Starter: Key Terms…
Explain what the following key terms mean:
1.
Productivity
2.
Unit Cost
3.
Labour Productivity
4.
Raw Materials
5.
Suppliers
Starter: Key Terms…
Explain what the following key terms mean:
1.
2.
Productivity
Unit Cost
Productivity is a measurement of efficiency.
It measures the output of a business in
relation to its inputs.
Unit Cost is the cost of producing one unit of a
good/service. The lower the unit cost, the greater is
the level of efficiency and the business is more cost
effective.
3.
Labour Productivity
4.
Raw Materials
5.
Suppliers
Labour productivity measures
the amount a worker produces
over a given period of time.
Raw Materials are good brought by a
business to be used in the production
process.
Suppliers are other businesses that provide the
raw materials for the production process, in
return for capital.
Tuesday, 22 March 2016
Today you will know what invention
and innovation are.
You will understand their importance
in product design.
You will apply your knowledge to the
Tide Coldwater study questions.
Invention, Innovation & Design

An invention occurs when a new product or process is
created;
– inventions will earn money only if they are put into
practice – in other words, innovation takes place.

Innovation means using a new idea in the marketplace or
work place.

Design involves developing both the physical appearance
and the internal workings of a product.
– Design is used by businesses to ensure that their
products are attractive and practical.

At the heart of any business is the product it sells as that
product is the key to success.
– Invention, innovation and design are the processes by which
interesting, new or unique products enter the market.
Invention… (1)

The activity of inventing products is somewhat hit and
miss.
– Many new products have been invented by accident. i.e. The
Post It note.

Apples iPod was largely the invention of company outsiders,
but apple added the key designed features and linked it
with the music download software – iTunes.
– When the iPod made its press debut in 2001 it wasn’t
well received, it was the public that saw the
opportunities rather than the press ‘experts’

Other products have been invented to fulfil a particular
purpose, such as stair lifts for the elderly and disabled.
Invention… (2)
Invention is not limited to products (product invention)
Production processes have been invented that have led to
greater competitive advantages .
This is known as process invention.
For example Pilkington PLC developed the self-cleaning glass
process. This was branded and patented as: Pilkington
Activ.
It has a coating that breaks down dirt particles so that they
do not stick to the glass and are washed away with rain.
Pilkington Activ is used on many attractions such as
The Spinnaker Tower
Invention… (3)

Although many inventions come from company research
programmes, there is still a place for the inventor.

James Dyson, inventor of the cyclonic vacuum cleaner had
his idea rejected by many manufactures including Hoover!

As a result James decided to set up his own business to
enable him to produce his revolutionary new cleaner.
– Within 4 years his business had grown and he employed 600
staff, he claimed 26% of the market and he was estimated to
be worth between £100 – 250 million.

Having come up with an invention it is vital to patent and
protect it. This means registering it with the Patent
Office.
Innovation… (1)


As with invention, innovation can be based on products or
processes. However successful innovation required business
skill in addition to inventive talent.
The inventive idea must be honed into a marketable
product.
– Meanwhile the method of production must be developed and
finance found.


Successful innovation is vital to the long term success and
survival of a business.
Innovation allows the business to update its product
portfolio by replacing products at the end of the lifecycle.
– Sony have been Innovative with their PlayStation:
Innovation… (2)

It is particularly important to continue to innovate in markets
where competition is strong, product lifecycles are low and the
rate of innovation is high.
– Computer manufacturers seek to launch a new innovation every
few months, in an attempt to gain a competitive advantage.
Innovation is essential in this market to ensure survival.

In most markets, the term ‘innovation’ means nothing so dramatic.
– In the Salad Cream market the first ‘squeezable’ bottle was
called ‘Innovative’ by Heinz.

In large, established markets, quite small product innovations can
have a major impact on market share.
– Coca-Cola hope that its innovation of a resealable drinks can
will give it an extra edge over its rivals.
Design



The design of a product is not just about its appearance and shape. It is also
about its function, quality and durability.
Designers work to a design brief which tells them the criteria for looks, costs
and quality all of which MUST be considered in designing the finished product.
There are THREE factors to be considered when designing a product. This is
often referred to as the DESIGN MIX. It can be drawn:
How does the
product
look/feel/smell?
Aesthetics
Function
Does the product work, is it
reliable, Does it fit the purpose?
Economic
Is it simple enough to be
made quickly and efficiently?
The Ideal Design Mix
The ideal DESIGN MIX would be:
Aesthetics
Function
Economic
As this shows a central balance between all three areas
For example…
» Car that is environmentally friendly, cheap to tax
and run
» Looks Goods
» Reasonably priced
Striking a Balance
However ONE factor is MOST likely to be a
clear priority
Aesthetics
Function
Economic
– This would be an example of a product that is
low on both looks/ taste/smell and function
• E.g.
Cheap and cheerful!
Invention & Innovation
Invention and Innovation fits into all functions of the business:
Marketing, Finance, People and Operations Management.
Invention & Innovation in Marketing.
Many people would argue that the most important element of
the marketing mix is the product itself. Successful product
development keeps a business one step ahead of the
competition.
This usually means keeping one step ahead in pricing as well and
being first can mean you have the option to charge a premium
price. Innovative products are also very likely to get good
distribution.
Supermarkets are reluctant to find space on their shelves for a
just another ‘me too’ product, however if it is a product that
is truly innovative space will be found.
Invention & Innovation
Invention & Innovation in Finance.
Invention, innovation and design all require significant
amounts of long-term investment. Innovation takes time,
and that is spent by highly paid researchers. The result is
that businesses who are unwilling to accept long payback
periods are unlikely to be innovators. Short-termists
businesses are far more likely to copy other businesses
successes.
In fact, much of the money spent by businesses on invention
and innovation provides no direct feedback. Ideas are
researched and developed before discovering that they
will not succeed in the market place.
The result is that innovation is something of a hit and miss
process that has no guarantee of reward, but the
possibility of a brand new, market changing product.
Invention & Innovation
Invention & Innovation in People.
Businesses realise that team work provides many of the
most successful innovations. As a result research teams
are encouraged to share their breakthroughs on a
regular basis in the hope that the team can put their
ideas together to create a successful product.
The research teams are often created by taking
specialists in various fields of operation, from
different departments within the business, an
accountant, production specialists and marketing
expert.
This blend of expertise will enable to the team to identify
cost-effective, marketable new ideas that can be
produced by the business.
Invention & Innovation
Invention & Innovation in Operations Management.
Innovation and invention are not just limited to
products. New production processes can be invented
or developed. These can lead to more efficient,
cheaper, or higher-quality production.
Furthermore new products often need new machinery
and processes to be developed for their
manufacture.
Design is also important in Operations Management and
Production. The process needs to be clearly thought
through so that every machine and activity has a
logical place in the production system.
Activities…
Page 282 of the text book.
Task 1: Revision Questions
Complete Questions 1 – 10. (45 minutes)
Task 2: Tide Coldwater Case Study
Read the case study.
Complete questions 1-5. (40 minutes)
Remember to use the assessment objectives to achieve
FULL marks.
AO1: Knowledge
AO2: Application
AO3: Analysis
AO4: Evaluation