Hello Smart People! Did you know that 84% of executives claim that innovation is a key element of their growth strategy? But it’s no longer whether you should be innovative, but finding the best kind of innovation.
Today’s enterprises face the challenges of a global health pandemic and the increasing threat of well-funded start-ups. If fast-paced start-ups want to stay competitive when they hit the market, they need to adopt new technologies and different types of innovations that improve their business models. In this way, we can provide the most convenient and high-quality solutions to market problems.
Four main types of innovation will help you to manage the challenges and yo improve your business models:
Incremental innovation is the most common form of innovation. Leverage existing technology to add value (features, design changes, etc.) to customers in existing markets. Almost every company is practicing step-by-step innovation in some way.
Example: Gillette is constantly updating the razor, adding new features such as additional blades, heated razors, and swivel heads.
Disruptive innovation, also known as stealth innovation, occurs when new technologies and products are developed to serve existing markets. This type of innovation is made possible by new technologies that provide more efficient and accessible alternatives than those already on the market.
Companies are applying disruptive innovations to meet the changing needs of their customer base, creating entirely new value streams and service offerings that never existed before. Disruptive innovation usually occurs at the bottom of the market segment, but as the technology matures, it eventually replaces established market leaders. This innovation will occur in the medium to long term.
Example: Netflix is an example of a successful textbook for disruptive innovation strategies. Netflix started out as a DVD mail order company, providing cost-effective and convenient products to previously overlooked market areas.
Architectural innovation simply means taking lessons, skills, and overall technology and applying them to different markets. This innovation is amazing to attract new customers as long as new markets are accepted. In most cases, it relies on proven technology for reintroduction, so the risks associated with architectural innovation are low. Although it mainly requires adjustments to the requirements of the new market.
Example: Previously, copiers were large and expensive machines and were only purchased for large offices. Canon and others have reconfigured these copiers for smaller desktop use, creating a whole new market for people buying personal copiers / printers.
Radical innovation is the application of new technology to new markets by companies. This type of innovation occurs when a new product, process, or service with significant technological advancement has a significant impact on the market and completely replaces an existing offer. This innovation will occur in the long run.
Example: The integration of the iPhone, which paved the way for the modern smartphone market, and agricultural machinery with sensors that provide farmers with data that will change agriculture.
Which innovation do you think will suit your company better? Do you know any examples for each innovation, Smart People?
Author: Mia Patricia | Illustrator: Rizky Sabilurrasyid