Have you ever wondered what goes into creating a great technological device? Innovative strategies play a key role in how products are created. An innovative strategy is a plan used by businesses, companies, brands, and organizations to boost delivery of products and services. (also see difference between innovation and invention)
Innovation strategy is essential for companies that want to gain a competitive advantage. An excellent innovation strategy should be inspiring and add something unique to the product and services being developed. As an organization, you want to increase your product and services’ overall value and create something brand new that will attract potential customers.
Innovative strategies should be creative and be out of the ordinary. When thinking about innovative strategies, it’s impossible not to think of Microsoft, Apple, or Google. Apple, for instance, has created and continues to create unique products and services of tremendous value and success. iWatch, iPad, and iPhones are Apple’s innovative products born out of excellent innovative strategies. However, smaller businesses might not record Apple’s success in one day. The truth is that you can never underestimate the success innovation strategies can bring your company.
In this post, we will consider what is innovation strategy? business innovation strategy, innovative captive strategies, innovation strategy examples, strategy and innovation.
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What is Innovation Strategy?
Innovation strategy is a detailed plan and common innovation mission that aims to create new values, products, and services that potential customers are willing to pay for. It consists of policies and core values geared towards achieving future organizational growth. Innovation strategy should be anchored on a clear vision and mission statement to be effective.
Why Innovation Strategy is Important
An excellent innovation strategy can:
Clarify goals and priorities: An effective innovation strategy outlines the goals and priorities of an organization’s innovation activities and helps focus resources and energy on reaching those goals.
Foster alignment: With an effective innovation strategy in place, different sections within an organization will achieve common goals rather than pursuing individual goals and priorities.
Keep business from priding on its last success: Even businesses that start as innovators must continue to strategize and innovate intentionally to remain relevant in their field of endeavor.
Help businesses achieve long-term success: Without an effective innovation strategy in place, a company is not likely to maintain a competitive advantage and keep customers engaged over a long term.
Types of Innovation
For most small businesses, innovations are small improvements on existing products and services. However, innovation can also be seen as a revolutionary technological invention or digital business model that changes activities in the industry.
To learn more about these innovations, let’s consider the various types of innovations.
1. Incremental Innovation
Incremental innovation involves making a series of improvements or upgrades on an organization’s existing products and services. The upgrades made on the products and services are aimed at improving and existing product’s competitive differentiation, productivity, and development efficiency.
2. Disruptive Innovation
Disruptive innovation is a type of innovation that creates a new value network and new market and eventually displaces existing/leading products, services and established firms. It generally refers to a kind of innovation that transforms highly expensive and sophisticated products and services (only accessible to high class customers) to those affordable to all category of users.
3. Sustaining Innovation
This innovation is also called routine innovation and it refers to a type of innovation that happens on an incremental basis in response to customer and market demands for products and service improvement.
4. Product Innovation
Product innovation is the common form of innovation in the business world. It is related to improving the nature/features of products and services. Various components of the previous products and services are improved to get better ones that attract more potential customers.
Product innovation involves fundamental new technologies and can build combinations of existing technologies in different ways. Product innovation can give birth to a new product that has never been in existence before.
5. Service Innovation
Service innovation is a product, service, or concept that is greatly improved in new or existing markets. For instance, this could be a new client distribution channel, client interaction, a system that improves process transmission, or a new service/solution in the client interface.
The way you deliver your services is a great way to stand out in business, attract more sales, generate more value for potential customers and generate more shares/revenue for your business.
A key goal of every successful business is providing products and services that make life easier for customers and meet their needs. The more you meet customer’s needs, the better your future as a corporate organization.
Uber is a key example of an innovative service company that has experienced growth beyond its core business values worldwide.
6. Business Model Innovation
Business model innovation refers to the way companies work to make money. It consists of core channels, strategies, resources, values, and target customers. It is a fundamental change in the way companies provide value for their target audience and potential customers. In practice, business model innovation happens by developing new pricing mechanisms, sales channels, and sources of income.
The limitation of business model innovation is that skills and processes optimized for business success may become transformation targets.
To create a new business model, you need to work on disruptive innovations and change the fundamental decisions your business is working on.
7. Market Innovation
For any innovation to be effective, it needs to be visible, i.e., people need to know how to find it and benefit from it. The main goal of market innovation is to increase markets shares or open a new market. Therefore, innovation is mostly considered marketing innovation if it significantly changes the traditional marketing strategy of the company concerned.
The ability to connect with your potential customers is an important component, and there is always room for improvement in customer engagement and relationships. In addition, due to advancements in technology and customer preference, new marketing innovations are needed to promote new and existing products, services, concepts, and processes.
8. Architectural Innovation
Architectural innovation refers to the reconfiguration of existing products and services technologies that bring about improvements in every way possible. Examples of architectural innovation include flexible manufacturing systems and computer network systems. In this innovation, the main components of a product remain the same and bring about progressive growth in the business, attract more potential customers, and increase revenue.
9. Social Innovation
Social innovation is a technological innovation that seeks to meet social needs better rather than solving existing business problems. It is a new practice and can be provided or funded by commercial or public entities. Social innovation is very important for many reasons. For example, it improves working conditions, develops communities, provides more education, and improves population health.
Importance of an Innovation Strategy
Every business, brand, company, or organization innovates one way or another, but the strategy varies. The only reason why most organizations cannot innovate is that they lack a clear-cut innovation strategy.
Here are some reasons why innovation is important:
- Innovation strategies result in a clear vision and focus
- It helps you to create a reliable system to match your competitive needs
- It helps to trade-off sessions and choose all the elements of the innovation system
- Without a clear-cut innovation strategy, different parts of an organization can wind up easily, resulting in conflicting priorities.
- An effective innovation strategy makes the innovation process measurable
- Innovation strategy promotes innovation culture
How to Develop an Effective Innovation Strategy
1. Have a Clear Objective and Strategic Approach
The first step to developing an effective innovation strategy is to define your innovation objectives and the strategy behind them. As a principle, your innovation strategy should help support your overall business objectives.
For example, Olay’s vision is to become a leading skincare brand globally is clearly seen in its innovation strategy, chosen markets, and channels.
2. Know Your Target Audience and Top Competitors
The second step to developing an effective innovation strategy is defining your target market. No matter what you do, not everyone will patronize your products and services. Therefore, you need to know who your potential customers are and strategically plan on how to attract them.
To innovate and respond to your customer’s needs, you need to study, listen and understand what they truly want.
3. Define Your Value Proposition
After having a clear objective/strategic approach and knowing your target audience, the next thing you need is to define your value proposition. This, to us, is the most important step in developing an effective innovation strategy. Defining your value proposition has to do with asking yourself strategic questions such as How will you win? What type of innovation strategy will you adopt to give you the highest level of competitive advantage?
Therefore, you need to focus on creating values that help your customers spend less money and are willing to pay for the products and services you’re offering.
4. Assess and Develop Your Core Areas of Strength
When access your core areas of strength in business, you need to consider the following areas:
Your ability to connect and develop these capabilities are essential in developing an effective innovation strategy.
5. Establish Your Innovation Systems and Techniques
To develop an effective innovation strategy, you need to identify the strategic innovation systems and techniques you need to put in place. You need to define which innovation systems you need to link your innovation infrastructure elements.
You need to understand that there are different innovation strategies, and not all of them are needed at every stage of your business growth. Therefore, you need to know the ones to employ to give you the desired business outcome you seek to achieve.
How to Implement an Innovation Strategy
1. Be Focused
After you’ve put everything in place and picked your strategic approach to innovation, it’s time to put your innovation strategy to work. Your long-term strategic goals give structure and support to your innovation work. You need to realize that you will not achieve your overall goals in one day, but setting boundaries, staying focused on your end goals, and being consistent is the only way to achieve anything worthwhile in your business.
2. Align All Innovation Strategies with Your Business Goals
Most businesses struggle to bridge the gap between business objectives and innovation strategy. Therefore, to succeed with innovation strategy alignment, you need to aim to communicate the role of innovation within the confines of your business. In addition, you need to ensure that the innovation strategy and process are fully embedded into your digital business strategy.
3. Integrate and Communicate Your Strategy to Your Team
There is no way you will succeed in business without an excellent team working with you. In addition, they need to be aware of the strategies you’re adopting to achieve the organizational goals. To integrate your innovation strategies into your organization, you need to partner with the right people within and outside your organization and set individual goals that will favor your innovation strategy.
4. Measure Your Growth Systematically
Systematic measuring is the best way to adapt to changes in the business and position your team to achieve better outcomes in the future. Also, picking the right optimal measurement metrics helps control the progress.
Types of Innovation Strategies
Let’s discuss innovation strategy examples and how leading brands in the world used excellent innovative captive strategies to attain greater heights.
1. The Business Innovation Strategy of Microsoft
Microsoft has struggled to achieve radical innovation. That may soon change. Now, Microsoft’s innovation strategy involves going for R&D to advance its position in a range of markets – including healthcare.
Although the company used incremental innovation to remain relevant over the past years, it struggled to achieve radical transformation. However, the narrative is already changing with Microsoft’s innovative R&D strategy, which seeks to position them ahead of its competitors.
2. The Strategy and Innovation of Google
Google’s innovative strategies span through the different matrices; as such, it is difficult to associate them with just one innovation archetype. However, the notable success recorded by the parent company can be traced to its heavy investment in R&D. This clearly shows that it is leveraging and targeting architectural, disruptive, and radical innovation.
3. The innovative captive strategies of Apple
In time past, Apple was known for outsourcing R&D initiatives instead of focusing on product rebranding and development. However, the narrative has changed recently; the company began developing capacity in-house via internal accelerators and acquiring startups associated with their line of operation.
4. The Business Innovation Strategy of Samsung
Samsung’s innovative strategy all these past years has been about incremental innovation (as clearly seen in its curved mobile phone screens). The organization’s innovation plan in recent years has been to diversify its portfolio. Currently, its R&D section is exploring digital health, autonomous mobility, privacy, security, infrastructure, internet of things, artificial intelligence, machine learning, data-center infrastructure, and lots more. Samsung is also investing strategically in several external initiatives to reinvent its brand and businesses.
5. The Innovative Captive Strategies of Amazon
Having recorded tremendous progress in business over the past few years and scaling impossible heights, Amazon is maintaining its startup culture while scaling up. Creative innovation is the bedrock of Amazon’s strategies- not just the R&D innovative strategies.
Innovation strategy is about making the right choice between several possible feasible options and strategies. To succeed in developing the best innovation strategy, you need to identify the best innovative captive strategies to position your business for success.
However, you must note that choosing the right innovative strategies and innovation strategy is just the first step; you need to also create a strategy for testing and validating the approach that suits your business.
For your strategy and innovation to work, seamless integration and strategic alignment to your core values and objective is the key. Succeeding in any business innovation strategy takes a combination of the right practices, skills, hard work, consistency, focus, and the right knowledge. We put up this post to help you succeed in all your business endeavors. Therefore, we hope that the information we have provided in this post will position you strategically for business growth.