Creativity And Innovation: Entrepreneurial Competitiveness Essay


Discuss about the Creativity and Innovation for Entrepreneurial Competitiveness.


Importance of Innovation Strategies to Entrepreneurial Competitiveness

According to World Bank, innovation and entrepreneurship are acknowledged as significant element for competitive and vibrant economies. Nations and states with dynamic novelty and entrepreneurship environment have the tendency to see higher efficiency rates, leading to enhanced economic development and steady job creation, the main path through which poverty can be eliminated. World Bank considers innovation and entrepreneurship to be two pillars which will drive the vehicle of economic growth further by addressing the issues of major growth challenges, such as sustainability and shared success ("Innovation-Entrepreneurship" 2016).

Growth and progress cannot sustain without consistent innovation with respect to a product or a service. Consistent emphasis on innovation gives an organization a competitive advantage over the rivals. Innovation strategy is set of action plans determined an organization to promote technological advancements or services development, typically by investing into research and development related activities. An innovation strategy is commitment to an array of logical and mutually strengthening policies or actions intended to attain a pre-determined competitive objective. An effective innovation strategy encourages alignment between distinct groups in an organization, clarify priorities and objectives, and help focus attempts around them ("You-Need-An-Innovation-Strategy" 2016). Without a proper innovation strategy, various divisions within the organization can simply liquidate following contradictory priorities even though there is a well defined business strategy (Drucker 2014).

Innovation Process Analysis of Air Asia

When Air Asia started its operation, it did not aim at usual customers of other airlines and did not contest with the well established local player Malaysian Airlines, rather it aimed the multiethnic population of Malaysia which included Indian, Thai, Chinese, and Indonesian who never travelled or could not pay the airline fare. The traditional airlines never focused on these set of customers which Air Asia saw it as an untapped market and an opportunity. The company mainly targeted the first time flyers, students, laborers, and price sensitive customers (Roy 2014).

Air Asia aimed at creation of value innovation plan for the customers by emphasizing on the factors which holds immense value in the eyes of the customers such as easy booking method, no frill, and point-to-point travel system, flying to unclaimed territories. This helped the airlines to reduce its operational cost and increase the value proposition for the customers (Adapa and Roy 2017).

Air Asia operated with no frill service with single class where passengers were not allocated any specific seat, no meals were served, and no loyalty points were offered. The jets were designed with an objective to reduce deterioration, cleaning time as well as cost. The decreased cleaning time and maintenance costs, unloading and loading time and expenses, and allowed them to have faster turnaround between the flights which helped the airlines in improving their process effectiveness and having lower operational cost. Compared to other airlines, Air Asia used its manpower and aircrafts more efficiently. Such efficiency helped the airlines in reducing its fixed and overhead expenses (Stockport 2012).

Classification of Innovation Impacts of Being Proactive in the Innovation Process by Air Asia

  • Lowest Cost Model: By focusing on offering air travel with no frills at considerably lesser fees, Air Asia managed to attain lower prices to achieve high travelers load, market share and increased revenue by eliminating the arrangements of expensive in-flight facilities, flying a traditional fleet, and reducing labor, overheads, and facilities costs. Its thriving negotiation for low cost lease rates for its aircrafts, lower long standing maintenance agreements cost and minimal airport charges facilitated Air Asia to become the lowest cost air carrier (Jerry 2013).
  • Minimal Distribution Cost: Air Asia was the first airlines in the Southeast Asian region to develop the process of e-ticketing and eliminated the hassle of booking tickets through travel agents. By doing this the airline was able to reduce its cost on issuing a physical ticket and eliminated the need of huge and costly booking systems and booking agents’ charges (Jeddi et al. 2014).
  • Strong Marketing and Branding Strategies: Due to fast expansion, Air Asia was able to capture potential market in developing countries like India, Thailand and Indonesia. Due to its low cost, the airline frequently came under the media coverage as the lowest cost and the fastest growing airline which help them to penetrate some prospective markets due to the maximized media coverage. Further, Air Asia key sponsorship deal with the Manchester United helped them to market the brand in the global market. Moreover, its slogan “Now Everyone Can Fly” helped the company in gaining high revenue in few month since its operations (Ratanakomut and Kitcharoen 2013).

In the era of globalization, it is very essential for an organization to develop innovation strategies in its innovation activities. The growth in the technology and market has facilitated the acquirement of technology and remodeled the innovation strategies of an organization which are categorized as impersonator or producer of innovation. Innovation activities of an organization involve research and development, acquirement of technologies, and subsequent activities (Chesbrough et al. 2014).

To put innovation strategies in practice with the innovation activities, the organization involved in producing innovation needs the capability to scrutinize the outer environment for technology as well as the capability to combine new technology. Innovation strategy sets a path for the innovation activities by giving an insight into the future. Strategic innovation provides a wider framework for the innovation activities to stay in tune with the pre-determined objectives of the organization. Innovation strategy is an ongoing process that begins with incubation of an idea and goes through strategic alignment which serves as a support for the subsequent processes of the organization (Johnston and Bate 2013).

Every organization should develop innovation strategies in its innovation activities due to the growing international competition. The globalization of businesses has led to increased opportunities as well as challenges. To compete with such emerging challenges an organization needs to increase its degree of innovation and take action more efficiently to societal needs and preferences. The focus should be on aggressive research and development to achieve sustainable and overall growth (Kindstr?m Kowalkowski and Sandberg 2013).


"Innovation-Entrepreneurship". 2016. Worldbank.Org.

"You-Need-An-Innovation-Strategy". 2016. Hbr.Org.

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Jeddi, A.R., Renani, N.G., Khademi, A., Shokri, V. and Noordin, M.Y., 2014. Low-Cost Strategy Factors in Airline Industry: The AirAsia Case. InAdvanced Materials Research (Vol. 845, pp. 652-657). Trans Tech Publications.

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Ratanakomut, S. and Kitcharoen, N., 2013. A Study of Factors That Affecting Service Quality Of Passenger Service Department in Airlines (AIRASIA, Thailand). Innovative Journal of Business and Management, 2(1).

Roy, A.M., 2014. Air Asia: what has made it Asia's largest budget airline?.Academy of Taiwan business management review, 10(3), pp.28-32.

Stockport, G.J., 2012. AirAsia–flying high. International Journal of Globalisation and Small Business, 4(3-4), pp.324-333.

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