Discovering Breakthrough Products
What is a sustainable Breakthrough Product?
Hardly any other word has been used as much as popular economists´ and linguists´ favorite, the famous term: „INNOVATION“.
Nevertheless, what do you think first upon hearing or reading this term? Of course, you may neither be an economic expert nor a linguistic professional.
INNOVATION to us means something is NEW. But is that really true?
Could this term not simply also mean that anything well-known and long since put into practice, suddenly experiences a new „tuning“ by some talented experts who simply work in their current knowledge, combining both, antique wisdom merging into contemporary science, and giving the individual projects also their very special note, always easy to recognize?
So, to „in_no_vate“will certainly always accompany any writer´s vocabulary without having to explain its new definition in our contemporary, sometimes all-comprising need and quest for an over-specific explanatory summary of this particular term.
We hope to have set a variety to comprehensiveness, regardless of the subject.
Discovering Breakthrough Products
Innovations exist in all business areas such as procurement, production, administration, financing and marketing. If a new innovation fundamentally changes the existing industry structure, it is referred to as a business model innovation. An innovation is not only an invention, but also a new combination of existing processes.
Three conditions must be met for every innovation:
- Desirability: it must solve a problem and be desired by the customer or user.
- Feasibility: it must be feasible with existing or a newly developed techniques.
- Marketability: it must be successful on the market, i.e. profitable.
Competition is stiff in our modern globalized economies. To be able to survive, companies are battling for market share.
Since a „Perfect Competition“ never exists in its purest appearance, companies have to find a competitive edge to stick out in the crowd of competing companies.
Perfect Competition explained:
Economists call it „Perfect Competition“, a theoretical market structure, in which the following criteria are met (SOURCE: Investopedia):
- All firms sell an identical product (the product is a „commodity“ or a „homogeneous“ item).
- All firms are „price takers“ (they cannot influence the market price of their product).
- Market share has no influence on prices.
- Buyers have complete or „perfect“ information—in the past, at present and in the future—about the product being sold and the prices charged by each firm.
- Resources such as labor are perfectly mobile.
- Firms can enter or exit the market without cost.
To avoid and escape that state of perfect competition, companies must strive to build an economic advantage. In today’s information and IT-driven economy, such advantage most often arises from the power of innovation. However, where does innovation come from, does a true innovation need a certain framework or a structured proceeding? Is there a way to develop an innovation strategically? Or, are innovations based on a flash of inspiration, or, rare engineering discoveries?
Based on our long-term experience, we, at GTM GmbH – GoToMarket Solution, discovered, that innovations can be generally categorized within the following dimensions:
Profit – How do you generate Money?
- Crossworks and Network – Do you have connections to create value?
- Company Structure – How do you align your assets and talents?
- Business Process – Do you have a superior method of doing business?
- Product Performance – Do you offer distinguished features and functionality?
- Customer Experience – Do you offer complementory products and services to enhance customer experience?
- Channel Policy – What are the ways of delivery to your customers?
- Brand Strategy – Do you succeed in engaging the customer emotionally?
Theory put into Practice
So far the theory. What does this mean in practice? Let´s take a look at well-known brands and learn, how they have successfully innovated their business by means of the above-mentioned strategies, and hence are still developing breakthrough products.
Innovation as a Result of Business Configuration
Many innovations are not directly customer-faced, innovation happens „behind the scene“:
FORD – success factor NETWORK
Henry Ford was the first to control the entire supply chain – nowadays called „vertical integration“ – and hence was able to mass produce automobiles, and, simultaneously reduced cost by boosting productivity.
Google – success factor STRUCTURE
Google´s 20% rule allowed employees to work an various side projects, just do what they like. The result: Google Mail – known as Gmail – and Google News were created that way.
New York Times – success factor PROFIT MODEL
By changing the source of profit from the traditional ad-driven media model to digital user subscriptions model, the famous news and media outlet New York Times stayed ahead of competition.
Apple – success factor PRODUCT SYSTEM
Apple has built an ecosystem of products that work together, creating an additional value and enhanced experience for users, as well as emotional recognition.
Spotify – success factor PERFORMANCE
Created a seamless music streaming product that outperforms competitors in terms of speed and user experience.
Patagonia – success factor BRANDING
Brand activation and content linked to environmental issues creates a unique position in the outdoor apparel market.
Nespresso – success as a result of CHANNEL MARKETING
The customer is locked into the world of Nespresso by means of the Nespresso Club, offering a fully integrated system of „new“ coffee-making. In addition, Nespresso succeeds in building ongoing-sales by single-use coffee pads.
Mercedes – success by CUSTOMER ENGAGEMENT
An augmented reality owners manual replaces the old-fashioned, printed owner-manual, and permanently engages the driver by highlighting car data and additional services and features. That way, the customer is locked into an emotional relationship to the car, and the brand.
And the Question is…,
How do you make Innovations happen in Your Organization?
Together with our partners, scientists and proven experts of various professions, we assist you to find and build breakthrough-innovations, and even establish a culture of innovation in your organization.
We are looking forward to learning about your ideas and your projects.