In business, innovation can be defined as the exploitation of new ideas that find acceptance in the market. These ideas, most often, are incorporated into new processes, technology, best practices and designs (Sarkar 2007, p.2). Some of these ideas may end up causing a complete overhaul to an organization’s operation and range of products.
Most of the innovated products are based on the ideas of others or a modification of existing products. In summary, innovation process encompasses; getting a new idea or modifying an old one, reorganization of existing opportunities or those that can be promoted, choice of best alternatives and application of the process and the idea (Sarkar 2007, p.2). Innovation may be as a result of the need to meet the needs of consumers or improve the way of doing things. Companies that fail to embrace innovation have often found themselves left behind by their competitors, leading to the loss of their market niche.
The focus on the theories of innovation varies because there are different views on the process of innovation and the factors that lead to the development of innovation. The theories may focus on; (a) technological development, R&D and technical research functions in a company, (b) the individual who creates and develops the new elements, and (c) issues of innovation in the market place (Sundo 1998, p.4).
It involves the exchange of technology between two or more companies. Strategic alliances are characterized by risk sharing and mutual commitment in respect to the attainment of specified economic and technological goals and objectives. These alliances tend to arise from the willingness and desire of one firm to assist the other in overall development of the firm business and/or exploitation of certain technological assets portfolio.
An example is when the firms in the alliance want to (a) form a joint venture in research and distribution, or (b) enter a joint development agreement, or (c) enter