Innovating In A “Flatline” Market
By Doug Burson and Paula Aaron Rose, Sphere Marketer & Analytics
Most companies have ambitious growth goals. The trouble is there are only so many sources of market growth. Markets in many countries and industries are flat and increasingly commoditized; achieving growth in market share is expensive; and acquisitions often do not work.
For most companies, product development means line extensions, improvements and product modifications and only serves to maintain market share.
Markets aren’t growing, so firms increasingly compete for a piece of a shrinking pie by introducing one insignificant new product after another.
The launch of a truly differentiated new product in mature markets is rare these days.
The answer is true innovation – breakthrough products, services and solutions – that create new-market options in older, flat markets.
This means larger-scope and more systems-oriented solutions and service packages. Examples such as Apple’s iPod, are often cited.
What Apple did succeed in was to identify an attractive strategic arena (MP3s) where it could leverage it strengths to its advantage and the result – an easy-to-use, easy-to-download MP3 system, which also happened to be “cool.”
There are dozens of other similar examples of true innovation where companies created “big concepts” and bold innovations, typically an integrated system or total solution package for the customer, and won:
P&G’s Olay skin-care business
Once almost given up on by P&G, the business was rejuvenated based on the “one big concept” – preventing the signs of aging on women’s faces. The company searched for and found the needed technology (outside of P&G) and relaunched the business with multiple new products.
Barnes & Noble, U.S. Bookseller
Barnes & Noble, the huge U.S book retailer, operates hundreds of bookstores across America.
Facing new on-line competition, the company has boldly launched a reading system called Nook. One can download books from B&N’s huge library and do so wirelessly (anywhere in the U.S. and Canada, on the fly, direct to the tablet, and with no need for a computer).
There is a pattern here: this is the type of innovation that you need – and this is what will generate the growth desired by so many firms – larger and more systems-oriented solutions and product/service packages.
Benchmarking studies of hundreds of firms reveal five vectors must be in place to undertake this type of innovation to yield bolder and imaginative projects that create integrated, larger and more systems-oriented solutions and product-service packages.
Most businesses focus their efforts in the wrong areas – on flat markets, mature technologies and tired product categories. Break out of this box towards more promising strategic arenas with extreme opportunities.
Build a solid business case and pick the winners
Most innovation teams we see don’t get the facts and build weak business cases; the result is that many worthwhile innovations don’t get the support they need to be commercialized. It’s essential to do the front-end homework and build a compelling business that become “different” than your same ol’ predictable market and buyers.
Now might be a good time to critically assess whether your company is ready for the challenge.
Crafting a balanced Idea-to-Launch Process Solution of expertise, advice, facilitation and best practices that fits your company’s situation, sense of urgency, and budget.
It’s something your company absolutely can do!