Essay on Types of Innovation Strategies

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Innovation Strategies
In the 21st century, with the advancement of technology and development of globalization, there are a large number of companies that are entering the markets across the globe. There is a tremendous increase in the demands of the people and customer satisfaction has become a very complex process. There are many elements that would help a company to survive through the competitive world and emerge as a leader. Innovation strategy is one of them. Innovation strategy involves developing a new plan and strategy for incorporating an increase in the market share, brand value, and increase the percentage of growth in an organization. It refers to developing products, services and increase in profitability through identifying the critical factors and implying them to develop a solution that has hardly been obtained and tested before. While developing an innovation strategy there are various strategies that are developed and evaluated for obtaining the most appropriate and ideal innovation strategy. These innovation requires a large number of strategies to be developed and they are:
Offensive Strategy (Leader):
In this type of strategy, the companies would aim at outperforming their rivals by developing new technologies, products or services that have not been developed by any of their rival companies. It helps the company to be become a leader in the market in terms of innovation and the company would be enjoying the credit of discovering or developing an altogether new product, technology or service. The company that has adopted offensive style of leadership strategy can also patent their work as they are the sole founders of it.
There are various steps and methodologies that can be implemented for developing effective offensive innovative strategies in the business. Developing an offensive strategy involves the following things:

Example of offensive strategy:
Ford was the pioneer in the mass scale production of cars. Adapting offensive strategy, they sold above 900,000 cars in 1921. It occupied the most significant share in the market which was about 60%. It was through a very strong R&D that they were able to accomplish the offensive strategy and become a leading company in the market.
Defensive Strategy (Fast follower):
Defensive strategy refers to the strategy where the company has the innovation, but it does not want to be the first one introducing and implementing it. They are safe players and hence they launch their strategies after some other company launches a similar strategy about their product or services in the market. They develop and implement the changes and other innovations that are adapted by their competitors in the market. It requires a considerable amount of R&D too. The companies that adopt this kind of strategy in its innovation are very fast and prompt followers.
It is divided into two categories as shown below:

Example of Defensive strategy:
General Motors followed the trend set by Ford and started after Fords following the footsteps of Ford. In 1921, they sold about 61000 cars that accounted to merely 6% of the total market share, whereas Ford had 61% share in the market. But, General Motors adapted a very innovative production line that was diversified and differentiated from others. Due to it, in 1931, it accounted for 31% of the market share leaving the trend setter Ford to 28% share in the market.
Imitative strategy (Cost minimization):
In the imitative innovative strategy, the basic purpose or aim behind the development of the product is to minimize its cost and provide all the features that are provided by the competitors, but at a considerably higher price. A company adapts this strategy when it does want to develop a good share in the market after a certain period of time. It helps in saving time as well cost of R&D that would otherwise be required to be carried in the production process if it did not imitate the market leaders.
Example of Imitative strategy:
New technologies in the android mobile phones are developed by market leaders like Samsung, Nokia and Sony. However, the companies like Micromax try to imitate their products and develop similar products, but at a considerably lower price that would attract more and more cost effective customers to it from all over the globe. Thus, it can be stated that Micromax develops its product through an imitative style of innovative strategy and help in delivering good quality phones at an affordable and low price with features similar to the market leaders and trend setters Samsung and Nokia.
Traditional strategy (Market Segmentation specialist):
Traditional strategy serves to be the oldest style of developing innovative strategies in the market. In the traditional strategy of innovation, the companies would not adapt to the changes that are taking place in the market and they would stick to its specialization or customization. These strategies were adopted on a large scale by companies which were related to the arts, crafts and architecture industry and had a certain kind of monopoly in the market that hardly consisted of any competitor. The companies that adapt traditional innovative strategies are very much capable of changing and improving their design, but they do not accustom to the technical changes that take place in the market. It is a very old concept of innovation and is not practiced today because today’s market is conducive to change and it is an inevitable part of the market. Hence, the company that would not inculcate these changes within their products have no scope of sustaining in the market. They are very good at market segmentation.
Example of Traditional strategy:
Firestone, a tire company occupied a significant position in the U.S. market in 1970. They had a traditional approach of considering their specialization and providing the customers according to that. But, this kind of strategy failed when one of its competitor Michelin introduced radial tires in the automobile industry. This struck Firestone and they were unable to any such changes in their technology and quality. As a result, it started losing its market and Michelin became the new market leader.
Due to this, traditional innovative strategy is not being adapted anymore by the companies who want to be a market leader and develop a niche for itself in the global market.
Creative thinking techniques
Creative thinking techniques help the companies to develop high level of innovation in their products and services. It would provide the company with a firsthand advantage of being a market leader through development of new and innovative strategies through creative thinking. One of the most widely adapted creative thinking technique is the six thinking hats technique. It has been discussed below:
• Six thinking hats is a system or a concept that has been developed by Edward de Bono for deriving the basic elements that are to be considered while developing a creative thinking technique and applying it through an organization. It helps an organization to consider all the available options through a systematic approach that would ensure that all the resources are considered for the development of the product or a service in the organization.
• Six thinking hats that represent different dimensions as shown below:

Skills

Posted on

March 9, 2018

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