The Role of Different Sources of Knowledge in the Innovation Process - Essay Example

THE ROLE OF DIFFERENT SOURCES OF KNOWLEDGE IN THE INNOVATION PROCESS By Location Introduction Innovation isreferred to be the engine and the key to successful development and growth in many firms and therefore, studies about information are paying much attention on the role of sources of knowledge in the innovation process. Most organizations acknowledge that innovation results from interactive learning between different organizations. When different firms interact and share knowhow, this results to creation of new knowledge (Smith 2010, p. 21). The concept of processes of innovation focuses mainly on interactive learning when planning innovation strategies about growth and development. Interactive learning mainly takes place between companies and other organizations like technology service providers, knowledge providers, and customers. This paper aims to discuss the role of sources of knowledge in innovation process of Coca-Cola Company. The Coca-Cola Company has highly benefited from its sources of innovation knowledge, which has highly enabled the company to venture almost in the entire globe (Mazzarol, Elena, and Delwyn 2014, p. 84). Sourcing international innovation knowledge enables Coca-Cola Company to engage in continuous process of innovation that enables the company to stay ahead of its competitors. When there are barriers in the local markets, the company is able to expand into oversea markets hence overcoming these barriers. It is only through external avenues and sources of innovation knowledge that has enabled Coca-Cola Company to dominate many markets around the world (Rothwell 1994, p. 13). However, innovation knowledge sources do not always generate pecuniary benefits to Coca-Cola. Nevertheless, these external sources of innovation knowledge play a vital role of ensuring that the company sustains its innovation process and gives the company a reputation of being the leading soft drinks company in the world (Masegosa, Villacorta, & Cruz-Corona 2014, p. 72). Building relationships and networks with other successful companies is clearly the key to Coca-Cola success since this enables the company to sustain access of international innovation knowledge (Uecke 2012, p. 60). Therefore, companies should not underestimate the significance of their informal networks. The innovation knowledge sources have enabled Coca-Cola Company to define its market dominance ensuring the firm’s success through the implementation of significance global operations that enable the company to control its programs in a unified approach. Secondly, Coca-Cola defines the international quality and regulatory approaches as a resolution to addressing the usage of the best technological approaches that enable the company to provide the market with plentiful solutions (Uecke 2012, p. 61). In the third phase, Coca-Cola uses its innovation knowledge sources to identify global platforms a strategy that enables the company to make critical thinking during innovation process (Chesbrough and Socolof 2000, p. 9). Lastly, Coca-Cola Company is specific in its mission towards growth and development in ensuring abundant soft drinks resolutions through the innovation of worldwide business development and growth that ensures identification of potential opportunities and management of its brands to fit in the newly identified markets. It is through creation of strong organizational relationship that Coca-Cola Company acquires successful innovation knowledge networks. Although, sustaining overseas relationships is more complex than relating with local organizations, Coca-Cola Company has highly benefited from these relationships. These overseas relationships offer the company with unique and valuable innovation knowledge as well as expertise that is unavailable in the local relations. The company allocates time for nurturing and maintaining relationships with other successful organization a strategy that has highly contributed to the company’s successful innovation (Smith, D 2010, p. 23). The company also ensures face-to-face contact with other organizations, which is often essential since it enables the company to build understanding and trust. The different types of innovation knowledge sources those Coca-Cola sources and their roles The main sourced information by Coca-Cola Company is new technology followed by professional information and intelligence access. Other sources of innovation knowledge used by Coca-Cola Company include access to scientific and research information and development (Mazzarol, Elena, and Delwyn 2014, p. 85). Innovation knowledge takes many varying forms. Researchers suggest that innovation knowledge is either tacit or explicit. Generally, explicit innovation knowledge refers to innovation information that a company management can easily communicate to its employees and customers through blueprints, texts, language, operating manuals, and guidelines or codes (Chesbrough and Socolof 2000, p. 12). Tacit knowledge, on the other hand includes skills, talents, and competence that are more complex to communicate directly to people. The coca-Cola Company makes use of these two types of innovation knowledge to ensure the company’s growth and development. Coca-Cola Company gets its innovative ideas from a wide range of sources and different places. It is acknowledgeable that the companies who do not include innovation knowledge sources to their innovation process significantly reduce the company’s innovative capabilities. Researches about Coca-Cola-Cola organizational innovation revealed that customers are the major source of innovation knowledge and they provide a wide range of innovation ideas to the company. Other innovation knowledge sources such as employees, marketing and sales, suppliers, firm’s leaders, and competitors follow customers (Smith, D 2010, p. 24). Customers Since customers are always the final evaluators of any company’s products and services as well as drive sales, there is no doubt that customers are the major sources of innovation knowledge to the most successful companies such as Coca-Cola. Coca-Cola Company takes into account the insights from its customers since customers are the most successful and fruitful source of innovation ideas. In order to utilize fully the power from customers, Coca-cola innovation leaders implement methods for gathering and garnering customers’ ideas (Chesbrough and Socolof 2000, p. 14). Customers’ ideas help the company to improve the quality of its products to the standard that the customers suggest hence making the company the leading producer of soft drink. The company’s innovation leaders incorporate customers’ ideas in the process of innovation to ensure that customer needs are adhered hence sustaining the company’s trust, growth, and development. The internet is the major place where most companies access the customers’ innovation knowledge and ideas. Coca-Coca Company has several online outlines for its customers to post their reviews about the company’s products. The company uses these reviews to shape the quality of its products to match the customers’ needs (Smith, D 2010, p. 25). This enables the company to manufacture the most preferable soft drinks hence attracting a large population of customers and dominating many markets. The company has invested in an online portal attached to its website where customers are able to post their ideas, complaints, and reviews. The company’s innovation leaders actively compile this customers’ information with other feedbacks the company gets from test groups and customer surveys to come up with a set of innovation knowledge for products’ improvements or new products (Rothwell 1994, p. 14). Due to the company’s proper evaluation and implementation of the customer ideas and feedback, this has highly enabled Coca-Cola to stay ahead of its competitors. Competitors Competing firms and organizations’ leaders are two other innovation knowledge sources that Coca-Cola Company underutilizes. These sources of innovation knowledge play a vital role of ensuring that the company implements effective competitive strategies. Sourcing innovation knowledge from other competing firms provides Coca-Cola with fruitful knowledge that enables the company to stay ahead of its competitors and sustain a large number of customers. Coca-Cola Company’s innovation leaders ensure that they attend industry exhibitions, conferences, and tradeshows. This approach enables the company’s innovation team to stay updated with new developments and researches of the competition. Coca-Cola Company innovators use these competitors’ ideas and knowledge to modify or append them to produce new products or improve their current products. The major competitor’ source of Coca-Cola Company id Pepsi Company (Smith, D 2010, p. 25). On the higher level, Coca-Cola innovation leaders always stay well networked and connected with Pepsi innovation leaders an avenue that enables the leaders to gather innovation knowledge and ideas. Internal departments In addition to the sales and marketing knowledge, Coca-Cola innovation leaders also incorporate knowledge sourced from the internal employees who contribute to the company’s largest source of innovation knowledge and ideas (Rothwell 1994, p. 15). Through the virtue of exposure and experience with the industry and related products, internal employees seem to have the well-informed innovation knowledge and ideas. Coca-Cola Company makes use of internal departments as source of innovation knowledge since employees provide the most detailed and structured proposals for the company’s new products and improvement of the current products and services (Mazzarol, Elena, and Delwyn 2014, p. 87). The company encourages internal department innovation ideas by ensuring that the employees are provided with necessary infrastructures to submit their innovation ideas and knowledge. For instance, the company’s sales and marketing department has the greatest exposure to the company’s customers as well as experiencing the largest balance between internal communication and customers’ relations (Chesbrough and Socolof 2000, p. 16). This highly allows the innovation leaders of Coca-Coca Company to articulate and anticipate the demands of the customers and amend them to usable ideas for the innovation process. Looking to the past Companies should not forget and disregard its old innovation knowledge when looking for ideas of improving their products or manufacturing new products. Looking to the past is a source of innovation knowledge that plays a vital role towards growth and development of Coca-Cola Company. This is because the company does not abandon innovation ideas and knowledge because they were poorly evaluated (Rothwell 1994, p. 16). This is because maybe an idea was abandoned simply because the available technology at that time would not ensure a cost effective innovation development and process (Smith, D 2010, p. 26). Coca-Cola Company considers the existing patents with most of its patents readily available and accessible on the company’s social network sites and website (Szwejczewski 2013, p. 25). An excellent example of innovation process from past innovation ideas and knowledge is answering machine. Originally, the answering machine was patent back in the 1930s. This is because the concept of the answering machine poorly and unrealistically marketable during that time due to its poor recording quality and inhibitive costs. This idea remained “dormant” until 1970s when Casio developed a higher quality and smaller answering machine that was based off from the same 1930s’ patent. It took almost four decades for innovators to render this original patent and make it fully marketable. Coca-Cola Company as well makes use of its patent ideas to improve the quality of its products and in manufacture of new products. The concept of the answering machine portrays the way looking into past ideas can play a vital role towards ensuring an effective innovation process. Look into the future Just as the patents of the past can hold an extraordinary number of innovation ideas, looking to the future also acts as a vital source of innovation knowledge. Looking to the future predictions also proves to be as fruitful a looking to the past patents. Large companies such as Coca-Cola are currently working in conjunction with research institutes such as university research institutions to gather innovation knowledge for a long time. This is because the company believes that university students are not stifled by company conventions and generally, they are able to generate new fruitful innovation concepts and “think outside the box”. These researches are effective sources of innovation knowledge that plays a vital role towards providing the company with innovation ideas and knowledge that enable the company to meet the customers’ demands (Chesbrough and Socolof 2000, p. 16). Meeting customers’ demands enable the Coca-Cola Company to stay always ahead of other companies in the same industry since the company is able to attract and sustain a large population of customers. Through research information, the company is also able to venture into new international markets. The students’ relative experiences can serve as a valuable asset enabling growth and development of a company. This is because university students are able to ask many questions, use creative ways to solve problems, and come up with vital feature that are relative to a wide demographic customer base. Innovation knowledge and ideas take on several forms and found in the unlikely places. The role of innovations leaders in any company is to identify the effective sources of innovation knowledge and ideas in incorporate them in the innovation process of the company to ensure growth and development of the company (Rothwell 1994, p. 17). Coca-Cola Company has highly benefited from its sources of innovation knowledge since the innovation leaders always take into account the ideas they get from the knowledge sources. Strategic partnership Strategic partners with other companies often provide Coca-Cola Company with fruitful innovation knowledge and ideas. These takes form of formal collaboration as well as joint ventures. Coca-Cola Company also ensures that it creates “contracted” relationships with other companies resulting to repeated and frequent interaction. Coca-Cola gains competitive advantage from these strategic partnerships by accessing the innovation knowledge from its alliance partners (Chesbrough and Socolof 2000, p. 17). This indicates that Coca-Cola potential competitive advantages are dependent on what the company sources from its partners and from what the partners are able to share to the company’s innovation leaders. However, not all strategic sources are stable. For example, existing knowledge sources may turn out to be redundant once a company acquires similar ideas and knowledge profile. As a company becomes more increasingly familiar with its partners knowledge, negative effects may as well occur locking the firm into the partnership network and stifling creation of innovation knowledge and ideas (Rothwell 1994, p. 56). Coca-Cola makes use of intermediary organizations as a source of innovation ideas and knowledge that ensure the company’s success and implement an effective competitive strategy. The sources of innovation knowledge and ideas guarantee a company’s success. In addition, different sources of innovation knowledge play a vital role towards improvement of a firm’s performance. Although internal sources play the biggest part of shaping the performance of a firm, Coca-Cola Company is one the companies that have highly benefited from its external sources. According to the current trend towards composite innovation knowledge, whereby new processes and products typically involve use of different technologies gained from many scientific disciplines, one should understand that most firms nowadays hardly innovate and learn in isolation (Chesbrough and Socolof 2000, p. 23). While big firms such as Coca-Cola source their innovation knowledge and ideas from its internal sources such as sales and marketing, functional teams, production, and organizational departments, most of the current small business increasingly rely on external sources of innovation knowledge and ideas. Among the external sources, Coca-Cola Company relies on to acquire its innovation knowledge and ideas, inter-firm collaboration play the major role towards the growth and development of the company. It is widely acknowledged that the innovation process in most companies involves interactions between the manufacturers and the end users of their products. Usually, this interaction not only involves exchange of technical information and knowledge but also essential information concerning market demands and trends (Rothwell 1994, p. 45). This information gained from end users highly assists Coca-Cola Company to innovate sound strategies that enables the company to pose a stiff competition to the other competing firms. Another important source of innovation knowledge used by Coca-Cola Company comes from its supply chain (Rothwell 1994, p. 23). Coca-Cola Company uses supply chain as a source of innovation knowledge because suppliers of raw materials and equipments always brings essential insights that play a vital role towards improvement of the firm’s logistics, production, and other functions. Conclusion In conclusion, sources of innovation knowledge and ideas play a vital role towards growth and development of firms’ innovation process. Most organizations acknowledge that innovation results from interactive learning between different organizations. For instance, the Coca-Cola Company has highly benefited from its sources of innovation knowledge, which has highly enabled the company to venture almost in the entire globe. The use of both internal and external knowledge sources enables Coca-Cola Company to engage in continuous process of innovation that enables the company to stay ahead of its competitors. The company is able to expand into oversea markets hence overcoming local markets’ barriers. It is only through internal and external avenues and sources of innovation knowledge that enables most Company to dominate many markets around the world. 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Uecke, O 2012, How to commercialise research in biotechnology, Effectiveness of the innovation process and of technology transfer in the biotechnology sector, Wiesbaden, Springer Gabler. Read More