Contextual Factors of Entrepreneurship and Innovation

Question: Discuss about theContextual Factors of Entrepreneurship and Innovation. Answer: Introduction: All across the world, enterprises are experiencing a revolution. The international competition has become fierce, costs of materials and energy are rising, new technologies are being developed and there is an increase in the use of computers and automation. All these developments pose serious challenges and demand a positive response from the management as well as the entrepreneur for the enterprise to survive and also prosper. Thus, the need for entrepreneurship and innovation has turned out to be more pressing today than ever before and the rewards for successful processes and products are high. In light of this fact, this essay will give an overview of entrepreneurship and innovation, discussing their significance and how they can enhance the performance of the supermarket retailer Woolworths and find out the practical implications by actually applying it in business settings. Overview of Innovation and Entrepreneurship The past two decades have seen innovation becoming a major driving force for not only the survival of businesses but also in giving shape to competition. It is a process which is responsible for turning the best ideas into reality. Creative ideas are triggered by innovative events resulting in a number of innovative events. Innovation usually occurs at three different levels which are revolution, renewal and resilience (Hamel Vlikangas, 2003). Revolution is the creative destruction path that the other competitors utilise to change the industry fundamentals. Resilience is continuously reconstructing by working on behaviours, processes and values. For staying in businesses today, companies need to be resilient. Renewal on the other hand forms refers to the change with respect to an incumbent in the industry, rethinking along with the business model that exists. Renewal is the key strategy for the firms as they look forward to get past their competitors by introducing new approaches of business by bringing in changes in the way the business is being operated. Ultimately, the company dreams of becoming a revolutionary by changing the entire industrys nature. The nnnovation that follows can be sustaining, disruptive, open or closed. Innovation involves taking risks, providing solutions that are non-standard, unconventional practices of teamwork and all these cannot be managed easily by formal systems of control and hence organisational structure and effective cultural management is crucial for mobilisation of creativity as well as innovation in the organisation (Tushman, Smith, Wood, Westerman, OReilly, 2006). The entrepreneurs are defined more by what they are able to achieve rather than what they are. They make use of innovation for exploiting or for creating changes and opportunities with the aim of making profits (Burns, 2008). It is the foremost mindset for identifying an opportunity and pursuing it for producing economic success or newer values. Executives who are successful possess the learning regarding mastering uncertainty by means of their entrepreneurial leadership skills (McGrath McMillan, 2000). Five main elements are present which include creation of a climate that provides support to constant searching for opportunities, framing, stocking a register of opportunities, focusing, and promotion of adaptive execution. Sound knowledge of the markets along with the products and services that are driven by the customer demands are the best predictors regarding the success of a new business (Garvin, 2004). Assessment of Innovation and Entrepreneurship Entrepreneurship and Innovation is important because they lead to the creation of new ideas. The process of innovation also transforms the new ideas into the ones which create value. Innovation is not possible without being creative. Innovation as a process is significant to the organisation as it is able to combine both ideas and knowledge to form a new value. In the absence of innovation and entrepreneurship, the organisation and whatever is provided by it become obsolete rapidly. Entrepreneurial activity is dependent on the innovation process (Thompson, 2001). It is usually said that retail never stops moving. Retailers have always provided services to consumers who have not only craved more but have also provided services that are cheaper and of better quality and they have the willingness to go anywhere in order to get it. Although the retail of today is vastly different from the time it started, the need for being able to differentiate in the face of competition by means of innovation is asimportant today as it was earlier. The growth in the significance of e-commerce led to the creation of a storm for the brick-and-mortar retailers. In order to succeed in such a scenario, the options before the retailers was increasing the number of times the consumers visited the stores, increase their basket size or do both these. This needed innovative strategies by the retailers (European Commission, 2013). Innovation is highly significant wherein the same range of products is offered by all the grocery and mass retailers like Woolworths which makes switching over to the competitors easier for the consumers. Through innovation, Woolworths will be able to gain an edge in price value, shopability, assortment or choice, convenience and also in driving brand equity. Entrepreneurship and innovation capture the attention and interest of the consumers and thus not only bring in the customers who are new but also increase the loyalty of the existing customers. However, competitors can copy innovation quickly and hence in order to stay ahead in the race, continuous innovation is essential. Entrepreneurship and innovation has become all the more significant for Woolworths as recently the group posted a half-year loss of $972.7 million due to the brand challenges and the rise in the levels of competition in the sector of supermarkets from both local as well as international rivals. In such a scenario it is vital for the organisation to recapture its innovation spirit and also maintain its focus on the customers (Cameroon, 2016). The company realises that innovation can be driven by issues related to the environment and society. The reason for this is that customers want to have an increased understanding regarding where the products are coming from so that they are sure that the products are ethically sourced and cannot cause harm to the environment. Innovation is thus also important for integration of sustainability into the day to day activities of the organisation (Woolworths, 2010). Enhancing the Business Practices by Using Entrepreneurship and Innovation Innovation is regarded among the most significant sources as far as sustainable competitive advantage is concerned in an environment that is changing rapidly as it results in the improvements of processes as well as products, helps in making constant advancements which increases the chances of the firms survival, allows the firms to register rapid growth, increases their efficiency and finally attains more profitability in comparison to the forms that do not innovate (Bartel Garud, 2009 ; Jimenez Sanz-Valle, 2011; Standing Kiniti, 2011). In order to be successful in the long term, Woolworths needs to go in for enhancement of business practices with innovations that are sustainable. Sustaining innovations target the high end as well as the demanding customers with performances which are better than the ones that were available prior to it. These innovations are incremental year after year and are developed by all the good organisations and presented to their customers. These innovations might be technologically very difficult but still the organisations divert the resources and provide proper training to the employees for adopting it. For winning the battle of sustaining technology, against the competitors, Woolworths needs such sort of innovations. Such a strategy will involve products which are better and which can be sold to the consumers at profits that are high. This will help the business to bring improvements in its quality, effectiveness and outcomes (Christensen, Raynor, McDonald, 2015). Similarly, the adoption of entrepreneurship and innovation by Woolworths should be in such a manner that it enhances the business practices of the company. It can be used for improving the quality and effectiveness as well as the outcomes of the business. The supermarket retailer can either create new products or bring in qualitative improvements in the products that are already in existence they can develop new sources of procuring the raw materials through innovations in its value chain (Vyas, 2009). It can also go for acquiring and building upon technological competence that is distinct. The transformation of the resources that are possessed by the company can take place by the use of innovative capabilities (Therrien, Doloreux, Chamberlin, 2011). Alternatively, the company can also come up with new ideas which will facilitate the launching of new products (Rubera Kirca, 2012). In recent years there has been a growth in the concept of onmichannel retailing wherein the effort is made to integrate the store channel and the online channel for propelling the growth of business. This innovation has been critical for the creation of customer experiences that are consistent across the different channels. Although Woolworths had started with this innovation, it has to make further progress as along with enhancing the shopping experience of the customers, the availability of the wider variety of products and more discounts can increase the effectiveness of the company (Team, 2015). Shoppers can be persuaded to do something different through entrepreneurship and innovation. They can be persuaded to change, to move, to try or to buy something new. It will enhance the business practices by offering the consumers with new things (Johannessen, 2008 ; Mumford Licuanan, 2004). These are among the various options available to the company for enhancing business practices through entrepreneurship and innovation for keeping its customers happy. Practice or Application of Entrepreneurship and Innovations in Business Settings In order to be applied successfully in business settings and achieve success, the process of innovation needs to be an open one. This means that the firm should be in a position of commercialising external as well as internal ideas by the deployment of both in-house as well as outside pathways to the market. The business should be in a position of commercialising internal ideas by means of the channels which exist outside of the business that they currently have so that they are able to generate value for themselves (Chesbrough, 2003). To apply entrepreneurship and innovation in the settings of business, it is important that a strategy is in place. The strategy in such cases is asset of mutually reinforcing along with coherent policies which are aimed towards the achievement of a particular competitive goal. Alignment is promoted among the organisations diverse groups by means of a good strategy. It also helps in the clarification of priorities and objectives and helping in focusing the efforts surrounding them. It is essential for the company to define its overall strategy of business and also specify the way in which the different functions of RD, finance and operations will provide support to it. In the absence of a proper strategy of innovation, it will be difficult to apply innovation as the various parts of the organisation may end up having priorities which are conflicting even in the case a clear strategy related to business might be present (Pisano, 2015). Conclusion The easy accessibility to the internet along with opportunities it gives for trying things signifies a continued evolution in the market as a result of entrepreneurship and new innovations. The large retail outlets like Woolworths that are well-organised possess a huge headstart as they are already aware of how to understand their customers habits related to shopping and building of trust and also deliver value through the leverage of the buying power of their own. The inclination of a firm towards innovation is of great significance in competitive environments for obtaining high degree of competitive advantage (McAdam and Keogh, 2004). However, the main fact that Woolworths needs to keep in mind is that irrespective of the technological changes that might take place in future, it has to always maintain the focus on the consumers while innovating in order to enhance its business practices. Hence, the focus has to be on the customers and they have to be kept satisfied. References Bartel, C., Garud, R. (2009). The role of narratives in sustaining organizational innovation,. Organization Science , 20(1), 107-117. Burns, P. (2008). Corporate Entrepreneurship: Building the Entrepreneurial Organisation. New York: Palgrave Macmillan. Cameroon, N. (2016, February 26). Woolworths' new CEO pitches innovation and customer focus as supermarket posts $972.7m loss. CMO . Chesbrough, H. (2003). The era of open innovation. MIT Sloan Management Review , 35-41. 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