 Welcome learners, I am Dr. Smriti Sikhas Uttarit, so in this video lecture I will be discussing about natural and technological environment and this is the part 2 of the video lecture. And these video lectures are made for the business environment course. So in my earlier video lecture about the natural and technological environment, I have discussed about what is natural environment and what is technological environment. So in this video lecture I will be discussing about innovations. So this is the second video lecture and after completion of this video lecture you need to self check your progress and at the end of the lecture you need to participate in the discussion forum so that you can communicate with us about your level of understanding. So first let us discuss about what is innovation. Innovation is defined as a new idea, device or method, however innovation is also viewed as the application of better solutions that meet new requirements, unmet needs or existing needs. So innovation is anything new. So this may be accomplished through introduction of a new product that means an entirely new product which comes into the market. Then it can be use of new method of production. Suppose for your existing product we have used some new method, then also we can say it as innovation. Then opening for a new market, suppose the product is already launched in the developed countries but it has came recently to the developing countries. Then for developing countries we consider that as innovation. Then our fourth point is a very new source of raw materials supplied. Suppose the product remains the same but instead of petrol we are using CNG gas. So then we can say it is again an innovation. Then the fifth is finding substitute products. So instead of the core products if we are finding some substitute then again we can consider it as innovation. And then lastly reorientation of the industry. So if we reorient the industry suppose the production process entire things we have changed then also we will consider it as new to the market that is innovation. So basically innovations are divided into two categories. One is your evolutionary innovation and the other one is your revolutionary innovation. So first let us discuss the evolutionary innovations. Continuous or dynamic evolutionary innovations so that are brought about by many incremental advances in technology and processes. Suppose for example cars, motorcycles, bikes etc are always made new with the addition of new features and applications. So in case of evolutionary innovations the existing products suppose something is there then on top of that we have if we have added some new things to that then we will consider it as evolutionary innovation. Suppose for example refrigerator earlier it was simple basic one white refrigerator then we have added suppose double door refrigerator then there are many colors of refrigerators were also available so these are considered as evolutionary innovations. Now we come to revolutionary innovation so it is also called as discontinuous innovations. So here the things are often destructive and new launching the apps for car rental has changed the entire business of availing the services of rented cars. So evolutionary innovations are totally new to the market. Just here I have given example of car rental. So earlier when we need to book car suppose one day or two day prior to that we need to communicate with them. But now because of this Ola Uper and all those services it has changes the process of car renting. So this is considered as revolutionary method of innovation. Next we will discuss about the technology and competitive advantage. So Michael Porter has pointed out in his well known work on competitive strategy that technological changes one of the principal drivers of competition. So because of these changes in the technology the entire competition has changed. So because of technology new industries are created the structure of existing industries may change the market leaders in many industries can enjoy the leadership advantages because of their superiority in the domain of technology then innovation is the key weapon in achieving sustained competitive advantage. So in many industries suppose for example Sony in case of televisions music systems they were the pioneer they were the market leader it's because of their technological upgradation. So Michael Porter has pointed out that technological change is not important for its own sake it is important because it affects competitive advantage and structure of the industry. So to remain market leader in the industry the companies need to have the best technologies suitable for their organization. So this technological competitiveness is very much important in the business environment. Now we will discuss about information technology and business environment. Information technology has been instrumental for changes in the business environment. So I have discussed it as below first one is design the designs for these new products and processes are facilitated by computers. So early years people are used to prepare the designs manually but because of this computer aided design care or computer aided manufacturing which is called as CAM have changed the way the things are designed and manufactured. Just imagine now to paint a wall the ACN paints or other companies they were using this CAD and CAM and it has got revolutionary changes. Then relationship management customer relationship management practices have changed a lot because of this information technology. You might have come into suppose if you went to any bank then you have account in bank then every year whenever your birthday comes they will wish you all these relationships they were maintaining only through this information technology. So when I click on the mouse the customer relationship officer in an organization can get the entire information regarding purchase pattern of a customer and this will be very much helpful for them for preparing their future products. Then our just in time production it has helped a lot in streamlining the entire production process and thereby helps in ensuring just in time production. So when the manufacturer knows what kind of things customer wants at what time how much quantity is required so it will be very much easier for the manufacturer to prepare the goods as per the requirement of the customers. So with the help of electronic data exchange and effective management of relationship with the suppliers efficiency in production process can be achieved. The inventory holding cost can be reduced so which is again one of the best things for business environment. So next comes that industry structure as stated earlier because of information technology there has been emerging trends of industry convergence the music download the video download use of camera in the cell phone etc has changed the structure of the music industries. So the industry structure has totally changed because of this information technologies development then consider organizational intelligence because of internet and other information sharing practices in the organizations the employees are better placed for timely decisions. Information is shared and very faster speed so organizations are making use of e-tendery e-procurement etc then productivity and flexibility. It has facilitated improving productivity in the organizations. It has facilitated flexibility to think about the paint dealer you can choose any color of your interest and the paint dealer will get the particular color in a machine with the help of computer it has become highly flexible. So everything has become possible and the things have become much more flexible in today's modern world because of the improvement of IT sector then technology transfer technological changes also affecting the nature of investment previously high technology production had been limited to technologically developed and rich countries only but today technology is more easily transferred to the developing countries where sophisticated production facilities can be installed with workers at comparatively lesser wages. So which is again another benefit for the organization. Now my first question is what are the two categories of innovations hope you have understood this video lecture I will see you again with another video lecture thank you.