Entrepreneurship and Innovation

Question 1

1. What are the main drivers of using biofuel in the airlines industry?

There are two main drivers for the application of biofuels in the aviation industry. The first one is the financial threat that is posed by the reliance on conventional energy. Overlooked by the doubt of rising cost of the oil and there being no sign of it dropping in demand for energy and integrated with a number of market uncertainties like weather, the cost of the fuel for the aircraft does not seem to be balanced and such unpredictability may bring about a great amount of pressure on the management of the airlines (European Biofuels Technology Platform, 2009). Even though such threats could be done away with financially, the matter has not yet been sorted out with the continued reliance on the non-sustainable energy.

The problem gets worse with the continued transformation of the climate. The environment matters are quite vital in the present time to a great extent that they are offered the same consideration as the economy on a country’s agenda and world issues. The alteration of the environmental matters into business management aspects is bringing about more policies and procedures, which means that a hard working surrounding results (Khurana, K. 2009, pp. 293). Organizations target to stay on the fore front in revenue ability while offering a great amount of focus to their environment situation. The responsibility of a company on the environment matters has come to be the second driver for the desire to apply biofuels in the aviation industry.

The other driver is the security and diversification of the energy creation. Energy production is a resource that is fast getting depleted considering the number of applications that it is subjected to as well as the growing number of industries. The number of countries that are shifting from developing third world countries to the developed first world countries is quickly gaining momentum. A large number of industries are coming up with the manufacture of vehicles and aircrafts and this will require this resource to be safeguarded form this rising companies (European Biofuels Technology Platform, 2009; Strategic Energy Technologies Information System, 2012). This has led to the focus of this resource to shift to other sources so as to safeguard these important resources. The biofuel is a source that shifts the focus so as to safeguard the future as well as diversify the production of energy. It is with diversification that focus and pressure will shift to the natural fuel. Countries will be able to get another option for fueling their aircrafts as opposed to just one source.

2. Airlines in Europe and Australia are planning to use aviation biofuel in future
   to enhance their corporate performance. Use the model advocated by Prajogo
   and Ahmed (2006) to critically evaluate what are the main factors may affect
   the innovation performance?

Innovation in the past have been keen on technological aspects of innovation, it has taken into consideration all of the aspects of innovation; research and advancement, physical education among others. The aspect of inclusion the human has begun to take shape in companies. A basic macro model of innovation composing of the human and the technological aspects was advanced by Prajogo and Ahmed (2006). This was called Stimulus-Capacity-Performance (SCP) method.

Prajogo and Ahmed (2006) applied empirical research do not demonstrate that innovation stimulus aspects have direct impact to innovation performance. In the other case, the study show that the connection between the stimulus aspects applied at the company level advanced the innovation capacity and its innovation ability brought about the ultimate innovation results.

The use of biofuels by the Airlines in Europe and Australia consider the strategic application in the circumstances where client’s needs and market situations are altered every time, it requires that companies have to be always innovative in a number of areas. Moreover to goods and service innovation, companies similarly have to take into consideration the procedures and business structure as differentiation chances. In situations that are of high velocity, a company’s efficiency is reliant by it capability to reinvent and transform every time. Companies and the notions work in coherence and hence create results and reactions to these circumstances. To acquire these innovation trials, the airlines in Europe and Australia put to operation a number of innovation management frameworks and apply contrasting approaches to apply the modifications on a constant ground. This is in reference to Prajogo and Ahmed (2006) that stated that so as to acquire high performance in innovation, there has to be an advancement of cultural and behavioral aspects for innovation.

It is through the management of these innovation procedures and the placement of innovative concepts in operation is making attempts which bring about a number of issues for companies. Holistically, airlines in Europe and Australia have to make equal the main pressure that is there between the desires for stability and the space for inventiveness with handling innovation (Hornsby, Kuratko & Zahra, 2002, pp. 253-273). This is supported by Prajogo and Ahmed (2006) stating that the capacity if having control of the technological and R&D knowledge from within and without the company is the precise trend that motivates innovative performance. The innovation administration approaches put into operation and applied in a number of companies basically brings about a number of issues: over confidence which is every procedure that is set up and observed, bringing about uninspired application or the absence of focus which is a creative process that brings about undependable business implication (Prajogo and Ahmed, 2006). Prajogo and Ahmed add that for creativity to be acquired there has to be the application by managers. More so in adverse times, these trends may be exaggerated and hinder application. Another issue is that these innovative management methods need resources and expertise that the airlines in Europe and Australia may not in most times have at their disposal in the right time or size as required. Therefore, a number of companies make stringent effort to focus on innovation processes on the highly regarded levers, so as to put to application these concepts and to create interior confidence by near-term advancement and attainment.

A limited size of innovation management frameworks and approaches may be noted for goods procedure and business structure innovations (Khurana, 2009, pp, 293). In the good or service innovation region, the much regarded instances are the methods that are undertaken with regard to open innovation, the stage-gate procedure and design-thinking. The procedure innovation that we are able to note in addition to the approaches likes Six-Sigma among others.

Considering that these methods are important, in practical a number of them have difficulty in reacting fast to the innovation desires of a flexible surrounding and presenting business outcome make use of the resources that are present. The Prajogo and Ahmed (2006) framework puts to application the expertise of the resources present and gives the airlines in Europe and Australia the ability to be involved in a focused trend fast enough to be a better complement to these approaches. It is this approaches that may be additive to the common approaches stated above and would be more useful in meeting the equilibrium between over-determination and lack of keen application in the prevailing innovative management or performance advancement methods. It would create a company whose staff are flexible in their efforts to bring about innovation, application and hence be useful to the company be being adaptive.

Another aspect for innovation is the evaluation of information after it has been collected. The information is then applied to acquire ideas that are vital to innovation. These ideas are hence applied to form tools and trends of design and production. Information has been vital in creating competitive surroundings (Prajogo and Ahmed, 2006). The emergence of information in the organization has been vital to companies, proving its importance.

The airlines in Europe and Australia are able to learn have a better opportunity of identifying actions and tendencies in the market and constant innovation making it possible for them to react and proactively acclimatize to highly dynamic and difficult markets. Considering innovation is the precursor to a company’s ability to innovate. Innovation in response is attributed to be the method through which organizations shift the new knowledge created in the learning procedure into their plans, in this manner hence becoming an essential origin of competitive benefit. The impact of cultural aspects on innovation performance is mediated using technological aspects and that there is no direct connection between innovations related culture and to technologies.

Question 2

1. What are the possible risks of using biofuel in the airlines industry

In the previous years there have been a number of experiments that have been undertaken by a number of airlines and companies to research the ability of applying biofuel as a complete substitute for or as an integrate part to the conventional jet fuel (IEA, 2009). However biofuels are a substitute for petroleum reliant jet fuel may have some aspect of risks.

Biofuels have a number of benefits when compared to direct petroleum related goods; there are a number of risks related to biofuels similarly. The application of land that is meant for crop production may bring to a decline the land that is kept aside as well as resources for creation of food (Proefrock, 2011). There are a number of issues regarding algae dependent fuels similarly. They are not engaged in a struggle with food for the available land, though the industrial setup required to create algae dependent fuel at certain level is a daunting task to be undertaken.

It is definite that the alteration of any new resource is a difficult task. The advancement of new technologies will be required either way (European Biofuels Technology Platform, 2009). To go on to study other choices and acquire the best combination of feedstock for better fuel options is important not just for the airline industry but for other energy technologies.

The Virgin Atlantic is a good example of airlines that have experimented and is in the process of executing a jet fuel substitute which, as opposed to applying bio resources as feedstock is acquired from waste industrial gas from steel. However if that is dependent on petroleum fuels as the prior feedstock, the future practicality of the procedure being applied is kept in doubt.

2. Discuss about the level of risks acceptance in the context of innovation process management

Any integration of breaches in expertise, enticements and skills may bring about a distraction to innovation. The hindrances to innovation may come about in an organization, in the bigger government or airline surrounding or a city (Proefrock, 2011). Since any transformation changes comfortable operations take place there has to be the local acceptance of risk, a number of major hindrances come from inside the companies and get entrenched in the culture.

 

 

3. Use the model “Critical Factors for Innovation Success” advocated by van de Panneet al. (2003), critically evaluate the Marketing aspect of “Commercial Viability” for the use of biofuel in airlines industry.

 

Marketing

The Van de Panne model looks into the association with clients majorly limits the threat that is posed by overestimating demand. There is though the participation of the clients as an integrate part and does not display any major correlation to the short or lengthier period market performance. The outsourcing of market-based operations, in this case the airline biofuel, has a great implication on the short term market performance of fundamental innovations of the product.

The market performance of the high goods is majorly affected by the participation of the suppliers as a cradle of innovation as well as an associate. The two have a great impact negatively in the future market performance. The suppliers of the product in the task as the sellers have a positive impact on the short and lengthier period market routine of fundamental new goods.

The airline industry has been in a number of difficulties in the efforts to keep a sustainable airline biofuel which it has managed to control. There other step is the focus on the commercialization and high ranking of the product supply which is quite vital (Aviation Environment Newswire, 2012). The airline industry applies efforts so as to assist the industry to develop without the carbon-intensive fuel while also integrating the investment to green employment.

In the marketing aspect of the airline biofuel, there feedstock sources and refining of the procedure is great trend. This has the ability to open venues that make it possible for feedstock to be changed to biofuel and significant technological advancement. Prior efforts for biofuels involved the application of feedstock which was acquired from food cops for instance corn. Though these feed stocks may similarly be applied as food for both man and animals hence bring forth a number of issues concerning its sustainability. The industry is directing its effort in looking into the exploration of application of more develop generation biofuel cradles that are easy to sustain.

The airline industry is not at most likely to depend on one feed stock. Certain forms of feed stock are better in certain climates and places when compared to other places. It is hence anticipated that eventually there is to be a selection of sources for the biofuel advanced and a number of chains that supply the product. A great portion of the research and advancement operation is fixated on the biodiesel and ethanol operations for ground transit (Inderwildi, 2012, pp. 428). This will eventually affect the speed of transit change to be more sustainable. The policy makers should form a funding plan for the research by institution, advancing it so as to involve airline related operations.

De-Risk the Investments in Airline Biofuel

For it to become economically viable, the sustainable airline biofuel has to be charged at level that the market will be comfortable with. Currently, airline biofuel does not offer any competition in terms of price. Though, the traditional fuel is predicated to rise in cost. Conversely, sustainable airline biofuel will be cheaper as this industry continues to grow. Standards and rules that fund the biofuel and application may make quickly this trend and acquire bigger emissions limitations in a smaller time period.

A great gratitude of the range of decline in the cost of the sustainable airline fuel is acquired through the focus of the aspects that control the cost. Considering the technology basis that is close to commercial viability, it is approximated that 85% of the manufacture of biofuel charges are associated to the charges of the feed stock. The technology in use and manufacture of the operation develops, with better results and sustainable biomass becoming easily accessible in commercial sizes the price is set to go down (Kuratko et al 1990, pp. 49-58). The airline biofuel form it being experimented times back, the costs that have been applied to this feed stock as have gone down in big margins. The upholding for the research and advancement will make it possible for the constant elevation of the feed stocks opportunity.

Production is another aspect of the whole cost of the fuel. The industry has set up infrastructure and hence brought about a small desire for more capital investment. Though, in the situation of a sustainable airline biofuel, the production has not yet been advanced and hence requires some focus. There are similarly some major subsidies that have taken over the biodiesel production in Europe and the United States, which may act as hindrance to the creation of airline biofuel.

These high capital investment costs are a significant hindrance to commercialization. In this instance, the governments can take up a great task in limiting the threat applying steps like loan guarantees, tax incentives among others. They may similarly offer a same operating basis with biodiesel offering the same fiscal and cost incentives so as to fasten the formation of the sector.

 

 

 

Offering Incentives for the airline industry in application of biofuel from the beginning

When the policy of incentive efforts takes up a great role in the creation of renewable energy operations, alterations to these aspects create a big threat; rules that target the future with consideration for legal aspects is vital for keen investment to take place.

As opposed to other sources of renewable energy, the sustainability of the airline biofuel is not based on tariffs or rules. A policy like the EU ETS aims at offering investments for the sustainable airline biofuel advancement; though the price is big controller hence its influence will not be that great. The market for a sustainable airline biofuel is basically controlled by other issues among them limiting the reliance of fossil energy and elevating the carbon in airline application (Strategic Energy Technologies Information System, 2012). Hence the sustainable airline biofuels are based to a small extent on the policy threat.

The people that form these policies are able to bring about advancement in the airline biofuel industry through noting the special task that it has in limiting the implication that the airline industry has on the environment. The airlines are not able to make use of other renewable energy that is there for other sectors like wind and water power. Hence creating rules which brings about a standard level for the biofuels alongside other energy and airline alongside other industries is a vital aspect in the airline industry commercialization.

Encourage the stakeholders to commit strong international sustainable model

Standards that are sustainable are formed which will make it possible for suppliers, investors and clients to have plans like what is taken into consideration for a sustainable biofuel. For instance the Switzerland sustainability standard that is formed on the basis of a number of stakeholders taking part is meant to confirm a sustainable production, manufacture and application (McGrath and MacMillan, 2000). Sustainability does not depend on the option selected for the feed stock; it is reliant on the manner through which they are applied, acquired, manufactured and delivered.

Some aspect for sustainability model for the airline fuel is composed of the limitation of the effect on biodiversity, the creation of a very small greenhouse gas, it is sustainable with regard to land, water and energy application, it will not compete with food or bring about deforestation and have a better impact on the society and economic aspects.

Being a global transit sector, the airline industry requires a united standard so as to bring about a model that is sustainable, applicable and similar in a number of places in the industry (Inderwildi, 2012, pp. 428). A section of the standards would take over the advancement of a viable market. Considering that there are innumerable standards in location, controlled and voluntary a vital aspect will be directed to the airline biofuel stakeholders so as to make it possible to correlate the standards so as to elevate the incentives for the future. It is similarly important that a joint accounting framework will be formed so as to accredit the initial one and sustainability aspects of the biofuels.

The advancement of an agreed set of unified standards will make it possible that investment is sent to the biofuels that have an agreed sustainable method hence limiting this threat. The model has to be mutually noted globally. For airline, the global rules are required where it is viable considering the management path of the airline, common facility and global fuel buying needs.

Understand the Local Green Growth

A sustainable airline biofuel in addition to having an advantage to the environment, it is useful in advancement of an emerging industry (McGrath and MacMillan, 2000). Considering the diversity of feed stocks being taken into consideration, there are a number of locations that would uphold the advancement of an emerging, sustainable energy industry. This varies from formation of big sizes in relevant surroundings to the formations of algae on lands.

There is the assessment of opportunities through the airline industry, government and biofuel among other sectors that are there in a country for airline biofuel creation. There are similarly banks that work towards making the process possible.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography

Aviation Environment Newswire, 2012.Airbus welcomes ICAO’s first steps towards a CO2 Standard. [Online] Available at: <http://newswire.enviro.aero/newswire/2012/jul/12/airbus-welcomes-icao-s-first-steps-towards-a-co2-standard> [accessed on 6thb August 2012].

European Biofuels Technology Platform, 2009.Biofuels for Air Travel. [Online] Available at: <http://www.biofuelstp.eu/air.html> [accessed on 6thb August 2012]

Hornsby, J.S., Kuratko, D.E, & Zahra, S.A., 2002. Middle Managers’ Perception of the Internal Environment for Corporate Entrepreneurship: Assessing a Measurement Scale, Journal of Business Venturing, 17(3), 253-273.

IEA, 2009. International Energy Agency: Key World Statistics. [Online] Available at: http://www.iea.org. [accessed on 6thb August 2012]

Inderwildi, O., 2012. Energy, Transport, & the Environment: Addressing the Sustainable Mobility Paradigm. London: Springer.

Khurana, K. 2009. Aviation Management: Global Perspectives. New Delhi: Global India Publications.

Kuratko, D.F., Montagno, R.V., & Hornsby, J.S., 1990. Developing an Entrepreneurial Assessment Instrument for an Effective Corporate Entrepreneurial Environment. Strategic Management Journal, 11(4), 49-58.

McGrath, R.G. and MacMillan, I.C., 2000, The Entrepreneurial Mindset. Boston, MA: Harvard Business School Press.

Prajogo, D. I. and Ahmed, P. K., 2006. Relationships between Innovation Stimulus and Innovation Capacity and Innovation Performance, R&D Management Journal, Vol. 36, No.5, pp.499-515.

Proefrock, A., 2011. Disadvantages of Aviation Biofuels, ecogeek.org.[Online]. Available at:<http://www.ecogeek.org/biofuels/3618-disadvantages-of-aviation-biofuels> [Accessed on 6^th August 2012].

Strategic Energy Technologies Information System, 2012.Biofuels. [Online]. Available at: <http://setis.ec.europa.eu/technologies/Biofuels/info> [accessed on 6thb August 2012].