Provide an example on how the role of innovation can affect market differentiati

Question

Provide an example on how the role of innovation can affect market differentiation? What is the commercialization processes for complex innovation?

Original discussion thread post due by *Thursday at 11:55PM (EST)*.

This original post must contain a minimum of 300 words. Students must demonstrate critical thinking by paraphrasing the material into their own words (direct quotes should be used in a limited manner as this does not display critical thinking). All statements in the post that are not general knowledge should be cited to their source. Be sure to clearly relate the readings to the lesson concepts. Students may further synthesize this research relating to personal experiences. All citations should be in APA format with a reference listing at the bottom of the post in APA format (be sure to include a link to the website of your current event in the reference listing).

Explanation / Answer

The innovation process plays a great role in differentiation. Market differentiation is required because every organization needs to stand out from the crowd. They have to make a unique contact with their customers and must stand for something in their mind to get the real benefit of differentiation. Michael Porter has delivered his thoughts on differentation as : "1) Differentiate Yourself 2) Deliver immense value 3) Be consistent.

Innovation provides huge differentiation from the competition if it is able to help company stand out from others, deliver immense value to customers and it is able to deliver the same or better experience consistently to its customers.

The innovation can be in any form whether it is the product, cost, marketing and communication, packaging or manufacturing techniques. Whatever the form is, the real impact of innovation comes from what impact it creates in the mind of customer. If there is a cost innovation, customers will get a higher value, that means higher benefit at lower cost , which cannot be matched by competition in a sustainable manner. In case of product innovation, customers get highly differentiated features in product that provide immense value to their lives.

For example, Amazon came up with unique "One Click" system that propels user for highly convenient transactions on their ecommerce platform when most of the users are wary about buying online or find buying online cumbersome. This system not only differentiated Amazon from other ecommerce players, infact it made them differentiated from big retailers like Walmart etc. South West Airlines came up with multiple innovations in their operations, marketing programs and organizational structure that propelled their growth. For example, they have been able to record the lowest turn around time for a flight, they had done hedging on fuel to save fuel costs, non stop flights, low fare sales and new destinations from time to time. When no touch phone in market was doing well, Apple came up with iPhone that revolutionized the smartphone technology marking the shift of customers from the old keypad phones to smartphones.

Process of commercializing innovation

The process must start from the inception stage itself and should be the root of innovation. Innovation should be driven by organization's strategic objective for the customers, that means it must come from "Why", their reason of existence. The company should assess why they must exist in the market place, and that "Why" should become the starting point of innovation. Amazon's reason of existence was to give the most convenient online shopping experience and that objective drove them to work towards innovation like One Click system.

Second, while inception, the innovation must be analyzed from differentiation perspective. The organization must assess how the innovation is going to provide them differentiation in the long term and if that can happen, it helps al lot in the commercialization process.

Third, the innovation must be relevant for the customers and is solving their need or their problem. Only if it is relevant for them, customers would adopt them.

Fourth, because innovation comes at a cost, the organization must think how to deliver the innovation at the lowest possible cost to the customer. The innovation must be backed by giving scale to it and not making it limited to a small volume. This is because the scale would help to lower down the fixed costs per unit and help to deliver the product at lower cost to customer, thereby increasing the value to customer and organization.

Fifth, the time to market must be right. An early innovation doesn't help because the supporting ecosystem is not ready to adopt it.

Sixth, there has to be its seamless integration and collaboration in the value chain. For example, when Apple released iPhone, they developed App Store to ensure that customers are able to use apps to enable them to get the maximum out from the phone.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.