The competitive advantage of a company strongly depends on its possibility to
benefit from innovational activities. Understanding the factors that affect product and
process innovation and their effects is necessary for deciding on an innovation strategy
that is one of the core factors of an innovation success. We research the influence of nine
external and internal factors on product and business processes innovation. For the
analysis of important relations and conclusions, beside theoretical literature, we use the
results of several studies.
Innovations are one of the main sources of a competitive advantage and they are
essential for a company growth. Fast technology development, combined with the globalization and fast changes in customer demand, implies that a competitive advantage of a
company can be only temporary. Companies put great effort in beating the competition
and improvement in the market game by introducing innovations. On the international level,
innovations have a vital influence on economic development of a country. Thus, it is not a
surprise that innovations are more and more present in research, business and governmental circles both in developed and developing countries that wish to grow fast and become developed.
Innovations differ among themselves. If we simply categorize companies as innovative
or non-innovative, we risk to aggregate different types of innovators in a way that can
hide some important relations. Among different innovations' categorizations developed by
researchers the most important are: classification according to the type of innovation, to
degree of innovatively and to a trajectory of sustainability.
Many external and internal factors can affect product innovations, business process
innovations or their combination. In this work, we focus our attention on the following
factors industry maturity, customer needs and expectations, technological opportunities, investment attractiveness, intensity of...