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TECH TALK: Technology Themes: Theme 3: Innovation

March 8th, 2001 · No Comments

With common technology platforms being adopted by many companies, it becomes even more important to be different and unique in strategy. Companies need to consider how technology can be used to differentiate their product and thus give them a competitive advantage in the marketplace. Technological advantage has a limited time advantage; what is lasting is building in innovation into internal processes.

Consider computers as an example. Many of the vendors have the same components which are being used, in some cases, even the same companies are doing the manufacturing for them. But, Dell has so far stood out for its innovativeness in how it has sold to the end customers and matched that with efficient supply chain management. Even in mobile phones, one finds that the best user interface and ease of use is offered by Nokia, which has built up a near-impregnable leadership position.

A view from Gary Hamel writing in Fortune:

E-business transformation may drive corporate strategies to be more alike than dissimilar. Strategy convergence is hell on margins… The collective delusion of [companies] is that productivity gains translate into plumper profits. Any company that plans to make money from “e” must have a Web strategy that creates unique value for customers, confers unique advantages in delivering that value, and is tough to copy. Of the many things that haven’t changed in the new economy, here’s one more: Sameness still sucks.

One approach to looking at innovation is to consider new marketspaces. Write W Chan Kim and Renee Mauborgne in Harvard Business Review:

Creating new market space requires a different pattern of strategic thinking. Instead of looking within the accepted boundaries that define how we compete, managers can look systematically across them. By doing so, they can find unoccupied territory that represents a real breakthrough in value. Companies can pursue value innovation by looking across conventionally defined boundaries of competition – across substitute industries, across strategic groups, across buyer groups, across complementary product and service offerings, across the functional-emotional orientation of an industry, and even across time.

Another approach is to consider mixing two ideas. Smart phones (even though they have yet to take off) combine PDAs and cellphones. An example of an innovative product which has combined wireless and email is Research In Motion’s Blackberry – it does just one thing (offer access to corporate mailboxes for people on the move) and does it really well.

Innovation is there all around us – be it in product, marketing or service. One thing is clear: to succeed in tomorrow’s world, companies will need to be ever more innovative with product and service offerings which differentiate and stand out from the competition. The one key cornerstone of this innovation will need to be the Internet. Any innovative offering will need to think about how the Net can be at its core.

Tags: Tech Talk

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