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Jubilee Christian Academy

Senior High school Department

School Year 2019-2020

Student Reference No. 2

Entrepreneurship and Innovation

Entrepreneurship and Innovation


Object of Innovation - What is being innovated?

1. Product innovation: Products concern both material products and intangible services such as services
that meet customer needs and are thus acquired by the customer. With product innovations, a company
earns its money and tries to differentiate itself from the competition.

2. Service innovation: service innovations are like product innovations when it comes to selling them
directly to the customer, e. g. insurance or management consultancy. Even if services are not actively
sold, as in the case of manufacturing companies, each company still provides services to its customers, for
example in logistics, complaints, sales advice, etc., even if they are not actively sold. This is also where
innovation comes in when it comes to differentiation and customer enthusiasm.

3. Business model innovation: The business model is the way a company functions and earns money.
The business model innovation encompasses innovations in strategy, marketing, supply chains, value
creation, pricing or cost structures.

4. Process and technology innovation: As the name implies, these are technological innovations, such as
the creation of products and services. In principle, they are also process innovations. These include, for
example, production processes or IT technologies for apps. Product innovations, quality improvements or
cost savings often go hand in hand with process and technology innovations.

5. Organizational innovation: Organizational innovations affect the process and organizational
structure. These can be organizational process innovations or management innovations, e. g. new tools for
measuring customer satisfaction or optimizing delivery processes to reduce costs.

6. Social innovation: Social innovations are innovations where the benefit lies with society and the
purpose is not primarily profit. Examples include innovation in education, poverty reduction, equal
opportunities and health.

7. Environmental innovation: All innovations that contribute to improving the environment are
environmental innovations. This concerns for example environmentally friendly products, contributions to
environmental protection or the avoidance of emissions.

An innovation can affect several innovation subjects at the same time.
Types of innovation

1. Incremental Innovation

Incremental Innovation is the most common form of innovation. It utilizes your existing technology
and increases value to the customer (features, design changes, etc.) within your existing market.
Almost all companies engage in incremental innovation in one form or another.

Examples include adding new features to existing products or services or even removing features
(value through simplification). Even small updates to user experience can add value

2. Disruptive Innovation

Disruptive innovation, also known as stealth innovation, involves applying new technology or processes
to your company’s current market. It is stealthy in nature since newer tech will often be inferior to
existing market technology. This newer technology is often more expensive, has fewer features, is harder
to use, and is not as aesthetically pleasing. It is only after a few iterations that the newer tech surpasses
the old and disrupts all existing companies. By then, it might be too late for the established companies to
quickly compete with the newer technology.


Apple’s iPhone disruption of the mobile phone market. Prior to the iPhone, most popular phones relied
on buttons, keypads or scroll wheels for user input. The iPhone was the result of a technological
movement that was years in making, mostly iterated by Palm Treo phones and personal digital assistants
3. Architectural Innovation

Architectural innovation is simply taking the lessons, skills and overall technology and applying them
within a different market. This innovation is amazing at increasing new customers as long as the new
market is receptive. Most of the time, the risk involved in architectural innovation is low due to the
reliance and reintroduction of proven technology. Though most of the time it requires tweaking to
match the requirements of the new market.


In 1966, NASA’s Ames Research Center attempted to improve the safety of aircraft cushions. They
succeeded by creating a new type of foam, which reacts to the pressure applied to it, yet magically
forms back to its original shape. Originally it was commercially marketed as medical equipment table
pads and sports equipment, before having larger success as use in mattresses. This “slow spring back
foam” technology falls under architectural innovation. It is commonly known as memory foam.

4. Radical Innovation
Radical innovation is what we think of mostly when considering innovation. It gives birth to new
industries (or swallows existing ones) and involves creating revolutionary technology. The airplane,
for example, was not the first mode of transportation, but it is revolutionary as it allowed
commercialized air travel to develop and prosper.


• Improvisation is the art of spontaneously creating something without preparation.
• Improvisation is connected to the mindset because it helps us to develop the cognitive ability to
rapidly sense and act as well as change direction quickly.

Entrepreneurs may begin with a certain idea or direction, but obstacles such as limited resources,
environmental conditions, or a changing mindset can prevent them from executing their initial plans. This
means they need to find a way to quickly adapt to their circumstances, think on their feet, and create new
plans to realize their vision.

The “Yes, and” Principle.

The most useful improvisation exercises to address fear of being shot down.
This means listening to what others have to say, and building on that.

Sample Scenario:

Peter: “I have a great idea for a healthy dried fruit snack for kids that contain less sugar than any other
brand on the market.”
Teresa: “Hasn’t this been done already? The market is saturated with these kinds of products.”
Sami: “I think it’s an interesting idea but I’ve heard that these products cost a fortune to manufacture and

In this conversation, Peter has barely touched upon his idea before it gets shot down by the others. Peter
may not be conscious of it, but the reaction from his friends changes his mindset from positive to
negative, instantly limiting his freedom to expand the idea further. Rather than offering their assistance,
Sami and Teresa rely on judgment and hearsay rather than helping Peter to build on his idea.

However, the “Yes, and” principle does not allow for the negative words such as “no” and “but” as the
following conversation illustrates.
Peter: “I have a great idea for a healthy dried fruit snack for kids that contain less sugar than any other
brand on the market.”
Teresa: “Yes, and each snack could contain a card with a fun fact or maybe some kind of riddle.”
Sami: “Yes, and if enough cards are collected you can go online and win a small prize.”

By using “Yes, and,” Peter and his friends have managed to expand on his original idea and injected a bit
of positivity into the conversation.

Source: Neck, H. M. (2010). Idea generation. In B. Bygrave & A. Zacharakis (Eds.), Portable MBA in
entrepreneurship (pp. 2752; Figure on p. 38). Hoboken, NJ: Wiley.