Marketing Strategy and Competitive Positioning pdf ebook

Figure 12.3 
Accelerated 
diffusion of 
innovations
Faster innovation
diffusion
Advantage over previous solutions
Compatibility with existing processes
Low complexity for ease of understanding
Divisibility to facilitate trial
Communicability

---

338
CHAPTER 12 COMPETING THROUGH INNOVATION
Despite the inevitable risk of being a pioneer, first to market is often best for several 
reasons. The news value of an innovation peaks in the early stages, and this offers maxi-
mum communication impact and a chance for widespread consumer trial. The innovator 
catches consumers first; this means that competitors who follow must improve their market 
positioning and produce better and/or cheaper products to make consumers switch. This 
may not be easy to achieve once the pioneer has secured strong consumer loyalty and a 
reputation for innovation in the marketplace.
For example, Richard Branson explains: ‘A good idea for a new business tends not to 
occur in isolation, and often the window of opportunity is very small. So speed is of the 
essence’ (Hamm, 2006). In many companies, the time to bring new products to market has 
halved in recent years: at Nissan, the development time for new cars used to be 21 months, 
now it is 10½ months; Nokia and Motorola used to take 12 to 18 months to develop new 
mobile phone models, now it is six to nine months; H&M can get fashion clothes from 
sketch pad to the racks in its stores in just three weeks; Samsung partnered with XM Satel-
lite Radio to bring the first portable satellite radio combined with music player to store 
shelves in nine months from the partners shaking hands on the deal. Similarly, by closely 
aligning design, R&D and marketing, appliance maker Electrolux cuts product launch 
times by a third compared to competitors (Matlack, 2013). At the other end, it also follows 
that fast innovators such as Virgin and Google are also fast to get out of a venture when 
things underperform (Hamm, 2006).
Nonetheless, it should be noted that first mover advantage is not always the best goal. In 
some situations, strategy may be more about ‘active waiting’, rather than speed and trying 
to establish a first-mover advantage. Donald Sull argues, for example, that really attractive 
business opportunities are quite rare, and their timing is almost never under the control 
of an individual company, suggesting that we should be ready when the big opportunities 
emerge and protect resources during the long periods of ‘business as usual’. He argues that 
successful businesses often falter because managers experienced in stable, familiar markets 
stumble when they enter less certain, volatile markets – they fail to create a long-term 
strategy that will produce sustainable advantage. Active waiting involves anticipating and 
making preparations, ready to seize opportunities and deal with threats when they arise 
(Sull, 2005).
Making a reasoned decision on how quickly to move and the type of business model 
appropriate to deliver the speed required has become a key part of strategic thinking. The 
most obvious answers are not necessarily the most useful ones. The strategic issue is not 
just what to do, but when and how quickly.
12.2.2 The case of business products
Studies of new business-to-business product successes and failures make the following dis-
tinctions between successes and failures: product uniqueness (innovativeness) or superiority; 
management’s possession of market knowledge and marketing proficiency; and presence of 
technical and production synergies and proficiency.
The first dimension – industrial product uniqueness/superiority – is very close to that for 
consumer products. In this respect, industrial and consumer products are similar. It is likely 
that industrial and consumer products are similar in other ways too. Successful industrial 
innovators study their customers and market well. They carry out market research to gain 
knowledge of customers’ requirements/needs; they are sensitive to price as well as to the 
intricacies of buyer behaviour.
Successful innovators acquire as much of the required information as possible to enable 
them to forecast market size and determine potential demand for their new product. They 
test the market prior to product launch. There is strong and often well-targeted sales sup-
port, which recognises the need for forceful communications to stimulate primary demand 
and to prise open new markets.

---

339
NEW PRODUCTS
Successful industrial innovations are clearly not the result of sophisticated technology 
alone. Mismanagement of technical and technological resources can have a detrimental 
effect on new product performance. Successful industrial innovators ensure there is synergy 
between the firm’s engineering and production capabilities and the new product project. 
They also undertake a range of technical activities and do these proficiently – preliminary 
technical assessment, product development, prototype testing with customers, production 
start-up, with facilities well geared for launch. Their technical staff know the product tech-
nology well. They are familiar with the product design.
12.2.3 New product failures
One question central to manager interests in innovation strategy is, in what ways do new 
products fail? Answering this question helps us appreciate what actions the firm should take 
to avoid different types of product failure. One way of classifying new product failures is 
shown in Figure 12.4.
1