The Research and Development department integrated in a company is the most common form of corporate entrepreneurship. It is responsible with creating efficient methods of improving other departments’ activity as well as providing spectacular value for the customers.
Corporate entrepreneurship develops new commercial activities in order to meet the market needs and wants. It initiates the process of creating value with an already established company. Employees of the department have the responsibility to conceive, start and manage a new business that is different from the parent organization. So, the new actions help the social entity improve its market position and it enlarges its capabilities and resources.
The business environment is very challenging and the main factor that influences it is represented by customers. A changing market with new trends appearing every day leads to an increase in choices, which means competition is very strong. That is why companies must develop new products and services in order to survive. Since developing products that can’t be brought on the market is just a waste of time, the innovations that companies make must be created in order to fit and improve the existing activities.
However this approach prevents new products from appearing which can lead to missed opportunities. Moreover, these constraints limit the possibility a company has to bring what it desires on the market. The fear of failure is what stops organizations implementing new projects.
One of the reasons why corporate entrepreneurship exists is that companies have to face a large number of competitors who are entering each market due to the customers increased demanding. In these circumstances firms have to do anything that is possible to maintain their position and satisfy their clients’ needs. They must become more flexible and improve their capacity of innovating.
Due to the changing and competitive business environment, managers should not rely on their past company behavior because new industry trends appear all the time, so they must rise to their clients expectations. Employees are encouraged to be creative, and that is how they bring valuable knowledge to the organization. Making informed decisions and taking risks becomes easier under these circumstances.
In order to become the top player in the market, a company must remain competitive and it must use knowledge as a way to increase performance and profitability. Case studies and research are highly recommended in these situations because they can help discovering problems nobody knew about.