Vision-IT: Strategy Consultant and Mentor 
Targeting Innovation and NPD Where It Matters

(c) 2003 James Leo, Vision IT Management pty ltd. All rights reserved

Right Place, Right Positioning, Right Timing

We believe the ultimate purpose of any commercial organisation in embarking on the innovation journey  is to seek profit through new product development (NPD) or improving existing products and services. In addition to the importance of timing in 'when' to embark on creating new product/service for a given technology adoption lifecycle process, the target position of where this innovation aims to satisfy represents another critical success factor. We argue the need to target innovation effort and NPD activities on where it matters most in the business value chain or business network environment. This is because there is a right place, right positioning and right timing where the investment in innovation in product/service will return the most benefits. 

Targeting Innovation Where It Matters - A Macro View At Large

The introduction of major legislation, competitors or technology change always encompasses by a shift in the existing business/industrial competitive landscape. There are several approaches that we can use to develop the strategy at a macro level to target innovation where it matters in order for the business/organisation to gain competitive advantage. 

A well-known approach is the use of Porter's 'five forces' analysis on the industry marketplace. This analysis can provide valuable information on the degree of rivalry, new competitive pressure, technology change, and its progression on the stages of the Technology Adoption Lifecycle within the context of users and suppliers power. This is because the five forces determines an industry profitability as they influence the prices, costs, and required investment of business/organisations in the industry. These are elements that determine the return on investment and the strength of the five competitive forces represent a function of an industry structure. Therefore the result of 'five forces' and their subsequent impact on business value chain can provide valuable insights on the critical forces, threats, innovation issues, and managerial concerns that drive the business/organisation on its innovation quest. A graphical example of a 'five forces' strategic analysis view we conducted for a leading organisation is shown below:

The Business Value-Chain innovation analysis is based on the conceptual framework that the power to capture attractive profits will shift in the value chain to those activities where the immediate customer is not yet satisfied with the functionality of available products. It is in these stages where the complex, interdependent of components and integration occurs. These are activities that create steeper economies of scales and greater opportunities for differentiation. Therefore this strategy seeks to locate stage of the business value chain where business/organisation can innovate profitable products and services.

Targeting Innovation Where Unfulfilled Needs Exist- A Micro View

There are a few major conceptual frameworks and approaches to innovation strategy that operate at an enterprise level. The following are a brief summary of two approaches.

#1 Business Architecture

At the business architecture and firm enterprise level, there are location issues and planning consideration needed in developing enterprise wide solution to business problems. Investigation of these issues may provide opportunity in creating innovative product/service that improve business results. In addition to this, the concept and process identified in the following figure can assist in verifying that the business solution or the new product/service can deliver values to location where it matters most.

Please consider that the business and enterprise architecture as illustrated in our "Who, What, When, Where, Why and How" framework and its associated process can help to shape the strategy and development roadmap needed to introduce innovative product/service and new technology.

#2 Resource-Based Approach to Gain Competitive Advantage Through Innovation

The resource-based approach seeks to create rare and valuable resources at specific stage of the business value chain and the organisation environment. The creation of these valuable resources that are difficult to imitate or substitute due to the existence of isolating mechanisms will then give an organisation its sustainable competitive advantage. The isolating mechanisms can be specific organisation structure, business practices, and intellectual property rights, organisational culture, team-based skills or the ability to perform specific 'hard to manage' tasks. Thus the critical success factors included the ability to determine what and where these resources are and ways to fortify the isolating mechanisms.

Our approach is to develop this ability to create innovation by a better management of an organisation know-how and its process for creating innovation and sustain their competitive advantage. This is achieved through the use of a Knowledge Management Architecture framework and tools that can assist organisations in improving their capability and process to determine the 'what, when and where' innovation is required and how to maintain that leading edge in competitiveness.

Pleasefor an obligation free discussion to find out how we can assist you to develop an effective innovation strategy and NPD plan.

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