How to Develop an Innovation Strategy
An innovation strategy is defined as creating successful and unique products or services in order to fulfill the unmet needs of the customers and to maximize market share. This strategy aims at improving product features, attracting the potential customers, and delivering better customer service, etc.
Creating a solution through the formation of innovation strategy can fulfill the unmet needs of the various demographic segments. To know these needs market research should be done. Knowing the right needs of the customers can act as a better support to formulate better innovative strategies.
Types of Innovation
Depending on the nature of the product or service usage of technology or equipment and methods of creative value to the customer service or production process innovation is divided into three types.
Product innovation involves bringing new and unique products or bringing new life to existed designs, product innovation is of two types.
Radical innovation involves the development of completely new products or services to fulfill the unmet needs of the customers. Through radical innovation unique, more attractive and superior products or services can be delivered to satisfy the customers and it facilitates to occupy the major market share.
Incremental innovation includes a change in the existed designs or improving the established process and services to enhance the features and quality or the product or services.
In process innovation, the final product is not tangible, but it is the method of bringing out the better results by using new technology and equipment etc. This is beneficial for both internal and external customers, here organization itself and employees becomes the internal customers, and consumers become the external customers. Process innovation helps in reducing the costs and time taken to complete the process, maximizing profits, productivity, values. It makes an organization more competitive and fulfills the needs of the customers.
Strategy innovation challenges the existed business models, methods of creating value to the consumers, service or production process through bringing changes or innovating new business models and production process. Strategy innovation is four types on the basis of imitation, markets, technology and the combination of market and technology.
In imitation strategy innovation, the companies mimic the existed value propositions and business models.
Strategy innovation on the basis of markets involves introducing new and unique products or services to the market or diversifying into various market segments to create demand for the products and services.
Strategy innovation on the basis of technology involves using revolutionary production process and technology to satisfy the internal and external customers.
Various levels of innovation strategy
Levels of innovation depend on the extent of contribution given to the success of product development such as techniques, tools, methods, and strategies. The three levels of innovation strategies are discussed below.
Incremental innovation includes bringing small, new and unique improvements in the products, process and business models such as cost reduction, process and business models such as cost reduction, various sizes of packing, improvements in packing various flavors and usage of better ingredients etc.,
It helps in attracting the consumer’s attention through visual communication and improves sales and profits.
This is also bringing change in a business process and methods; however, the change can act as a competitive advantage by giving results beyond new. Breakthrough innovation is a slow process and it needs more capital investment. It makes the business people dreams come true by keeping the organization at next level in innovation.
Usually, startup companies introduce this transformational innovation which can bring a drastic change in the existed business. The introduction of new technology brings changes in the way of work and living by eliminating the existed technology and industries. Here a complete transformation occurs due to the new technology and industries.
Benefits of Innovation
Benefits of innovation include the following
- Job satisfaction to the Employees
- Fulfills unmet needs of the consumers
- Facilitates competitive advantage
- Cost reduction
- The increase in productivity and profits
- Maximize market share
- Increases brand image
- Facilitate product differentiation and diversification