latively knowledgeable firms can acquire, produce, process, store, ship, or sell products at lower average cost per unit than relatively ignorant ones. The sources of information economies run from intelligence on costs, prices, and policies of the enterprise's strategic targets, to data on economic, social, political, and technological trends affecting its products. (3) Innovation Innovation is the adoption of the new products or processes. Product innovation involves the creation of new products, or of new features in existing products, in order to satisfy customer needs or wants which were previously unmet. Process innovation, on the other hand, improves the efficiency or effectiveness of a process involved in the production or delivery of a product. It generally addresses one or more of the links in an enterprise or industry value-chain. It may involve technological change, organisational change, or often both. An innovation thrust can be aggressive, or employed defensively to imitate or neutralise a competitor's innovation. (4) Growth There are several ways in which an enterprise can grow: product growth, which may involve: o'length', i.e. new products of the same kind as existing ones (e.g. a PC supplier may add laptops and handhelds to its desktop lines); o'depth', i.e. variants to existing products (e.g. additional options which can be selected by customers when buying a desktop); and o'width', i.e. new products which complement existing ones (e.g. modems, printers and accessories). functional growth, by performing additional business functions. Often this is through 'vertical integration' along the industry value-chain, which may provide benefits from direct control over supply, distribution or service, such as cost reduction, quality assurance or reliability. Sometimes the new functions are support services, such as the gathering and delivery of industry statistics; geographic growth, by acquiring from additional locations, or...
