Why Innovation Is Essential Even After Innovating a Successful Product/Service

What happens when your business or any other business launches a successful Product/Service ? Yeah I know you make good money, great fortune, big brand name, but that’s not what I am talking about!
   

Well along with those things there are other three things that comes with success of any product/service. Those three things are as follow.

1.      High demand
2.      High proliferation
3.      High imitation/Innovative variation (HI/IV)

Now let me put this another way, which would not only explain these three outcomes that result from success of any product/service but also how do they relate to innovation and along with that it will also answer questions like why do you need to innovate constantly and when do you need to innovate. 

And again along with that you will also gain a new and far more reasonable understanding of product/service (life cycle) growth, maturity, decline from new a angle, in a new exciting way, which will hopefully make a lot more sense than the present one.

Okay let's get to it (read carefully and yeah sometime you need to read whole of the article to make sense out of it, this one is one of those types of articles and you won't regret it!).

The Boom Cycle

The boom cycle has two phases.

1.      Alternative Boom X1 (ABX1)
2.      Alternative Boom X2 (ABX2)

First of all, What is this Boom Cycle ?, well as the word “Boom” meaning suggest growth, progress, flourish rapidly etc. Exactly in that sense the boom cycle represents a successful product/service which results in a business progress, growth like in terms of its market share, its brand awareness, its profits, brand value, sales so on and so forth and this goes on and on, how come? ! Well bear with me ;p and read further, let’s start with the phases first!

Okay, Tell Me About the Phases

In both of the ABX phases, the X represents a successful product/service while the 1,2,3... after X represents the better alternatives of that product/service (like X2 is better alternative of product/service X1). And AB stands for Alternative Boom or in other words success/boom of a specific product/service by becoming better alternative (ABX2) to the already available product/service (ABX1) in the market.

In a nutshell ABX2 represents a better alternative product/service to the product/service that was represented by ABX1, where ABX1 represents better alternative to "before ABX1" in other words its a continuous cycle of better alternatives.

And the two ABX1, ABX2 represent the two usual phases (from alternative to better alternative) of this cycle that are repeated constantly in terms of any successful product/service. Now before explaining that (how does that repetition occurs) I want you to understand another aspect of these two phases, that is that both of these phases are exactly the same in terms of what happens in them, that is:

1.      High Demand
2.      High Proliferation
3.      High Imitation/Innovative Variation (HI/IV)

Okay now let’s understand how this cycle repeats itself, what does high demand result in, what does high proliferation means, what is high imitation/innovative variation and how does all of this make innovation essential for any business.

Let’s start with the first phase or ABX1

  

Alternative Boom X1 or ABX1

“Alternative boom X1 or ABX1” represents the first successful product/service of any business that along with all other benefits that I mentioned in the beginning of this article, results in the following three outcomes.

1.      High Demand
2.      High Proliferation
3.      High Imitation/Innovative Variation (HI/IV)

High Demand

When a product/service is a success it means people or target market likes it, buys it over and over, pay for it, wants it, love it and all of that results in high demand, which in turn results in increase in sales, increase in profits, increase in brand worth so on and so forth.

High Proliferation

The high demand also spread the news or send signals to the would be entrepreneurs/investors, businesses about the success of the product/service, what follows is a high proliferation of these investors, entrepreneurs, businesses resulting in a situation similar to a “Gold rush” where everyone rush for gold which in this case is “healthy high demand”.

High Imitation/Innovative Variation

Now in order to get attention of the high demand or in other words to cash that high demand these entrepreneurs, investors, businesses start imitating and innovating to get the target market attention.

HI/IV
HI: When a product/service is completely or exactly imitated
IV: When a product/service is altered, changed in innovative way, making innovative variations to it.

The degree of HI/IV depends entirely on business, like if the business has the capability to imitate,  it is more likely that it will go for HI but if it has the capability, resources to innovate then it is more likely to go for HIV.

Though complete or high imitation is discouraged as it results in legal complications, lawsuits etc but again businesses do it, most commonly in third world countries as there they can get away with anything.

This HI/IV increases with time as the new investors, entrepreneurs, businesses compete for the market share and that results in gradual movement (for product/service) from growth to maturity and subsequently decline in a given market for initial value makers (those who launched successful product/service) or in other words those (businesses) who doesn’t/didn’t go for HI/IV.

Now businesses that commit to HI/IV constantly not only gain market share, profits, sales but it also results in a competitive advantage, as constant commitment to HI/IV results in a routine and doing a task or group of tasks, activities routinely or on daily basis results in achieving effectiveness and efficiency in those tasks, routines which leads to competitiveness (competitive advantage) (1).

In our case such routine would make a business more innovative, its human resource more experienced, effective, efficient in delivering effective and efficient innovation that would not only result in market expansion and retention but also in cutting costs, eliminating resources wastage so on and so forth.

And all of this means ABX2 or in other words better alternative (successful) product/service.

The same cycle repeats itself for the ABX2 (second phase) in the similar way as I explained for the ABX1 (first phase) above which results in ABX3 and that results in ABX4, ABX5, ABX6… in a nutshell it goes on and on.

Some Examples

Remember that ABX1 in our case is better alternative of “Before ABX1” to understand this cycle fully let’s take some real life examples.

Clock-Watch----------Wrist Watch----------Mobile Phone

(Before ABX1)----------(ABX1)----------------(ABX2)

While wrist watch market is still in growth in developed countries (because of HI/IV by Samsung, Apple etc) it has been badly affected (decline) in developing countries where people consider a mobile phone better alternative to wrist watch for different reasons like why to have a wrist watch when you have mobile phone or it costs good amount to have a good wrist watch etc.

Eye Sight Glasses----------Contact Lenses----------Laser

(Before ABX1)---------------(ABX1)-----------------(ABX2)

Undoubtedly eye sight glasses are still in but contact lenses are hot too and laser isn’t doing bad either, what it means is that maturity has hit in for both “before ABX1” and “ABX1” while ABX2 is in somewhat introduction stage in some markets and at the same time things are totally opposite for ABX1,X2 in markets where people can’t afford contact lenses for reasons like cost, pollution and laser for cost, availability etc.

 RCA Tape Cartridge----Cassette-----Floppy Disc,Hard Disc----Memory Cards etc----Cloud

(Before ABX1)------------(ABX1)------------(ABX2)--------------------(ABX3)--------------(ABX4)

ABX2 also include video cassettes, ABX3 includes TB hard drives, other flash, portable USB drives. Now for “BEFORE ABX1” market went through decline like five, six decades back likewise for ABX1 but at the same time we can still find markets in maturity or in decline for ABX1 in developing countries.

Similarly developing countries markets are in decline for ABX2 (esp floppy discs) and dead in developed countries while still hot or in growth for hard drives but those hard drives are far better than what used to be hard drives in the beginning.

Similarly market for ABX3 in both developing and developed countries is still in growth while market for ABX4 in developing countries is introduction and in growth in developed countries.

Scelbi & Mark-8-----Desktop-------Laptops--------Pads,Tabs,Smartphones

(Before ABX1)------(ABX1)--------(ABX2)-------------(ABX3)

And you can see what has been happening throughout the last seven, eight decades to the computers up to the present day.

Horse Drawn Vehicle, Balloons--Early Steam Cars,Steam Engine---Automobiles, Planes, Airships

(Before ABX1)-----------------------------(ABX1)----------------------------------(ABX2)------------

-----Jets, Jumbo jets, Bullet Trains, Modern Cars, Speed Bikes.

------------------------------(ABX3)

Considering these examples we can easily deduce that innovation plays essential part not only in innovating successful products/services, improving business competitiveness but is also needed constantly even after achieving what it is meant to achieve.

That’s it, share you mind, comment box is just under ;)

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Customers & Open Innovation  (must read esp if your business can't afford innovation)

Product Design : What You as Designer, Marketer Must know!

References:

1.      Barney, J.B. (1991) Firm Resources and Sustained Competitive Advantage. Journal of Management, 17, 99–120.