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Three innovation strategies



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  • 1. Three Innovation Strategies Technology Driver, Need Seeker, Market Reader
  • 2. Innovation Strategies
    • BCG has stipulated that firms follow at least one of three innovation strategies:
      • Need Seeker
      • Market Reader
      • Technology Driver
    • Selecting the appropriate strategy or strategies and implementing them appropriately can greatly impact the success of innovation in your business
  • 3. Three Focus Strategies Technology Driver Need Seeker Market Reader Increasing Customer Focus Increasing Technology Focus Increasing Market Focus
  • 4. Technology Driver
    • Based on the concept that the firm can create interesting, relevant technologies that solve customer needs
      • Firms that pursue this strategy must also be the technology leader in their field
      • “ Inside-out” innovation. Company creates innovations that find or create markets
      • Driven by technology, not needs
      • Limited breadth of innovations. Typically limited to new products. Few services, business models or experiences
      • R&D focused. Typically much of this innovation happens in the lab. Less innovation outside of R&D.
  • 5. Need Seekers
    • Strategy to seek out customers and understand unmet or unarticulated needs. Deliver products and services that meet those needs.
      • Company needs to have an active engagement with customers or consumers
      • “ Outside-in” innovation. Discovering needs in the customer and prospect base
      • Identifying needs, then linking to capabilities
      • Great breadth in innovation outcomes – products, services, business models, experiences
      • Innovation is driven from marketing and product/service development
  • 6. Market Readers
    • Strategy is to evaluate current competitive landscape and forecast trends to spot emerging opportunities or threats
      • Company has an active forecasting, trend spotting and competitive intelligence program
      • “ Outside-in” innovation. Rather than discovering needs, discovering opportunities
      • Once opportunities are identified, generate ideas to address them
      • Great breadth in innovation outcomes – products, services, business models, experiences
      • Innovation is driven from strategic teams at enterprise and business line or product teams
  • 7. Risks
    • Technology Drivers
      • Solve a problem for early adopters but miss the late adopters and majority
      • Assume all innovation is based on technology
      • Miss signals from the market or based on customer needs
      • Innovation output is only physical products
    • Need Seekers
      • Place too much emphasis on a subset of customers
      • Misread the needs of the marketplace
      • Solve short term needs but miss longer term needs
    • Market Readers
      • Chase interesting but irrelevant trends
      • Build scenarios aligned to current strategies
      • Identify needs but can’t react in time to benefit
  • 8. Conclusion
    • Using any one of these strategies in isolation is dangerous
      • Each perspective is too narrow
      • Either ignores the internal capabilities or the external demands and changing markets
    • Should use one dominant and at least one subordinate strategy
  • 9. Recommendation
    • Start with Market Reading
      • Identify longer term trends and emerging opportunities
    • Next, apply Need Seeking
      • Within the scenarios identify customer wants and needs
    • Then apply Technology Development
      • What capabilities or technologies can we bring to bear on those needs within the scenario