Innovation Process, Customer Value and Organizational Structure

The Role of Customer Value in the Innovation Process

Customer value is one of the key aspects of the product innovation process. Ultimately, customer value is how a product or a service is seen by those who purchase it. The greater the difference between a product’s potential benefits and costs, the higher its customer value is. In order to survive and remain successful in the market, companies are required to evaluate their products and services and innovate them constantly. The role of customer value in the innovation process is indisputable and gained importance among major organizations nowadays. There are several factors explaining this, such as the general shift in thinking about innovation as the total value offered to a consumer and the reluctance of consumers to buy new products which lack something innovative.

Nowadays, many organizations have re-evaluated their approach towards product innovation and tend to think of it as of a total value offered to a consumer. This can be seen in deeper integration between products and other services offered by one company. For instance, Apple is famous for including its music streaming services such as iTunes and Apple Music in their devices, which lets consumers enjoy their music collection in one place, which raises customer value (Midgley, 2015). Additionally, companies came to the understanding that consumers are reluctant to buy a new product if it lacks any innovations. This, in turn, can be seen in the example of Cirque du Soleil, which saved the circus industry from decline by introducing new techniques to their performances (Midgley, 2015).

To conclude, customer value is a significant factor, which companies consider when it comes to innovating their products. The need for new products and services is crucial for an organization’s survival on the market in today’s economy since it aids businesses in expanding their client base. Customers need to be persuaded with the convenience and innovation offered by the goods and services they are considering to purchase.

The Role of Organizational Structure and Change in Innovation

Ultimately, the innovation process involves transforming already existing or newly gained knowledge into something new. In the case of business and economics, its innovation patterns mainly concern the development of new products and the improvement of existing ones. Organizational structure plays a significant role in a company’s innovation potential as it directly impacts its speed and quality. The part of organizational structure in innovation is visible when evaluating how industries evolved. Over the course of time, many had to adapt to the changing market conditions and thus innovate their products and services.

During the period of industrialization, many factories had relatively simple business processes, which were focused on producing one specific good. Later in the nineteenth century, under the pressures of the world’s trade growth, these factories had to expand and then subsequently transformed into major organizations. The need for the ability to efficiently mobilize and control the vast resources that became available to organizations resulted in many companies innovating their operations and products (Trott, 2017). This phenomenon is known as diversified expansion, and many companies have applied to remain dominant in multiple industries.

For instance, Sony remains dominant in console gaming innovations with its PlayStation 2 selling for more than 150 million copies, but the company also produces other electronic devices (Chung, 2020). Therefore, the expansion of the world’s economy during industrialization led to many businesses growing bigger and, thus, innovating their organizational structures.

To conclude, the change in the expansion of world trade, which was aided by industrialization and then, during globalization, led to many organizations changing their structures. This inevitably resulted in many businesses going through diversified expansion. Overall, the newly developed organizational structures contributed to the companies innovating their products and services to remain dominant in the markets they operate.


Chung, A. (2020). Predicting sales for the next generation of consoles in 2020. Leicester Undergraduate Mathematical Journal, 2.

Midgley, D. (2015) The innovation manual: Integrated strategies and practical tools for bringing value innovation to the market. Wiley, 1. pp. 2-3.

Trott, P. (2017) Innovation management and new product development. 6th Edition. Pearson Publishers, 1. pp. 11-12.

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