Read the case study below and answer the question that follows:

Managing the type of innovation Digital disruption is coming for SMEs

According to new research by Ricoh South Africa, small and medium-sized businesses (SMEs) are in danger of failing if they dont adapt to digital disruption, regulatory requirements and the economic shifts that are fundamentally changing their markets. At least 34% of the 3 300 SME leaders surveyed from across 23 countries, including South Africa, say they will go out of business by 2020 if they arent able to innovate in response to these changes. With 56% trying to increase profit and 54% working to grow their operations, SMEs must be ready to challenge traditional assumptions about growth.

How a business embraces the current digital disruption has become a crucial differentiator. But given the uncertain economic climate, SMEs are under pressure to drive digital transformation while still managing operations.

The research uncovers three key areas where SMEs should be applying technology to help focus their attention: SMEs must build closer customer relationships by using technology to facilitate and inform product and service development: 54% recognise that they need to develop ongoing relationships with their customers.

SMEs must use smarter workplace technology to reshape processes, improve agility and make efficiencies: 74% of leaders say technology helps their ability to innovate.

SMEs must foster the full potential of talented individuals by using technology to empower employees and develop creative thinking: 42% want to encourage safe spaces for experimentation to see if ideas are successful.

An opportunity in the challenge Even though financial services organisations, IT firms and telecommunications operators have led the charge towards a digital-first market, the more agile SME companies currently enjoy an opportunity to leapfrog the more established players in their sector.

Unlike their larger counterparts still reliant on legacy systems, SMEs can circumvent the need to upgrade outdated hardware and software. Instead, they can focus on harnessing the innovative elements of the digital space that best suit their strategic directives. For example, software as a service is driving innovation in the provision of a host of business services including point-of-sale, payment processing, automated marketing, supply chain management and accounting. The original disruptors

Think about the impact that the likes of Uber, AirBnB, Amazon, and Netflix have had on taxi services, the hospitality industry, book stores, and DVD rental shops respectively. And thanks to how user-friendly, pervasive and accessible technology has become, there is nothing limiting the savvy entrepreneur or small business owner in terms of upsetting the proverbial applecart in this regard. While it is natural for some SMEs to be hesitant to make the shift towards digital, the reality is that they no longer have a choice. If they dont start taking steps to create a digital strategy, the danger is that they will lose progressively more of their customers to competitors who had the foresight to develop a digital strategy and are now reaping the associated 50% improvement in performance.

Question

Required:

You have just been appointed as an advisor in your organisation to help increase the performance and promote innovation within your team. You will have to assist the organisation in understanding the four main Types of Innovation.

Prepare a strategy plan in which you highlight and explain the different types of innovation according to the theory. Out of the four types of innovation, you will then propose two types of innovation, with examples, that your organisation may use to gain the lead in their respective market. Refer to the case study to promote at least three benefits as to why innovation should be adopted.

Note: five marks will be awarded for the technical quality of your answer: i.e., good academic language and editing, formatting, logical presentation and referencing.