Level of Innovation

Level of Innovation
HIGH

DEGREE OF VALUE ADD TRANSFORMATIONAL OR RADICAL

BREAKTHROUGH

INCREMENTAL

LOW

HIGH
DEGREE OF NEWNESS
Incremental innovation

 The term “incremental innovation” refers to a series of small improvements made to a
company's existing products or services. Generally, these low-cost improvements help
further differentiate a company from the competition while building on current offerings
 The innovation can be like new flavors, shifts to better or all-natural ingredients,
packaging improvements, faster/slower functioning, just-in-time supply chain
enhancements, bigger/smaller sizing, cost reductions, heavier/lighter weight,
 The innovation can help product, service, and business life cycles and improve
profitextend ablity.
Example of the incremental innovation

 Gillette constantly upgrades its razors, adding new features, like extra blades, heated
razors, and a pivoting head
Breakthrough innovation

 Breakthrough innovation is when you bring something new to the world. It is developing
something that no one else has done before; really original, something that couldn't have
been possible
 Breakthrough Innovation takes a current process or product and typically provides greater
efficiency or cost effectiveness.
 Breakthrough innovation produces a substantial competitive edge for a while, although the
length of time anyone can maintain such an advantage is growing increasingly shorter.
 One of the best cited examples of breakthrough innovation on the tech front is the first
iPhone. By harnessing new technology, Apple was able to bring a fundamentally new
product to market, creating new demand in the process.
Example of Breaktrhough Innovation
Transformational or Radical innovation

 Transformational innovation is changes that shift the entire system

into a new framework, that is created to be viable for the future.
 Radical innovation is an invention that destroys or supplants an
existing business model. Unlike architectural or incremental
innovation, radical innovation blows up the existing system or
process and replaces it with something entirely new.
Sample of Radical Innovation

 Metromile, a US car insurance company, is another great example of a radical

innovation. The firm harnesses a new technology – a plug-in telematics device for your
car– to offer a new business model; the ability to buy insurance on a pay-per-mile basis.
 CRM System (Customer Relatioship Management) : can build lasting relatioships with
your clients and customers and grow your sales performance while improving your
customer loyalty. You can use social media for your CRM system works.
Example of transformational or Radical
Innovation

Mercedes-Benz F 015 Luxury in Motion Concept

Example of Radical Innovation
Assignment

 The purposes of the innovation

 When is the right time for producers to do the innovation?
 The benefits of the innovation for customers and producers
 The probably counter action from competitors