PROBLEMS OF FORMATION OF THE COMPANY'S INNOVATION STRATEGY

ABSTRACT

This article explains the concept of "innovation strategy" and its problems arising in the process of its formation. The role of the innovation strategy and the ways of its formation and implementation will also be considered.  The relevance of this article is determined the problems of innovation strategy which arise in the field of economic research and in the strategic management of company’s development.

Keywords: innovation strategy, strategic management, sustainable development, digitalization.

Any developing company that is focused on results and increasing revenue considers to be reasonable introducing innovations in the company's processes and tasks. It is difficult to imagine a modern company without innovations and constant improvements, and this does not depend on the size, turnover, or scope of the company's activities. The businesses always work on how they can surprise and attract customers in order to be up to date. One of the most difficult ways to attract a steady stream of customers is introducing innovations [1, p.42].

Why is this considered to be a difficult development path for many companies? The main reason is that, working with innovations requires the use of fundamentally new solutions that have not previously been used in the company as a rule. There are several reasons why the introduction of innovations is worth the attention of entrepreneurs.

Firstly, innovations will help solve the problem with the product range, namely with the launch of a new product, or significantly improving the existing one.

Secondly, it can solve the problem of optimizing production costs by using innovative materials or technologies.

Thirdly, it contributes to the improvement of the production and sales management system through the introduction of new information technologies, personnel management methods, or new marketing solutions. But before starting to introduce innovations, it is important for the company to define a new vision, goals and objectives related to the innovative composition of the company. All of the above can be correctly determined by the company's innovation strategy. An innovative strategy is the basis for introducing innovations, so it is recommended to know the formation of this important concept [1, p.43].

Introduction of innovative technologies is a key factor in the successful functioning of the enterprise in a competitive market. This approach contributes to improving the quality of products, reducing production costs, improving the organization of process management within the company and its external competitiveness. The development of innovation processes occurs in accordance with the chosen strategy, which indicates the effectiveness of the strategic management mechanism of the enterprise as a whole [2, p.2]. The right choice of innovative development strategy implies the mobilization of available resources, as well as adequate and rational use of scientific and technical, production and technological, financial and economic, social and organizational potential of the enterprise.

The development strategy is a "product" of strategic management. The main elements characterizing the current problems of the strategy development stage include:

- system analysis of market conditions;

- the applied nature of the management strategy established by the enterprise itself;

- digitization of strategic management;

- a set of intangible assets for solving the tasks of innovative development;

- entering the space of the world economy, spreading world achievements [3, p.35].

The methodology of strategic development of companies is the unification of a common vision of the world, the identification of both the features and the main characteristics of ways to achieve the goals set by the management of the company [4, p.2].

There are several principles that should guide the development of an innovation strategy:

- Determination of the current state of the innovation sphere and the potential of innovative development;

- The need to achieve major goals related to the development of innovative sectors of the economy;

- Sufficient time horizon for their implementation;

- Introduction of organizational, resource, organizational, innovative factors that contribute to the implementation of the plan on time;

- The presence of a well-developed plan for the implementation of goals and the possibility of their adjustment due to changes in external factors [4, p. 2].

The basis for developing an innovation strategy is the product life cycle theory, the company's market position, and its scientific and technical policy. Within the framework of the innovation strategy, the issue of interaction of the firm with the national innovation system should be considered. As already mentioned, a functional strategy should ensure the implementation of the corporate strategy, so it is important to understand what decisions and results can be obtained during the development of an innovation strategy. According to the author, the formulated innovation strategy should offer answers to the following questions:

1. Which of the business goals can be achieved by introducing innovations?

 2. Which markets have the greatest potential for change among those where the company is represented? What are the main drivers of such changes?

3. How can a firm get information about the innovations that form the basis for a potential competitive advantage, and how to turn it into a real advantage?

4. What resources are required to create a competitive advantage (information, knowledge, research and development, technological and commercial competencies, etc.)?

5. What environmental factors have the greatest impact on competitive conditions?

6. What business models and internal behaviors will be successful for innovating and creating competitive advantages?

The answers to these questions are needed to clarify the corporate strategy, and for practical actions to find and implement innovations. Thus, the key task of a firm's innovation strategy should be developed a model for finding, adapting, and implementing innovations that create a steady stream of innovations that provide competitive advantages and achieve the firm's strategic goals. Therefore, the innovation strategy should formulate approaches to the creation and development of the following components:

• Sources of innovative ideas, i.e. entrepreneurial ideas based on hidden (implicit) needs, as a path to disruptive innovation (managers, employees, etc.);

• The demand of the market (consumer) as a source of improving innovations (consumers, competitors, employees);

• Technology drivers as a source radical innovations (suppliers, competitors);

• Tools for information accumulation and knowledge management, principles of building mechanisms for evaluating innovations, concepts of organization of research and development, the intellectual potential of the organization.

The analysis of the elements of the company's innovation activity model.

There is need to understand what the tools for generating the flow of innovations and ideas consist of:

- Data from customers, suppliers, competitors, and our own production process.

- External knowledge obtained from research centers, training, etc.;

- Internal knowledge gained as a result of your own research, as well as employee engagement.

The flow of innovations and ideas, usually passes through an expert review of compliance with the strategy, feasibility and commercial performance [2, p.48]. Then the ideas are transformed into innovations using the following tools:

1. With the history of developing a improved product or service. The development system can be own development; joint development; purchase of licenses; continuous improvement.

2. With the staging system and development of a new product. In other words, technology transfer; development of technological solutions.

3. With the commercialization ecosystem. An example is spin-off bringing a product or service to the market; selling intellectual property; improving processes. For example by reducing costs, increasing productivity, improving quality, etc.

After passing through these stages, the innovation is introduced and goes into its implementation. It should be noted that very important aspect has fallen out of our attention — ensuring the appropriate level of human and intellectual capital of the company. No innovation strategy will be implemented if the company does not have the minimum necessary number of specialists who can perceive the necessary information. Moreover, it is impossible to implement approaches based on our own and advanced external research and development, if there are no properly trained specialists with independent work experience and relying on the company's accumulated experience (data, information and knowledge).

An important indicator of the quality of human capital is also the conditions in which the employee can show their knowledge and skills. The question of the availability and development of human and intellectual capital necessary to solve the problems of innovative development goes beyond just the innovation strategy and simultaneously affects a number of other functional strategies [1, p.63]. However, for the purposes of an innovation strategy, it is fundamentally important to understand, what is the key resource for the formation of human and intellectual capital of the firm, namely:

• Own researchers and developers;

• Commercial R & D contractors;

• Attracted freelancers;

• Cooperation on joint developments or strategic alliances [5, p. 3].

It should be emphasized that each of these options has different risks (in the field of ensuring activity, preserving intellectual property).

Also, should be noted to the issue of involving employees whose work activity is not related to innovative development in the discussion of new ideas, proposalsfor improving technological and other processes [5, p. 2].

In conclusion, it is worth noting that the author made an attempt to clarify the concept of an innovation strategy of co-organization and suggest an approach to its formation. Each company has its own approach, and the determining factors when the choice of options is based on your vision, corporate strategy, and strategic goals company. They determine which innovations meet the corporate strategy, which is a priority for the firm-pioneer solutions and products, or operational simulation of the most successful solutions, as well as which research and innovation model (open or closed) the company prefers. If there are answers to these questions in the corporate strategy, according to the author, the company will have all the grounds and opportunities to form a workable innovation strategy.

References:

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6. ROL'' INNOVACIONNYH STRATEGIJ RAZVITIJa V POVYShENII KONKURENTOSPOSOBNOSTI PREDPRIJaTIJa Sergeeva Irina, Phd, associate professor