Why is it important to use innovation in business?

Answer 1

Innovation enables firms to:

-introduce more product and service variations, enabling better market segmentation and penetration;

-improve existing products and services so that they provide better utility to customers;

-improve production processes so that products and services can be delivered faster and at better prices.

Increasing globalization has both expanded the potential markets for many firms while simultaneously exposing them to greater competition; this has resulted in firms putting more emphasis on innovation as a lever of competitive differentiation. Furthermore, information technology has enabled such process innovations as CAD/CAM, rapid prototyping, and flexible manufacturing, enabling firms to produce more product variants faster and cheaper. This is a double edged sword: it has enabled product lifecycles to shorten (making rapid innovation more imperative) while simultaneously improving a firm's options for innovation.

Answer 2

Because building a better mouse trap will cause people to beat a path to your door.