innovation and the possible ways that can be sustained. All in all, innovation and particularly the one of problematic kind is not quite the same as what organizations are accustomed to doing more often than not (Zhu et al. 2019). Instead of effectively looking into inventive models of business and item a few organizations focus on making moderate gradual improvement in different pieces of the business activity. The chateau mediation is profoundly nonsensical as it is centered on scaling the current business and putting resources into ventures that make the organization fruitful, grasping constrained rest and making the outcomes unsurprising. The test in the referenced setting is a problematic advancement including development, contrasted with the moderate changes and henceforth can't be dealt with in a similar way making it hard for the organizations to support imaginative procedures over the long haul. An idea to comprehend here is trailblazer's issue, a hypothetical system that clarifies the explanation behind disappointment for a large portion of the business associations. Any advancement and uncommonly problematic development is second rate compared to the current administrations and items inside the market. This announcement holds as item improvement requests a great deal of time and a few changes, making estimation of the client now least and at the base of s bend. Exposito and Sanchis-Llopis (2018), called attention to the way that advancement is hard making it hard for the organizations to acknowledge change.

It can be conclusively stated that strategic alignment is important as it treats scope to concentrate on the relevant things while advancing the overall business strategy. Santos et al. (2018), pointed out the fact that business units and employees need to work towards a common goal irrespective of the role of an individual employee. Developing a repeatable approach to create innovation in an organisation demands few work while involving a method of trial and error irrespective of how good the company was. Through the implementation of a systematic approach while focusing on the right things to do one can develop a scalable approach for ensuring continuous innovation irrespective of the current level. However, relevant suggestions that having more concentration incline towards the course of innovation can cause a shift of concentration of the business from the core competencies (Lages, 2016).

Portfolio Element 2: Report and Presentation

Presentation

Refer to the ppt

Report

PESTLE Analysis

Amazon emerges out as an E-Commerce business with several customers to serve. The company needs to face political influences and activities of the government which can further influence business success. Political stability can influence The E-Commerce business Amazon in developing countries such as India, with the political framework supporting the local retail business (Loon and Chik, 2019). However, political scenarios can create threats for the business. The European Union investigated the business regarding the use of retailer data to sell on this common marketplace. Amazon was found guilty, they can be subjected to severe consequences leading to a poor brand image of the company and hampering the scope of profitability. Political per government law for the eCommerce business were highly effective in India. Government support companies like Amazon due to the use of investment, however, they still need to comply with the government regulations which are sometimes very strict. This political factory image is a thread when it provides the much-needed support to the competitors. For instance, the Chinese government supports the Chinese E-Commerce companies within their country (de Vasconcelos Gomes et al. 2018).

Amazon aims to grow fast with positive economic conditions in the areas where it runs its business. Retailing is the possible way a producer offers the products and services to the consumer. Consumers purchase from retailers at any condition and retail business survive despite poor economic conditions. The disposable income of the consumer is likely to increase creating a great scope for Amazon. Increase of disposable income means that the consumers can shop as per their choice providing companies like Amazon a scope to expand the business operation for increasing the market share and brand presence (Khajeheian, 2016). There is no doubt that Amazon is an advanced technology company subject to criticism for offering limited employment opportunities while making use of technology wherever possible. Economic recession is another macro environment factor that influences the business carried out by Amazon. For instance, the Chinese economy is falling these days and the Chinese recession is perceived as a threat for Amazon as China is one of the main markets where Amazon wishes to penetrate. The retail industry creates scope not only for Amazon but for other business organisations operating within the industry, creating competition for Amazon. For example, Walmart is increasing its online presence to not only compete with the giant E-Commerce business Amazon, but improve their profit margins (Zhang, Zhao and Xu, 2016).

The social trends, behaviour and factors influence the performance of Amazon, both in positive and negative ways. The convenience of online shopping and at home delivery make the people lazy allowing them to stay at home and weight the Amazon delivery system to take care of everything, like food items, streaming of movies and essential commodities. Staying at home and eating unhealthy food affects the health of the citizens irrespective of their age (Zhang and Walton, 2017). The government is under immense pressure to take the requisite steps to improve the lifestyle of every citizen. The younger generation is enthusiastic and crazy for shopping through online media. The event of online was further fuelled by the increased ratio of mobile devices and easy access to the internet. The senior citizen with mobility issues can use Amazon for their shopping facility. Online shopping has emerged is a trend more than a necessity. Amazon can possibly make use of this opportunity to expand its business and reach a very good amount to people (Long, Iñigo and Blok, 2020).

Most importantly, technology is a backbone for Amazon and it makes a company the most profitable company in the industry. Amazon is focusing in terms of cloud computing to satisfy the customers. The business is looking for innovative ways to implement technology to the fullest for the delivery system. In America the company makes use of unnamed aerial vehicles also termed as drones to deliver packages (Brand and Blok, 2019). However cybercrime is the major threat to Amazon and the full business model is on stack. Third party sellers and even the customers have sensitive information about the credit card on the Amazon website.

Amazon Inc successfully registered pressure from the stockholders and investors to disclose information relevant to the environmental impact created by the company through the business operation. The business additionally commented that it will work on disclosing such information later. One more challenge is to estimate the emission rates from the E-Commerce business. There is no doubt that making online orders demands less consumption of energy then driving to stores to buy or pick groceries. Amazon is exploring the possible ways to make half of shipments, emission free by 2030 (Byukusenge, Munene and Orobia, 2016). Amazon business operations need to comply with existing state of regulations. Given the series of laws can influence the businesses discrimination law consumer protection law data protection law antitrust law and laws for conducting E-Commerce businesses. Counterfeit products are important and in great demand of the customers. This can be termed as a scope for the business to increase the effort and reduce the counterfeit sales on the platform. Amazon has developed an anti counterfeit policy and rightly implemented it for better business outcomes. Various consumer privacy acts are a developing threat within the macro environment (Vorbach, Wipfler and Schimpf, 2017). Another legal factor which is the general data protection regulation influences Amazon and similar companies which work on collecting customer data suggest email ID Bank information and name. The consumer data needs to be protected which can lead to shift of concentration from core competencies leading to loss in business.

Swot analysis

Strengths	Weaknesses	Opportunities	Threats
Low cost structure with large merchandise and huge number of third party sellers	The business model initiated by Amazon is common over the digital platform, so copying the digital business model of Amazon for the rival firm is easy	Amazon can gain immense scope to expand the existing business in developing markets	Threats from the government of developing economies such as China
Following the low cost leadership strategies creating synergies between the marketplace and the company	Losing margins in various areas such as India is fairly common. Free shipping to the customers can be quoted as a prime reason that exposes the risk of losing market in developing economies such as India	By establishing physical presence, Amazon can improve the level of competitiveness against other retailers, engaging customers with the brand
The brand has immense value ranking after Apple and Google with a brand value of $125 billion	The product flop and failure are an indispensable part of Amazon where products such as Kindle Fire did not give the expected result	Amazon has the scope to improve the existing technological measures to reduce counterfeit of the products
It is highly customer oriented and meets the need of the customers through innovation	The tax avoidance controversy in US, UK, and Japan created negative publicity for Amazon leading to poor brand image
Amazon brings creative and innovative ideas in the production service line making ambitious drone delivery services creating differentiation from other companies	Limited retail or physical presence hinders the customer attraction for things which cannot be sold on online platforms
The organisation is involved in three businesses such as the marketplace, Amazon Web Services, and Amazon Prime, which support one another as a whole, generating mass amounts of profit and competitive advantage for the company	No presence of physical stores
The superior logistics and distribution system is highly efficient in the case of Amazon with fixed time for delivery	Easily imitable business model

Portfolio Element 3: Reflection

Scanning the environment is vital as it equips the business organization to the rapid changes taking place in the industry, with a major impact on the business firm. Analyzing the environment within which the business operates can help in identifying the possible strength, weakness, and opportunities coupled with threats. I feel that the prime motive of analyzing business environments is to identify the possible potential factors that suggest economic, social, cultural, technological, demographic, and legal entities while analyzing the operating environment of the business on an internal level which include the suppliers, customers, and competitors.

Due to the emergence of globalization and the possible influence of the same over the business around the world, businesses are subjected to various challenges and issues. The process of decision-making within the business has taken up much time on analyzing the business from different perspectives on a continuous basis. Irrespective of the liking exhibited by the managers, global businesses such as Amazon face a series of challenges due to developing economic conditions in certain countries. For the same reason, the managers, who are the decision-makers of the business, need to purchase earth or understanding on evaluating the possible changes within the business environment so as to sustain in the competition and run along with their competitors.

I perceive that decision-makers do fail to analyze and understand the decision in the business environment resulting in wrong outcomes regarding their respective businesses. Due to failure in respective business decision-making, it could adversely influence the growth of the business. I perceive that the prime objective of Amazon is to increase their profit margin while making use of the available resources. Hence, the decision-makers or the managers in business entities are under tremendous pressure to develop a proper business strategy and achieve the organizational objectives within a stipulated time. Hence, managers can make use of PESTLE to analyze the business environment within which they are working. The managers are well-versed with the existing external and internal environmental factors which could possibly influence the business operations of Amazon; then they can develop a suitable strategy.

Reference List

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