A strategy is the plan that combines the core business objectives of the organizations, actions and policies in order for it to attain its goal. A good strategy ensures that the resources are made available in order for the organization to meet that specific goal. One of the strategies of the organization is produce goods of the high quality to achieve the competitive advantage. Another strategy of the organization is to improve service delivery to its customers in order to create a strong consumer loyalty thus a competitive advantage to the organization. Innovation is different from invention. Invention entails coming with an idea about new product of the process while on the hand innovation means putting that idea into practice. Thus innovation is the putting the invention into practical use (Tucker, 2008).
Different authors and the scholars have defined innovation in different ways. According to Paul Schumann "Innovation is the way of transforming the resources of an enterprise through the creativity of people into new resources and wealth." Schumann postulates that innovation involves use of the creativity of the employees to create new products and the services in the market. The new products and services can be used by the organization to provide the market with the superior products than those supplied by the competitors in the market thus a source of competitive advantage. When the organization comes up with the totally new products in the market, it seeks protection from the copyrights laws which prohibit the copying the product invented by the organization. The copyright laws give the organization the monopoly to produce and supply the product in the market. The organization technically monopolizes the production of a certain product and thus earns supernormal profits from the production and the supply of the product (Strecker, 2007).
According to David Schmittlen, "Innovation does not relate just to a new product that would come into the marketplace. Innovation can occur in processes and approaches to the marketplace." Schmittlen postulates that the innovation does not only relate to the production of new products in the market but also on the approaches and the processes. The organization can come with the new processes that are superior that those adopted by the competitor in the market. The processes can either in the production of the product or in the supply of the products in the market. The efficiencies that are attained through coming with superior processes ensure that the organization is able to save some cost in production thus producing the product at low prices compared to the competitors. The benefits enjoyed by the organization in cost saved in production trickles down to the customers in terms of low prices of the goods and services in the market. From the law of demand and supply, the lower the price the higher the demand and hence the low prices charged by the organization attract more customers in demanding its products thus high revenue to the firm. The processes can also relate to the way the organization handles its customers. Innovation may lead to the improvement of customers' services and thus creating the customer loyalty which is also a source of competitive advantage for the organization. The satisfied customers will most likely make repeated purchases; the customers' loyalty to the product of the organization is the source of competitive advantage (Strecker, 2007).
According to the findings of the researches carried out, the diversity of the employees in terms of the race helps to enhance innovation to the organization. The research carried out among 177 banks in United States indicate that the racial diversity of the employees of those institutions improve the performance of the organization. Racial diversity in the organizations is both a curse and a blessing to the organization. Racial diversity if not managed well in the organization can be a source of conflicts in the organization. On the other hand if well managed, it ensures innovation in the organization and thus a source of competitive advantage. Thus it is the duty of the management to ensure that their workforce is well diversified in order to attain innovation in the organization and thus competitive advantage over th4e competitors in the industry (Terziovski, 2007).
The management should create a good environment to foster inventions and the innovations in the organization. In the organization, the ideas that lean to innovation can come from various stakeholders in the market. These stakeholders include the customers, shareholders, the competitors and the employees of the organization. The customers give their ideas in terms of complain or the complement they give on the product and service provided by the organization. In case the customer complains about the product or the service, the organization devises new ways of improving the product and thus its acceptability in the market. An organization can also generate new ideas from the competitors in the industry. The organization can engage in the activity referred to as benchmarking which involves copying the best practices adopted by the competitors.
The organization applies the copied practices from the competitors to bring improvements of its products and services and also the processes within the organization to be at par or even better than the competitors'. Another important group that ensures innovations in the organization is its employee. Employees of the organization are the most important resource within the organization that it should engage to ensure competitive advantage. The management of the organization should ensure that its employees are well motivated to generate ideas and thus ensure innovations in the organization. The reward can either be in monetary or in non monetary form for example promotions, holidays and acknowledging the employees of the organizations as having contributed immensely in the production of the new product or improvement of a certain business process (Terziovski, 2007).