Strategic Innovation Practices and Profitability of Entrepreneurial Businesses: Perspective from Malaysia
Keywords:
Product Innovation, Service Innovation, Productivity.Abstract
More studies indicate that businesses becomes very competitive in an emerging market when they give importance to innovative activities that build their reputation in the market environment. Essentially, the key reason for innovativeness is the desire of firms to obtain increased business productivity and increased competitive edge and the ultimate goal of innovation is to improve business productivity. Strategic innovation is critical for firms that are in pursuit of improved productivity and their reward is often an increase in their profits and their market share. Process of strategic innovation is strongly associated with organizational learning and refers to ability of organization to generate, accept and implement new ideas, processes, products or services. The primary goal of process innovation is to generate a notable increase in productivity or to drive down costs significantly. This approach can help organizations achieve major reductions in process cost, improvements in quality, service levels and other business objectives. Strategic innovation is contributor to creation of new markets and products for the market, however even after the benefits of strategic innovation has been established the impact of strategic innovation on productivity of Businesses has remained misunderstood. The study adopted the use of mixed method approach research design which is the application of both qualitative and quantitative approaches. The study used a desk study review methodology where relevant empirical literature was reviewed to identify main themes. Result findings from literature-based review indicated that innovation had positive and significant influence on the productivity of businesses. It was recommended that innovation information should be available particularly to regulatory and advisory bodies for guidance to the Businesses on the need to craft and employ sound strategies geared towards continuously embracing innovativeness since innovation leads to improved financial productivity.
Keywords: Product Innovation, Service Innovation, Productivity.
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