1. Explain how these two types of innovation were used to drive up profits. (Bre

Question

1. Explain how these two types of innovation were used to drive up profits. (Breakthrough innovation Sustaining innovation)

a. Discuss the 2 key factors required to drive up profits – drive down costs and drive up revenues.

b. Might want to include how new products gain customer acceptance, including the importance of the relationship between price and utility.

c. Process innovation is often used to get leverage on lowering costs, might want to discuss how impacts total product, ATC, and profit.

d. Some of the process innovations of Wal-Mart might be good to look into.

Explanation / Answer

Multiple questions asked.

Q1 is answered below.

1.

The two types of innovation used to drive up profits are: Breakthrough innovation and Sustaining innovation

Breakthrough innovation: This type of innovation involves breaking through a new technology to develop a new product into a new market. It is also known as a type of revolutionary science, where a new-age product is developed and the organziation benefits from the increased sales as well as reputation in the market.

Sustaining innovation: This type of innovation involves evolution of an already existing technology into a new technology or process or making an invention which changes the scenario of production process and helps organizations alter the production process in a way that either reduces the cost of production or speeds up the production, thereby increasing productivity. This leads to an increase in profits for the company eventually.

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