Three Types of Innovations that Companies Should Pursue to Survive
By: Efe Yavuzer
Tags: Business Model Innovation, Product Development, Business, Process, Innovation

Three Types of Innovations that Companies Should Pursue to Survive

Actions that should be taken without crises knocking on the door.

Taken from freepik.com

2020 remains a difficult year for all of us. Australia’s fire, COVID-19 and Black Lives Matters movements… Assuming that we have finished September, it is still a three-month process to complete this year.

The habits we are used to having changed rapidly on these days, companies are going through change processes that they may never think of. Most companies have completed this change process, but some continue to experience the difficulties of these unordinary times.

Companies always spend a lot of effort to differentiating from the others while we do not even know what will meet us in the last quarter. Surprisingly, they usually take similar actions and expect different results.

One of the main ways to differentiate is to have an innovative perspective. However, even they put their effort into the innovation process, it’s still uncertain when we look at the return of the investments.

While there are many different innovation steps that companies can follow to capture change, we can list the three most common types of innovation in different sectors as follows.

Product Innovation

Of course, the first type of innovation that comes to our mind has to be the innovations made based on the product, because the most striking type of innovation of the companies is the product innovations.

Companies pay a lot of research and investment in their product developments. This is what they should do always because the needs and requests of end-users are also changing based on the current time dynamics. It has only one thing to do to understand the dynamics of today.

Listening to the consumer!

Innovation should first be done on the company’s mindsets. The only focus of product developments to be made without understanding the pain points and needs of the end-user will be to save more and generate more revenue.

As it is used in 90% of today’s academic theses, Apple can again set a good example for us. As we all know, over time, Apple managed to take the phone market from Nokia but wait, you know what the former Nokia CEO said sadly when he lost this war?

Taken from Murray Patt’s article.

So, didn’t Nokia have the technical infrastructure and experience to produce a keyless touch phone? Of course, it did. What they did not have was that they did not dare to innovate on their mindsets rather than the hardware and that they could not anticipate the users’ reactions to this innovation.

Product innovation describes innovation as defining the production of a new product and enhancing the efficiency or characteristics of an existing product.

Process Innovation

Let’s face it, finding a new product is not always as easy as it is written here. Even Apple only launch new phones once a year.

On the other hand, even if you think that you have made a great innovation and that it will be a disruptive innovation, unfortunately, it is not that easy to bring this product to the forefront as a company in today’s market conditions and get market while big players fight in the square.

It is necessary to focus on the different actions that need to be taken to stand out during these periods.

Process innovation is the introduction of new or enhanced manufacturing and distribution methods to raise the production rates of an organization and reducing costs.

Taken from freepik.com

Netflix is one of the great examples of Process Innovation. They changed their all renting movie process. They stopped offering physical products. In this new business model end, the user pays at once and use Netflix as an open-source movie library.

It happens also in the software sector. Microsoft, Autodesk, and Adobe and many have stopped selling physical products. Now, these companies delivering their products via email.

Also, From another perspective, Companies are offered a new way of customer experience. End users are now able to reach what they paid in anywhere.

As expected, they were able to increase their profits by going into innovation in their active processes while still selling the same products with their new value-added ways.

Process innovation supports a highly profitable business model for both the producer and the consumer.

Business Model Innovation

Photo by Oimhedi

These winds of change that we are in naturally drag the business world after it. It’s not so common for every business to create a new product to disrupt competitors. Organizations should balance and decide true investment channels based on the necessity of the current needs of end-users.

Organizations should find true timing for this innovative transformation that best fits the character of their organization.

Companies must aware of who are the consumers and which values they are delivering. Innovations should be fit their market segment best. Unless they know their consumers, organizations can face the risk of losing control of what they are selling and how it is selling. The following questions should be answered clearly

How the revenue is generating? Which pricing and selling model they are using? Is it okay to change this model? How they are delivering their values to end user? Which channel they are using? Which of them they should change with business model innovation?

Business model transition is commonly understood as a recession time solution to increase stable businesses. This innovation actions for business model innovation must implement in true time to improve going well process as it may implement in economic turmoil to ride out the storm.

Choosing the type of innovation which best fits for the business plan of organizations is the topic that organizations should consider carefully based on their current economic environment.