Product development
Stealing the market for innovative new products
While investment in product development innovation is the best way of maximizing profitable growth, the risks are high and the pitfalls many. Companies frequently shy away from the difficult decision to invest in ground breaking innovative products, often for understandable reasons - market rejection, shareholder reluctance, etc.
The most innovative companies accept these risks and manage innovation in a structured and risk aware manner. These companies also generally accept that it is acceptable to fail (once in a while). It is perhaps true that if you cannot accept occasional product failure then you are not trying hard enough to innovate. The trick is to identify failure early enough to be able to minimize the commercial impact.
Other manufacturing companies - particularly in consumer products - have a strategy of not being ‘innovation leaders’ but ‘very close followers’. Why not let your competitors pioneer the way and establish a new market acceptable to the consumer - and then quickly find a way of doing it better. Hence ‘stealing the market'.
To the true innovator this is heresy, and there is a risk that the innovator's solid IP position may be a barrier to competitive launch, but there are some interesting advantages too:
- letting a competitor establish the market eliminates much consumer acceptance risk
- market research costs are reduced
- improving an existing innovation is much easier than coming up with a new one
- the first innovative product launched is highly likely to have weaknesses that can be exploited by a ‘close follower’ strategy
- time to market can be much quicker.
Contact us
For further information call +44 1763 267492 r e-mail: innovation@paconsulting.com
|
