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Since new-to-the-market products are the essence of strategic supremacy, why are companies spending their time, money and energy on product extensions at the expense of new-to-the-market products?<\/p>\n
Most companies commit one, or more, of four \u2018sins\u2019 that kill new product creation and lead to a company\u2019s loss of supremacy over its competitors. Unfortunately, all 4 sins are self- inflicting wounds:<\/p>\n
Sin 1: Too Much Focus on Current Customers<\/span><\/h2>\nWho do most books on product innovation tell you to consult in order to get inspiration for new products? The obvious answer: your customers. WRONG \u2013 dead wrong! If a company focuses its entire effort on current customers as a source for new products, it will always end up with incremental products. The reason is very simple. Current customers are very good at telling you what is currently wrong with your current product. They can do this well because they do side-by-side comparisons and they identify performance gaps in your product relative to your competitors. Naturally, you go back to the factory, tweak the product a little and come back with an incremental improvement. And the pattern is set and keeps repeating itself.<\/p>\n
\n\n\n\nWorse than that, your current customers can begin to dominate your product development process. You cannot rely on current customers for your new product ideas because they are not always aware of what they will need in the future. For example:<\/p>\n
Q: How many of 3M\u2019s millions of customers asked 3M for Post-it Notes?<\/p>\n
A: None.<\/p>\n
Q: How many of Sony\u2019s millions of customers ever asked Mr Akio Morita (Sony\u2019s founder) for a Walkman?<\/p>\n
A: Not one.<\/p>\n
Q: Did anyone on this planet ever ask Steve Jobs and Steve Wozniak for an Apple computer, iPad or iPhone?<\/p>\n
A: No. Never.<\/p>\n
In order to propagate competitive supremacy and create new revenue streams, it is imperative to concentrate a company\u2019s product innovation resources on new-to-the- market products. Livio De Simone, retired CEO of 3M, once said: \u201cThe most interesting products are the ones that people need but can\u2019t articulate that they need\u201d. New-to-the- market products satisfy the future implicit needs that you have identified and that your customers cannot articulate to you today. The upshot will be products that will allow you to change the game.<\/p>\n
\n\n\n\nSin 2: Protect the \u201cCash Cow\u201d Mentality<\/span><\/h2>\nEvery company, over time, has products that become cash cows. Never worship at the altar of the cash cow. You will lose your supremacy.<\/p>\n
IBM\u2019s cash cow, as we all know, had been its mainframes \u2013 once the workhorses of the computing industry. In 1968, in its Swiss laboratories, IBM invented the first microchip \u2013 the RISC chip \u2013 with more processing capacity than its smaller mainframes. A small computer prototype, powered by this chip, was built and could have been the first PC the world saw. IBM, however, made a deliberate decision not to introduce that chip, because it could foresee the devastation it might have on its mainframe business. In 1994, 26 years later and maybe 26 years too late, IBM finally introduced the RISC chip under the name PowerPC. In the meantime, IBM lost the opportunity to be the powerhouse in the consumer market that it is in the business market.<\/p>\n
\n\n\n\n\n\u201cThere is no such thing as a mature market. What we need are mature executives who can make markets grow\u201d.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n\n\n\n\nSin 3: The Mature Market Syndrome<\/span><\/h2>\n\u201cOur industry is mature. There is no more growth in these markets\u201d.<\/p>\n
Many people would claim that the reason products become generic, prices come down to the lowest levels, and growth stops is that the \u2018market is mature\u2019. Mature markets are something of a myth.<\/p>\n
Who would have believed 20 years ago – when everyone owned a \u00a310 pair of trainers – that people would pay \u00a3100 for a pair? Some of these trainers are solely worn for fashion purposes and unlikely to ever see a running track! Along came Nike and Reebok and the \u2018mature market\u2019 exploded.<\/p>\n
A few short years ago Starbucks revolutionised the takeout coffee business by introducing unique products and marketing in a \u2018mature\u2019 industry. Now our high streets and public transport systems are jammed with takeaway- coffee-cup-hugging individuals.<\/p>\n
Lawrence Bossidy, formerly CEO of Allied Signal couldn\u2019t have summed it up better when he said: \u201cThere is no such thing as a mature market. What we need are mature executives who can make markets grow\u201d.<\/p>\n
\n\n\n\nSin 4: The Commodity Product Fallacy<\/span><\/h2>\n\u201cWe\u2019re in the commodity business\u201d is another mind-set that can bring down a company\u2019s supremacy. This is also a state of mind. Products become commodities when management convinces itself that they are. It\u2019s a self-fulfilling prophecy.<\/p>\n
An example is baking soda, a \u2018commodity\u2019 product that has been around since the days of the pharaohs. One day someone placed a small quantity in a refrigerator and noticed that it absorbed odours, soon afterwards the launch of deodorant with baking soda. We\u2019ve since had teeth whitening baking soda toothpaste, not to mention dishwasher tablets and sink unblockers with this same ingredient.<\/p>\n
Then there is the \u2018mother\u2019 of all commodities \u2013 water. Look at what the French can do with water. They have mastered the marketing of this mundane commodity by branding it under a variety of names such as Vitel, Evian and Perrier. Knowing that people are becoming more concerned about the quality of the water they drink, they began to market bottled water at exorbitant prices. This concept was immediately successful even in places where tap water is excellent and essentially free. Through brilliant marketing, they made water \u2018trendy\u2019.<\/p>\n
Drinks manufacturers have taken the concept a big step further by adding nutrients to water to create a new category: sports water. Some of these even incorporate the \u2018grandmother\u2019 of all commodities: oxygen.<\/p>\n
NEW TO THE MARKET PRODUCTS BREED SUPREMACY<\/h3>\n
Sony, 3M, Canon, Microsoft, Johnson & Johnson, Dyson and many others maintain their control of the \u2018sandbox\u2019 not be introducing \u2018me-too\u2019 products but rather by focusing their resources on the creation of new-to-the-market products. These have three inherent characteristics that contribute to propagating supremacy over their competitors:<\/p>\n
\n\n- A period of exclusivity. When you are the only product in the market, you are the only one.<\/li>\n
- Capability of charging premium prices. During this period of exclusivity, you can obtain premium prices, as opposed to me-too products, where every transaction comes down to haggling over price.<\/li>\n
- Ability to build in barriers. Being first to the market allows you to build in barriers that make it very difficult for competitors to gain entry into your game.<\/li>\n<\/ul>\n<\/ul>\n
After all, that\u2019s what supremacy is all about: changing the game and creating the rules to which competitors who wish to play your game must submit.<\/p>\n
THE NEED FOR PRODUCT INNOVATION<\/h3>\n
DPI\u2019S Strategic Product Innovation Process is a powerful tool that can help jump-start your organisation\u2019s ability to generate a steady stream of innovative new product and\/or service concepts, and to identify opportunities for entirely new markets and customer groups. The future holds vast opportunities for growth, if you know how to use change to your advantage.<\/p>\n
Get in touch if you want to learn how to develop a continuous pipeline of new products\/services for your organisation.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Since new-to-the-market products are the essence of strategic supremacy, why are companies spending their time, money and energy on product extensions at the expense of new-to-the-market products? Most companies commit one, or more, of four \u2018sins\u2019 that kill new product creation and lead to a company\u2019s loss of supremacy over its competitors. Unfortunately, all 4 […]<\/p>\n","protected":false},"author":1,"featured_media":2505,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77],"tags":[],"_links":{"self":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755"}],"collection":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/comments?post=2755"}],"version-history":[{"count":6,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755\/revisions"}],"predecessor-version":[{"id":2767,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755\/revisions\/2767"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/media\/2505"}],"wp:attachment":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/media?parent=2755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/categories?post=2755"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/tags?post=2755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Worse than that, your current customers can begin to dominate your product development process. You cannot rely on current customers for your new product ideas because they are not always aware of what they will need in the future. For example:<\/p>\n
Q: How many of 3M\u2019s millions of customers asked 3M for Post-it Notes?<\/p>\n
A: None.<\/p>\n
Q: How many of Sony\u2019s millions of customers ever asked Mr Akio Morita (Sony\u2019s founder) for a Walkman?<\/p>\n
A: Not one.<\/p>\n
Q: Did anyone on this planet ever ask Steve Jobs and Steve Wozniak for an Apple computer, iPad or iPhone?<\/p>\n
A: No. Never.<\/p>\n
In order to propagate competitive supremacy and create new revenue streams, it is imperative to concentrate a company\u2019s product innovation resources on new-to-the- market products. Livio De Simone, retired CEO of 3M, once said: \u201cThe most interesting products are the ones that people need but can\u2019t articulate that they need\u201d. New-to-the- market products satisfy the future implicit needs that you have identified and that your customers cannot articulate to you today. The upshot will be products that will allow you to change the game.<\/p>\n
Sin 2: Protect the \u201cCash Cow\u201d Mentality<\/span><\/h2>\nEvery company, over time, has products that become cash cows. Never worship at the altar of the cash cow. You will lose your supremacy.<\/p>\n
IBM\u2019s cash cow, as we all know, had been its mainframes \u2013 once the workhorses of the computing industry. In 1968, in its Swiss laboratories, IBM invented the first microchip \u2013 the RISC chip \u2013 with more processing capacity than its smaller mainframes. A small computer prototype, powered by this chip, was built and could have been the first PC the world saw. IBM, however, made a deliberate decision not to introduce that chip, because it could foresee the devastation it might have on its mainframe business. In 1994, 26 years later and maybe 26 years too late, IBM finally introduced the RISC chip under the name PowerPC. In the meantime, IBM lost the opportunity to be the powerhouse in the consumer market that it is in the business market.<\/p>\n
\n\n\n\n\n\u201cThere is no such thing as a mature market. What we need are mature executives who can make markets grow\u201d.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n\n\n\n\nSin 3: The Mature Market Syndrome<\/span><\/h2>\n\u201cOur industry is mature. There is no more growth in these markets\u201d.<\/p>\n
Many people would claim that the reason products become generic, prices come down to the lowest levels, and growth stops is that the \u2018market is mature\u2019. Mature markets are something of a myth.<\/p>\n
Who would have believed 20 years ago – when everyone owned a \u00a310 pair of trainers – that people would pay \u00a3100 for a pair? Some of these trainers are solely worn for fashion purposes and unlikely to ever see a running track! Along came Nike and Reebok and the \u2018mature market\u2019 exploded.<\/p>\n
A few short years ago Starbucks revolutionised the takeout coffee business by introducing unique products and marketing in a \u2018mature\u2019 industry. Now our high streets and public transport systems are jammed with takeaway- coffee-cup-hugging individuals.<\/p>\n
Lawrence Bossidy, formerly CEO of Allied Signal couldn\u2019t have summed it up better when he said: \u201cThere is no such thing as a mature market. What we need are mature executives who can make markets grow\u201d.<\/p>\n
\n\n\n\nSin 4: The Commodity Product Fallacy<\/span><\/h2>\n\u201cWe\u2019re in the commodity business\u201d is another mind-set that can bring down a company\u2019s supremacy. This is also a state of mind. Products become commodities when management convinces itself that they are. It\u2019s a self-fulfilling prophecy.<\/p>\n
An example is baking soda, a \u2018commodity\u2019 product that has been around since the days of the pharaohs. One day someone placed a small quantity in a refrigerator and noticed that it absorbed odours, soon afterwards the launch of deodorant with baking soda. We\u2019ve since had teeth whitening baking soda toothpaste, not to mention dishwasher tablets and sink unblockers with this same ingredient.<\/p>\n
Then there is the \u2018mother\u2019 of all commodities \u2013 water. Look at what the French can do with water. They have mastered the marketing of this mundane commodity by branding it under a variety of names such as Vitel, Evian and Perrier. Knowing that people are becoming more concerned about the quality of the water they drink, they began to market bottled water at exorbitant prices. This concept was immediately successful even in places where tap water is excellent and essentially free. Through brilliant marketing, they made water \u2018trendy\u2019.<\/p>\n
Drinks manufacturers have taken the concept a big step further by adding nutrients to water to create a new category: sports water. Some of these even incorporate the \u2018grandmother\u2019 of all commodities: oxygen.<\/p>\n
NEW TO THE MARKET PRODUCTS BREED SUPREMACY<\/h3>\n
Sony, 3M, Canon, Microsoft, Johnson & Johnson, Dyson and many others maintain their control of the \u2018sandbox\u2019 not be introducing \u2018me-too\u2019 products but rather by focusing their resources on the creation of new-to-the-market products. These have three inherent characteristics that contribute to propagating supremacy over their competitors:<\/p>\n
\n\n- A period of exclusivity. When you are the only product in the market, you are the only one.<\/li>\n
- Capability of charging premium prices. During this period of exclusivity, you can obtain premium prices, as opposed to me-too products, where every transaction comes down to haggling over price.<\/li>\n
- Ability to build in barriers. Being first to the market allows you to build in barriers that make it very difficult for competitors to gain entry into your game.<\/li>\n<\/ul>\n<\/ul>\n
After all, that\u2019s what supremacy is all about: changing the game and creating the rules to which competitors who wish to play your game must submit.<\/p>\n
THE NEED FOR PRODUCT INNOVATION<\/h3>\n
DPI\u2019S Strategic Product Innovation Process is a powerful tool that can help jump-start your organisation\u2019s ability to generate a steady stream of innovative new product and\/or service concepts, and to identify opportunities for entirely new markets and customer groups. The future holds vast opportunities for growth, if you know how to use change to your advantage.<\/p>\n
Get in touch if you want to learn how to develop a continuous pipeline of new products\/services for your organisation.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Since new-to-the-market products are the essence of strategic supremacy, why are companies spending their time, money and energy on product extensions at the expense of new-to-the-market products? Most companies commit one, or more, of four \u2018sins\u2019 that kill new product creation and lead to a company\u2019s loss of supremacy over its competitors. Unfortunately, all 4 […]<\/p>\n","protected":false},"author":1,"featured_media":2505,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77],"tags":[],"_links":{"self":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755"}],"collection":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/comments?post=2755"}],"version-history":[{"count":6,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755\/revisions"}],"predecessor-version":[{"id":2767,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755\/revisions\/2767"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/media\/2505"}],"wp:attachment":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/media?parent=2755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/categories?post=2755"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/tags?post=2755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\u201cThere is no such thing as a mature market. What we need are mature executives who can make markets grow\u201d.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n \u201cOur industry is mature. There is no more growth in these markets\u201d.<\/p>\n Many people would claim that the reason products become generic, prices come down to the lowest levels, and growth stops is that the \u2018market is mature\u2019. Mature markets are something of a myth.<\/p>\n Who would have believed 20 years ago – when everyone owned a \u00a310 pair of trainers – that people would pay \u00a3100 for a pair? Some of these trainers are solely worn for fashion purposes and unlikely to ever see a running track! Along came Nike and Reebok and the \u2018mature market\u2019 exploded.<\/p>\n A few short years ago Starbucks revolutionised the takeout coffee business by introducing unique products and marketing in a \u2018mature\u2019 industry. Now our high streets and public transport systems are jammed with takeaway- coffee-cup-hugging individuals.<\/p>\n Lawrence Bossidy, formerly CEO of Allied Signal couldn\u2019t have summed it up better when he said: \u201cThere is no such thing as a mature market. What we need are mature executives who can make markets grow\u201d.<\/p>\n \u201cWe\u2019re in the commodity business\u201d is another mind-set that can bring down a company\u2019s supremacy. This is also a state of mind. Products become commodities when management convinces itself that they are. It\u2019s a self-fulfilling prophecy.<\/p>\n An example is baking soda, a \u2018commodity\u2019 product that has been around since the days of the pharaohs. One day someone placed a small quantity in a refrigerator and noticed that it absorbed odours, soon afterwards the launch of deodorant with baking soda. We\u2019ve since had teeth whitening baking soda toothpaste, not to mention dishwasher tablets and sink unblockers with this same ingredient.<\/p>\n Then there is the \u2018mother\u2019 of all commodities \u2013 water. Look at what the French can do with water. They have mastered the marketing of this mundane commodity by branding it under a variety of names such as Vitel, Evian and Perrier. Knowing that people are becoming more concerned about the quality of the water they drink, they began to market bottled water at exorbitant prices. This concept was immediately successful even in places where tap water is excellent and essentially free. Through brilliant marketing, they made water \u2018trendy\u2019.<\/p>\n Drinks manufacturers have taken the concept a big step further by adding nutrients to water to create a new category: sports water. Some of these even incorporate the \u2018grandmother\u2019 of all commodities: oxygen.<\/p>\n Sony, 3M, Canon, Microsoft, Johnson & Johnson, Dyson and many others maintain their control of the \u2018sandbox\u2019 not be introducing \u2018me-too\u2019 products but rather by focusing their resources on the creation of new-to-the-market products. These have three inherent characteristics that contribute to propagating supremacy over their competitors:<\/p>\n After all, that\u2019s what supremacy is all about: changing the game and creating the rules to which competitors who wish to play your game must submit.<\/p>\n DPI\u2019S Strategic Product Innovation Process is a powerful tool that can help jump-start your organisation\u2019s ability to generate a steady stream of innovative new product and\/or service concepts, and to identify opportunities for entirely new markets and customer groups. The future holds vast opportunities for growth, if you know how to use change to your advantage.<\/p>\n Get in touch if you want to learn how to develop a continuous pipeline of new products\/services for your organisation.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Since new-to-the-market products are the essence of strategic supremacy, why are companies spending their time, money and energy on product extensions at the expense of new-to-the-market products? Most companies commit one, or more, of four \u2018sins\u2019 that kill new product creation and lead to a company\u2019s loss of supremacy over its competitors. Unfortunately, all 4 […]<\/p>\n","protected":false},"author":1,"featured_media":2505,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77],"tags":[],"_links":{"self":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755"}],"collection":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/comments?post=2755"}],"version-history":[{"count":6,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755\/revisions"}],"predecessor-version":[{"id":2767,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/posts\/2755\/revisions\/2767"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/media\/2505"}],"wp:attachment":[{"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/media?parent=2755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/categories?post=2755"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/decisionprocesses.com\/wp-json\/wp\/v2\/tags?post=2755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Sin 3: The Mature Market Syndrome<\/span><\/h2>\n
Sin 4: The Commodity Product Fallacy<\/span><\/h2>\n
NEW TO THE MARKET PRODUCTS BREED SUPREMACY<\/h3>\n
\n
\n
THE NEED FOR PRODUCT INNOVATION<\/h3>\n