As the world is growing at an immense pace, parallelly, the competition over the market is getting tougher. A company that rules the market with its best quality products and services can’t be the king of the market and can’t sit on that pedestal for long. Its usual that new players will enter the market with improvements and replacements and push that company’s off that pedestal and sometimes sinking it to irrelevancy.
Your business needs to be innovative and stay updated with market needs. Lack of innovative initiatives hardens the business to sustain itself in the market. Most of the businesses found It hard to sustain their performance, such as Polaroid, Sun, Yahoo, Microsystems. The failure of a business is rooted with a lack of innovation improvement effort. For a long competitive run, the business needs to develop effective innovation strategies.
What are Innovative Strategies?
Despite of heavy investment of time and money, still, many businesses find it to be frustrating developing an innovation strategy. An innovation strategy designs business strategic innovation fields. In innovation strategies, goals and measures are defined, which directs the company in developing innovative products, new business areas, and optimal processes. Necessary steps for achieving targets are also highlighted in the concept.
A strategy is nothing but making choices amongst number of feasible options to have the best chance at winning, and innovation is just a creative means to achieve your strategic goals. According to recent analytics, it’s evaluated that 96% of professionals have defined innovation as a strategic priority.
Innovation and strategy, when separated, has a broad meaning. INNOVATION is about developing new value which people is ready to use and pay for, whereas strategy is a tactic or plan to achieve any goal or target. Innovation strategy isn’t just setting up ideas. It’s more about redesigning the organization’s mission, vision, and values for a specific customer market. In simple words, Innovation Strategy can be defined as an explicit roadmap for the desired future.
Without any innovation strategies, improvement efforts can go in vain. Adopting such practices requires a host of complementary changes to the rest of the organization’s innovation system. A company without effective innovation strategies won’t be able to make decisions or opt for the elements for innovative systems.
Types of Innovation Strategies
An innovation strategy is just a plan to grow a market and profit share through product and service innovation. Innovation strategies can be classified as proactive, active, reactive, and passive.
- Proactive: Companies with proactive, innovative strategies tend to have a strong market orientation. They acquire knowledge from a wide range of sources and take high risks.
- Active: An active innovation strategy defends existing technologies and markets while being prepared to quickly once market and technologies are proven.
- Reactive: The reactive innovation strategy copies proven innovation and uses entirely incremental innovators. Mostly used by companies which
- Are followers
- Follows wait and see approach
- Take low-risk opportunities
- Passive: Companies with a passive innovation strategy waits for its customer review or demand for a change in their product or service.
How to develop innovation strategies?
For developing innovation strategies company needs to answer key strategic questions, analyse future trends, competitors, watch out customers’ needs, and list out competencies that need to be developed.
Which future trends are important?
Future trends can adversely impact the development of innovation strategy. Analysing the trends, evaluating its effect on one’s own business are crucial for developing an innovation strategy. The following can be a great s
ource for trends.
- Regular article published by trend research institutes and futurologists
- Visiting seminars or discussions on online forums
- Observing start-ups operating in your industry.
Which business competencies will lead to a competitive advantage in the future?
Analyzing business competencies acknowledges the business about the achievements it could attain based on the existing knowledge in various areas. It’s an important aspect as your business competencies will be key to your successful innovation.
What hidden customer needs are the base for the development of innovation strategy?
A successful innovation strategy is that which identifies hidden customer needs and develops offering to meet those needs. Innovation is often based on the hidden needs that are yet unknown by the customers itself.
Following Tips to be Followed for Developing Successful Innovation Strategy
- Include employees at various levels: They all shape the process of building an innovation strategy.
- Include Cross-Departmental members in a team: Add members from all departments of the team, so you could get viewpoints from several angles.
- Motivate: Always motivate your team, an enthusiast team with a positive attitude, and a clear mindset actively works on the implementation of a new innovation strategy.
Guidelines for Developing Innovation Strategy
There are several types of innovation strategies. But the type of innovation is determined by the innovation strategy. The factors which influence your strategies are the position where your company has reached, where it’s heading, what’s the desired outcome of the innovation. Your strategies highlight what you want to gain from the innovation process.
- Developing a New Product: A new product can be developed after seeing an opportunity for a radical change in the type of product offered.
- Protect Market Share: It’s a dynamic world; you need to be highly innovative in many instances, just to maintain your market share.
- Expand Market Share: Innovation strategies often lead to a new market. For example: introduce a new product in the same market or else offer existing products in a new market.
- Sell or License to another Organization: As the innovation is developed, you might be looking to exit the strategy. So you can sell or license to an organization.
- Improve Operational Efficiency: You can reduce the cost through streamlining your operations.
- Increase Market Recognition: You can increase your profile in the marketplace through innovative market strategies.
Once you have determined the intended outcome and how it fits in your organization. Think about the best innovative strategies that work best with your organization.