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Managing Innovation Theory

University: University of Warwick

  • Unit No: 21
  • Level: High school
  • Pages: 12 / Words 2944
  • Paper Type: Case Study
  • Course Code: N/A
  • Downloads: 284
Question :

Some of the questions in the assessment are as follows:

  • Discuss about the Managing Innovation Theory.
  • Dsicuss about the Processes of the Theory.
  • Discuss about the Application of the Innovation Theory.
Answer :
Organization Selected : N/A


Innovation can be defined as a change that is made to an existing product or idea. In order to gain a competitive advantage, a business should consistently innovate its products and services (Aarikka-Stenroos and et. al., 2017). Innovation helps in solving complex problems easily by developing creative solutions which in turn increases the overall productivity of the company. Different creative as well as innovative ideas help a business to market itself effectively. This can be done by creating a new brand or by developing a unique business that the customers find to be attractive. Innovation today has become an important aspect of any organisation if it wants to beat the competition and stand out in the crowd. Diffusion of Innovation theory is one of the oldest theories of innovation that was developed by E.M. Rogers in the year 1962 (Diffusion of Innovation Theory, 2019). The theory explains how does a product or an idea gain strength over time and spread through a particular population. This model is generally used when an organisation launches a new product or service in the market, or launches an existing product in a new market.


Innovation Theory

The Diffusion of Innovation theory helps an organisation in understanding the way in which buyers adopt new products or technologies and engage with them. The theory was developed in the year 1962 by E.M. Rogers. The theory also explains how and why new ideas are adopted by consumers It primarily focuses on how a new idea or a product diffuse among groups of people (Biemans, 2018). Innovation is not always adopted by all the people at the same time but in a proper sequence and can be classified into different adopter categories depending on the time they take to adopt the idea or product. When an organisation plans to launch or introduce a new idea in the market, it should have a clear understanding to the characteristics of its buyers. The adopters are categorised into five different groups which are explained below -

  • Innovators - People who fall in this category are the first ones to try out a new innovative or new product that is launched in the market. They are always interested in trying out new products and ideas. They are willing to take risks and an organisation needs to do very little innovation to appeal to this category of people. Innovators usually have a strong financial background and a setback or failure of a new idea usually does not affect them. Thus, innovators are easy to attract by the organisations as there no special need of making efforts in order to gain their attention.
  • Early Adopters - Early adopters are the people who represent opinion leaders and enjoy opportunities of change. They are already aware of their need to adopt change and hence don't find it very difficult to adopt new ideas or products (Griesar, Bessant and BernschneiderReif, 2018). This category of adopters does not need any information to convince them to adopt change. Early adopters provide advice as well as information that the other adopters are searching for about the product or the service. Thus, companies need to show early adopters a good reason to adopt the new product in order to attract and encourage them to purchase the products.
  • Early Majority - People who fall in this category are very rarely leaders but also adopt any new idea before any other average person. These people often need to see evidence if the innovation will work for them before they adopt the change. Strategies used by marketers to appeal this category of adopters is usually success stories as well as evidence of the effectiveness of the innovation. The decision time about adopting innovation of the adopters in the early majority is relatively longer as compared to innovators as well as early adopters.
  • Late Majority - People who fall in the category of late majority are primarily doubtful about adopting the change and go for it only when the innovation or product has been tried by majority of people and won't try out the innovation before they see an accountable proof that the product of innovation is actually effective (Wymbs, 2016). Strategies that work for this population is information about how many people have already tried the product or innovation and adopted it. Also, in order to adopt the change, there is a strong pressure from friends or family to do so.
  • Laggards - Laggards are people who are traditionalists and very conservative (Johnson, 2016). They are highly doubtful about adopting the change and are generally the hardest category to be influenced by marketers to adopt change. Strategies like statistics, hard data, pressure from peers and fear appeals should be adopted by marketers of different organisation. The decisions that are made by people in this category are highly influenced by previous generations.

The stages by which a consumer adopts an innovation or a new product, includes awareness, decision about adopting or rejecting the innovation, initial use of the same in order to test its effectiveness as well as continued usage of the innovation. Want to get Assignment help? Talk Our Expert Now!

Processes of the Theory

The process of the theory includes various stages that are explained below -

  • Knowledge - Consumers are first exposed to innovation in this step and do not possess knowledge about the innovations.
  • Persuasion - The consumers become interested in knowing more about the innovation and actively seek information about the same.
  • Decision - In this stage, the customers compare advantages as well as disadvantages of using the innovation and decides if he/she wants to adapt the same.
  • Implementation - the customers determine the usefulness of innovation to the,m.
  • Continuation - The decision about continuing using the product or discontinuing it is finalised in this stage.

Evaluation of the Theory


The Diffusion of Innovation theory is useful as it explains the rate at which customers adopt a new product or an innovation. Therefore, the theory helps marketers of different organisations understanding the ways in which trends occur in the market and thus warns them of the probability of the success or failure of their innovation and new products (Diffusion of Innovation, 2020). The organisations can also forecast what type of consumers will purchase their product or service and thus help them in developing marketing strategies accordingly in order to attract majority of adopters from different categories and thus increase their overall sales and profitability in the market as well as gain a competitive edge (Möller and Halinen, 2017). Also, the theory can be used across different industries like agriculture, retail, marketing etc. Diffusion to Innovation theory helps organisations in increasing their knowledge about the buying behaviour of customers and an understanding of different ways in which they persuade the customers to purchase products. The theory also helps in understanding the various factors that impact the consumers' acceptance of a new product or service.


There are several limitations of the Diffusion of Innovation Theory which are explained below -

  • Cultural Differences - While launching new products in the market, organisations often don't take culture differences into considerations (What Is Diffusion of Innovation and Why Is It Important in 2019?, 2020). This can limit the people who purchase the products of the company and adopt the same. Therefore, it is important for an organisation to analyse and understand the culture of a region carefully before it launches an innovation in the market.
  • Poor Information - If the attempts to introduce the innovation in the market are poor, the organisation will not be able to reach out to a large number of consumers and thus limit its overall sales in the market. Therefore, attempts should be made to clearly convey the information about the innovation or the product to the consumers. This can be done through various online as well as offline channels, social media being one of them.
  • Economic Differences - There are many societies that are not completely developed and lack infrastructure which limits marketers from adopting a new technology (Prange and Schlegelmilch, 2018). People living in such societies are not very good at taking risks and adopting new products which can be a complex task for organisations to attract and encourage them to adopt new innovative ideas as well as products.
  • Number of adopters - The number of innovators and early adopters in a society are always less as compared to laggards and late majority, which are large in numbers. Thus, marketers have to pay more attention on developing and formulating strategies that are concerned with attracting these segments of people which are a lot more time as well as cost consuming. Take Assignment samples Now!

Application of the Innovation Theory

Company Background

BrewDog is a global pub chain and brewery thats headquartered in Ellon, Scotland. The company was founded by James Watt and Martin Dickie in the year 2007 with the mission of making other people passionate about great craft beer as they were (BREWDOG FROM A-Z., 2020). It produces both canned as well as bottled beers that are offered to the customers in a variety of styles like stout, lager, ale etc. BrewDog claims to not use any kind of chemicals, preservatives or cheap substitutes in its products. A business model explains how an organisation creates and delivers value to its customers through its products and services. Every single item within the blueprint of the company is focussed on the primary aim. Some of the business models used by the respective company are explained below -

  • Manufacture - BrewDog aims to revolutionise the beer industry and redefined the British beer drinking culture and thus carries out the whole process of manufacturing high-quality beers. The process involves various activities like mashing, lautering, boiling, fermenting, conditioning and finally packaging. The retailers including British supermarkets purchase the products from the organisation and sell them directly to the customers and also exports them.
  • E-commerce - An e-commerce business model is one where a business sells its products through online web-stores (Schultz, André and Sjøvold, 2016). BrewDog also follows this business model and sells its canned beers not only through supermarkets and retail stores but online website as well.

A Business Model Canvas can be defined as a template that is used by businesses in order to develop or document their existing business models. IT is a chart that is represented visually and has nine elements. The business model canvas for BrewDog is explained below -

Key Partnerships

Investment Partners

Key Activities

Mashing, Lautering, Fermenting, Conditioning, Boiling and Packaging

Value Propositions

High quality craft beers and other spirits

Customer Relationships

Dedicated sales in supermarkets, Loyalty Cards

Customer Segments

Retail customers Beer lovers

Key Resources

Physical machinery and Information Technology Infrastructure


Supermarkets, retailers and online website

Cost Structure

Marketing, Distribution, Research and Development

Revenue Streams

Payments made by the customers, Ad Revenues

Historical Development

BrewDog came into existence in the year 2007 when James and Martin got bored of the industrially brewed beers and ales that dominated the UK beer market back then. The founders reached out to several banks in order to lend them money to purchase a proper bottling machine as well as tanks in the year 2008. It planned the UK's strongest ever beer which resulted in all of its beers getting banned. This is when BrewDog started exporting to Japan, America as well as Sweden. By 2009, BrewDog had become UK's fastest growing alternative brand of beer. The year 2011 was a year of success as the company opened bars in Edinburgh and Glasgow as well as a flagship store in London (Scozzi, Bellantuono and Pontrandolfo, 2017). The company launched the largest equity crowdfunding scheme and also installed a mind-blowing canning line at its brewery in Ellon, United Kingdom. The company set two world records in the year 2016, one for the highest equity crowdfunding raise ever and the other one for the mos consecutive years. The company celebrated a decade for its existence in the year 2017 by deciding on changing the way it does business. Also, the company opened the world's largest first craft beer hotel, named “The Doghouse” next to its Columbus brewery and its own beer museum.

Application of the chosen theory in the Development context

The application of Diffusion of innovation theory in context to BrewDog can be explained as it started off its business by brewing small batches of craft beers, filling them in bottles manually and selling the same in the local market and marketing the same in order to increase sales. In order to attract early adopters as well as early majority in Sweden, Japan and America, the company created guides and success stories in order to give them a reason to buy their products (Talukder, 2016). Reviews, comparisons and social proofs were encouraged by the company in order to persuade late majority adopters to try out its innovation in beers. Links to these reviews on its website and other third party view sites were also used. Since the theory primarily comes in handy when a company launches a new product in the market, it helped BrewDog in attracting customers gradually from around the world and finally becoming a market leader in the beer industry worldwide.

Future Development

For the future development of its business, BrewDog plans to include new beers, bars and a new way of doing business since the company has entered into its second decade. In order to contribute to the UK craft brewing scene, the company has planned to host an open day at its one of the breweries in Aberdeenshire wherein it will invite anyone who works an independent UK craft brewer to visit the brewery and attend seminars on various topics like brewing, sales, quality and export. The respective company has also planned a number of innovations in its products as well as distribution system that it has working on for years now (PRESS HUB, 2020). Also, in order to help small breweries with their business, BrewDog will provide them with material support like help with sourcing ingredients and other brewing materials in order to enhance sales.

Besides brewing just bottled and canned beers, BrewDog should also offer its customers other attractive beverages like craft coffee drinks, fruit punches in order to enhance its overall sales and thus gain a competitive advantage against competitors. It can also introduce new flavours in its beers like rose beer, pink beer etc.

Since the company has planned on hosting an open day for people who work in independent craft brewers in the UK, it will be able be beneficial for it as these will visit on of its breweries and attend various seminars which will increase their knowledge on various subjects (Tidd, and Bessant, 2018). Thus, they can further act as opinion leaders for consumers who fall in the category of late majority and laggards by sharing the knowledge they would've gained in the open day event. The company will also distribute samples of its craft beers so that they can share the experience with other people as well (Van Lancker, Wauters and Van Huylenbroeck, 2016). Also, mostly innovators as well as early adopters will be fascinated and attract the event as this group does not depend upon any kind of information to adopt innovation.If you want to get the authentic paper as per the prescribed deadline, then consider seeking help from our Management Assignment Help at the best price.


From the above report, it can be concluded that innovation is an important component for a business to be successful and thus gain a competitive advantage. It becomes easier for organisations to market their products as consumers get attracted to new, innovative and unique products. This leads to attracting consumers from different segments, particularly adopters in the category of late majority since they depend on the information of how many people have already tried the products of the company. Thus, organisations should constantly innovate their products as it helps in solving complex problems easily thereby increasing the overall productivity.

Read Also :- Management Consultancy

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