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Knowledge and Creativity

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Question 1: How Can Knowledge and Creativity to be used to provide competitive advantage in a competitive marketplace – and how might this advantage be protected and preserved at present?


In today’s global business, sustaining a competitive position is a supreme concern. Competition within the small and medium business industry is intense with many competitors. The ability of a firm to survive depends on how the firm takes advantage of the opportunities in the market place to satisfy its customers. Many companies have demonstrated their capabilities of being been sensitive to their customers by trying to understand customers’ needs and customers’ complaint taking initiatives to meet those needs.

Knowlegde & Creativity

According to Webb (1998, 110-15), information is the potential for knowledge. Knowledge is actionable information that can be used across the entire organization. The more knowledge an organization possesses, the more it can reduce uncertainties. Knowledge and information are the crucial assets of a business and there is a need to learn to handle these assets in new ways. Traditional monitoring systems which were designed to deal with tangible inputs & outputs are no longer adequate to survive in the market. Organizations are required to share information and knowledge internally as well as learn to adapt more quickly to external circumstances in order to retain their competitive advantage.

In other words we can say that simply recycling old knowledge will not serve the purpose of survival but creation and application of new knowledge is required to achieve the lofty peak of competition and success. However it is important to keep in mind that the created new knowledge should be useful for the organization.

The creativity is one of the strong corporate commitments to achieve as an Innovation Leadership. It can motivate the entrepreneur or scientist to create an idea of invention. “We are always saying to ourselves… we have to innovate. We got to come up with that breakthrough.” (Bill Gates, Microsoft). “Creativity involves an ability to come up with new and different viewpoints on a subject” (Anon 2007, P.88). It is also said that “Creativity is the generation of novel ideas that might meet perceived needs or respond to opportunities for the organization” (Daft, R. L 2006,P. 396).

Creativity plays a major role in today’s business as it shifts the concept of zero-sum game into non-zero sum game. In other words from a win-lose to a win-win strategy. It opens new market opportunities without referencing competition or using war analogy. “Every organization can break free the head-to-head zero-sum competition and open up the blue oceans of new markets” (Kim, W. C. and Mauborgne, R. 2007, p. 20).

Competitive Advantage

The business model focus is on value creation and how the value be captured. Competitive advantage enables the firm to create superior value for its customers and superior profits for itself. According to the Competitive Advantage model of Michael Porter, the competitive advantage is defined into three generic marketing strategies which are cost advantage and differentiation advantage and focus strategy.

A cost advantage will be achieved when the same product or service as competitor is delivered with a lower cost. A differentiation advantage will be attained when exceed benefits of competing products are delivered. A focus strategy, whether it involves differentiation or low cost, or both, concentrates on a part of the marketplace or product line. The competitive approach takes aggressive or protective action to make a strong position in a business, with the intention of achieving a successful competitive strategy as well as make a greater turnover on investment. The objective of most business strategy is to obtain a sustainable competitive advantage.

Ways of knowledge and creativity provide competitive advantage in a competitive marketplace

We have noticed a change recently, moving from knowledge based activities to creativity, innovation, entrepreneurship and imagination (Broeck, Cools and Maenhout 2008; Oke, Munshi and Walumbwa 2009). Increasing globalization has resulted in more business opportunities but the marketplace has also become more crowded and competition has increased (McMullan and Shepherd 2006). Creativity enables the entrepreneur to act on these opportunities in ways which can result in competitive advantage for the organization. It can provide the basis for innovation and business growth, as well as impacting positively on society generally (Bilton 2007, quoted in Fillis 2006).

As average business longevity is short, innovation becomes one of the sustainable sources of competitive advantage. Tidd et al (2005) define that there are four types of innovation: 1) Product innovation – a new products or developments on products, e.g. smart phone. 2) Process innovation – assembly line process, e.g. just-in-time production. 3) Positioning innovation – adjustment in context launched, e.g. Lucozade repositioned as a sports drink instead of a medicinal drink 4) Paradigm innovation – adjustment in models does, e.g. skype

Either one type of innovation could benefit the corporate to obtain on favorable terms of competitive advantage. Each of them could be a remarkable step of corporates to be a cost leadership or differentiation advantage.

Protection and preservation the advantage

If the innovation is the creation of new knowledge and inventions and indeed, they are valuable assets to the company. This causes a question that how we ‘protect’ the knowledge and creativity. According to August R. 2004, “Intellectual property is, in essence, useful information and knowledge.” Effective Intellectual Property management should enable a company to use their intellectual property assets to improve their competitiveness and strategic advantage. The issue is, if these rights are not protected, someone can ‘use’ a valuable invention created by the originator without their permission and gain advantage over them and even force the company out of the market.

There are four major legal tools for establishing ownership of the inventions, innovations, and intellectual properties which are patents, trademarks, copyrights and registered designs. According to the Hong Kong Intellectual Property Department, the definitions of the tools are as following:

Patent – protects your invention by giving you, the patent owner, a legal right to prevent others from manufacturing, using, selling or importing your patented invention. Trademark – a sign that distinguishes the goods and services of one trader from those of others. Typically a trademark can be words (including personal names), indications, designs, letters, characters, numerals, figurative elements, colors, sounds, smells, the shape of the goods or their packaging or any combination of these. A sign must be capable of being represented graphically in order for it to be registered as a trademark. Copyright – the right given to the owner of an original work. This right can subsist in literary works such as writing, software, musical works, dramatic works. Registered designs – protect only the appearance of products, for example the look of a computer monitor. Registered design owners have the right to prevent others from manufacturing, importing, using, selling or hiring the design product.

Corporate can use some resources, such as installed customer base and reputation of the firm, to protect their cost or differentiation advantage as to prevent competitors can acquire easily.


Creativity and knowledge in order to retain the corporate one step ahead of the competitors in this knowledge economies. The innovation is an integration of knowledge and creativity. It can be used to provide competitive advantage in a competitive marketplace. The protection and preservation of these advantages is essential, or else the advantage may be lost to competitors.


1. David A. Aaker, Strategic Market Management, 10th Edition, October 2013, John Wiley & Sons, Inc. 2. David P. Baron, Business and Its Environment, 7/E, Stanford University, ©2013 3. Different Between.net, Difference Between Invention and Innovation, http://www.differencebetween.net/language/difference-between-invention-and-innovation/ (Assessed on 18 December, 2013) 4. Intellectual Property Department, Definition of Trademarks, Patents, Designs and Copyright, http://www.ipd.gov.hk/eng/home.htm (Assessed on 18 December, 2013) 5. McMullan, J.S. and Shepherd, D.A. (2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur, Academy of Management Review, Vol.31, No.1, pp.132-152. 6. Daft, R. L. (2006), The New Era of Management, International Edition, Thomson South-Western. 7. Kal Bishop, Types of Innovation, http://ezinearticles.com/?Types-of-Innovation&id=38384 (Assessed on 19 December, 2013) 8. Kim, W. C. and Mauborgne, R. (2007), Blue Ocean Strategy: We can now create wealth from everyone, Leadership Excellence, Vol. 24 Issue 9, September, p. 20. 9. McMullan, J.S. and Shepherd, D.A. (2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur, Academy of Management Review, Vol.31, No.1, pp.132-152. 10. Oke, A., Munshi, N. and Walumbwa, F.O. (2009). The influence of leadership on innovation processes and activities, Organizational Dynamics, Vol.38, No.1, pp.64-72. 11. QuickMBA.com, Competitive Advantage, http://www.quickmba.com/strategy/competitive-advantage/ (Assessed on 17 December, 2013) 12. Van Den Broeck, H, Cools, E. and Maenhout, T. (2008). A case study of art economy: building bridges between art and enterprise: Belgian businesses stimulate creativity and innovation through art, Journal of Management and Organization, Vol.14, pp.573-587. 13. Woopidoo!, Business Quotes by the Worlds Richest Man Bill Gates, http://www.woopidoo.com/business_quotes/authors/bill-gates-quotes.htm (Assessed on 19 December, 2013)

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