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True, and my best example is Apple, their key success is attributed to the combination of the iPod + iTunes which was a key innovation in the e-entertainment market which they later extended for Apps with crowd sourcing and produce the array of 'i' devices (iPhone and iPad) which leads to it's current success and huge brand recognization where customers sometimes pay crazy prices to buy their products.
Innovation can be an approach to gain and sustain a competitive advantage, but it is not the only way and for innovation to achieve this goals it must be aligned to the approved company's strategy.
Simple answer is true100%
Innovation is the enrgy or the push for every business life cycle. Each company or a business (product/service) has a life cycle, start with an idea, move to climing stage, mature level and then death or decline. In order to avoid the final stage of this cycle, it is recommended to innovate, adopt innovation strategy (mind) and keep the cycle alive by staying in climing and mature stages.
Each time the product/service decline, introduce a new concept (innovation) for the clients/users to keep it going. Therefore, yes it is a competitve advantage, yes it is a core of every successful business and there are many examples:
Apple, Facebook, Samsung, MacDonald's, etc.
TRUE, I fully agree with you on this. To look different from others you need innovation. All innovative ideas in business will not only save you Cost by maintaining quality but also will provide you cutting edge over your competitors.
To achieve innovation you should continuously look for improvement and reinvest a part of your revenues on research and technology. Innovation comes with experience and practice, learning new things and applying them in your business will always help you over your competitors.
It is True:
Should be Augmented with Creative Thinking.
Innovation is more than Having Good Ideas.
Innovation = Invention + Commercialization
Companies that don’t Innovate will die!
My first thoughts also went to Apple’s iPhone & the whole smart-phone mania. Let me try to add something new.
Facebook innovated the social media arena by learning from old mistake (from Friendster & MySpace) and continuously experimenting with new concepts. Now, and relying on its huge users-base, it has become the absolute authority when it comes to determining social networking site practices & even website usage psychology. (Try to do what Facebook does, cause people are used to what Facebook does since they spend most of their time on it!)
Facebook’s innovations
true, the ugly example Nokia
False, unless you are in a very specific environment (ex: mobile phones) where your customer demands constant innovation.
In some industries, opperational efficiency is a competitive advantage that can be more powerful than innovation.
If you are the most efficient company in your sector, with the costs of R&D associated with innovation, you may be better off with a good Reverse-Engeneering department and designing your strategy like: "I will be the2nd to enter the market, but I will make the same product, with the same quality standards, but for50% of the price for the end cosumer and still maintain my proffit margin".
Remember that this has been the secret for success of many companies across the world in sectors like Automotive (this was the key for Japanese car makers in the70's and80's to compete with europan and american manufacturers) or Computers (how Microsoft created the concept of PC and planted one in every american household).
I am not saying that innovation is never a critical piece of your strategy. I am just saying that you must create your strategy based on what you expect your target market will pay for in5/10 years from now and then define if you need to be a top player in product innovation or not.
According to BCG Matrix, if a company is in Star Stage (high market share: High Growth), to sustain this level and extend its product life, a company must be introduce innovation to his product. other wise according to product cycle. it will starts to decline and complete its life.
Example: LUX Soap, this continuously using "innovation Techniqe" to maintain its market share, market growth and life as well.
The innovation of smart phones started a global economic revolution and competition. Firms that produce them made billion of profits during the last few years. Computers are an innovation and they changed the world. A chip of those processors is in every digital camera today. Some digital cameras have several chips. Since2002 a fourth generation of those fancy high-tech devices is getting produced. Innovation is the wheel of success. In a global world like ours, it has an enormous economic impact.
