Innovation and Competitive Advantage

Focus of Innovation

• Solves a problem

• Makes something better, faster, cheaper

• Addresses an unmet need

• Takes advantage of timing

• Reinvents or repackages an existing product or service

• Extends a company or product life cycle

Product Life Cycle Stages

• Introduction: Discovery, Experiments, Signal-gathering

• Growth: Polish, Reliability, Onboarding

• Maturity: Moat-building, Optimization, Expansion

• Decline: Sunsetting, Simplification, Transition planning

Product Extension can keep a mature product relevant longer.

Innovation as a Competitive Advantage

• Differentiation: Unique features and benefits

• Cost Leadership: Efficiency and lower prices

• Focus: Serving a specific market segment

Types of Innovation

• Process – a new way of doing something

• Product – a significantly new feature or update

• Service – adds convenience or personalization

• Technology – applies new technology to make things better

• Cost/price – delivering something at a lower cost

• Marketing – packaging, placement, promotion, price

Incremental Innovation

• Improves a product service

• Improves delivery

• Makes it better, more competitive

Disruptive Innovation

Disruptive

• Creates a new market

• Disrupts the current market

• May render former business models obsolet

Value Proposition

• Usually, a short statement that describes your specialty, value, or distinctiveness

• Ideally, a compelling reason why customers should choose your product or service over competitors

• May be reflected in a motto, slogan, or tagline

Innovation Process Approaches

Stage-Gate – progress checked to control risks/costs

Design Thinking – highly focused on users

Lean Startup – rapidly build, measure, learn

A Practical Approach

Discover – the need and competitors

Define – market size and mission alignment

Develop – prototype, test, and pilot

Decide – funding and commitment

Deliver – scale, measure, and refine

Keys to Success

• Focus on customers; serve their need

• Understand the market; solve a problem

• Tell a compelling, truthful story

• Limit your priorities