Increasing use of innovation for competitive advantage
Description
Companies are increasingly using innovation as a means to secure competitive advantage. In the battle to become more competitive, companies are moving the innovation space towards the core of their corporate strategy.
In the search for lean and competitive operations, gains realised from cost cutting efforts and outsourcing have to a large extent been exhausted, particularly in the US, and so companies are searching for new innovative ways to grow and differentiate. Innovation for competitive advantage means more than creating just new products: it is also reinventing business processes and building entirely new markets that meet untapped customer needs.
Enablers:
Increasingly Competitive environment: An increased rate of change of competition, particularly with evolving capabilities in emerging markets, but also from exponential growth in functionality in particular industries (see ICT below).
Exponential Digital age: With rapidly accelerating digital infrastructure and easier and cheaper access to information, people increasingly want more. In this highly competitive and demanding world, competitive advantage is gleaned more and more through innovation.
Improving Service orientated architectures: as a subset of the digital age, increasing innovations in web services enable a new corporate strategy to be enacted, such that competitive edge can be gained from IT.
Globalisation: Increasing intense global competition forces firms to constantly review their strategy and look for new and innovative ways to remain competitive or gain competitive advantage.
Increasing Climate Change pressures: in the corporate world threatened by climate change and in the new business space created by climate change hype, competitive advantage is being captured or retained by a plethora of innovative forays.
Business model innovation: a subset and enabler of innovation for competitive advantage, has been quoted as being not a static process but as a systemic, repeatable, and reliable capability, one that leaders need to build, strengthen, and eventually turn into sustainable competitive advantage.
Inhibitors:
Lengthy Product development life cycle: Within many companies and industries, this development time of new products is too long or cumbersome to innovate at a rate suitable to sustain competitive advantage.
Embedded Company Cultures: Entrenched business processes and immovable employee psyche are the ultimate hindrance to innovation in the name of competitive advantage. The use of innovation as a competitive advantage is realised when organisation culture is unified and resolute in creating, developing and implementing new and innovative means and ways to advance capability, process, products and services.
Disruptive Innovation: Established companies in the process of seeking innovation for competitive advantage are often blindsided or subject to attack by disruptive innovation elsewhere.
Paradigms:
Previous techno-economic paradigms tend to emerge and stabilize, as demonstrated for example with the development of cars and rail technologies; the result has tended to be more of the same, with scalable efficiencies and quality improvements as being thought of as the source of competitive advantage.
The paradigm shift of today involves a flatter more competitive world, where exponentially advancing digital infrastructure in a climate change threatened and research constrained world give rise to innovation centralised strategies in the search for competitive advantage.
Experts:
Jeffery Phillips, http://innovateonpurpose.blogspot.com/
John Seely Brown, http://www.johnseelybrown.com/
Clayton M. Christensen http://www.claytonchristensen.com/
Michael E. Raynor http://www.theinnovatorssolution.com/authors.html
Mark W. Johnson http://www.seizingthewhitespace.com/blog
Timing:
Particularly in the last decade, competitive advantage is increasingly being derived by innovation, and coincides with the intense evolution of many of the enabling factors listed above.
Web Resources:
http://www.thetimes100.co.uk/case-study--using-innovation-to-create-competitive-advantage--85-331-5.php
http://www.deloitte.com/view/en_GX/global/industries/manufacturing/manufacturing-issues/creating-competitive-advantage-through-innovation/
http://innovateonpurpose.blogspot.com/2009/10/innovation-as-competitive-advantage.html
http://ideas.repec.org/p/pra/mprapa/23770.html
http://www.theinnovatorssolution.com/book.html
http://www.seizingthewhitespace.com/
Driving Forces - Reference Page
Future of Innovation Main Page