Marketing Strategy and Competitive Positioning pdf ebook

Inside–outside venture approaches fit both big and small/medium-sized firms. Smaller 
firms with the advantages of advanced technology, flexibility, vigour and/or entrepre-
neurial flair could team up with larger firms with the capital, distribution network and 
marketing muscle to gain market entry. The big firm gains through achieving entry into 
promising technologies that were too risky and ill-fitted to their mainstream business 
(the alliances between pharmaceuticals and biotechnology firms are a case in point).
The more radical the new product project (which means higher risk), the greater the need 
for project focus and its protection from current departmental and operational influences 
and constraints. The functional and taskforce options are therefore appropriate for low-
risk, incremental product innovations (such as improvements, repositionings, new sizes, 
etc., involving present product lines). A project team–functional matrix is most suitable for 
marginally riskier projects, involving expansion in the number of product lines. Venture 
teams, spin-outs and inside–outside venture options are for radical, high-risk projects where 
internal constraints and opposition are expected to be very high. 
The proposed radical structures help large firms capture the benefits of a small firm. 
Ironically, the idea that ‘small is good’ stems from the observation that large, innovative 
firms work in non-bureaucratic, smaller settings. They try to gain the advantages of being 
small. But, of course, size is not a determinant of innovation success. Many new products 
introduced by small firms fail because they should never have come about – it may be that 
they were badly conceived, they failed to meet market needs, or that the company lacked 
the marketing skills required to prise open new markets.
Summary 
In this chapter we approach innovation at two levels: strategic innovation issues and the 
mechanics of new product development processes. 
Innovation strategy is driven by the goal of creating the innovative company and achieving 
real value innovation that drives effective strategy and positioning in a market. Issues exam-
ined include: the link between innovation patterns and fundamental change in an industry; the 
creation of new business models to drive effective value innovation; the impact of radical and 
disruptive innovation on competitive patterns; the possibilities for proactive cannibalisation 
strategies; and the creation of innovation networks, often on a global basis, to encompass 
collaborative and open source innovation. 
We then turned attention to the product development process in companies. Importantly, 
we saw that product innovation is not a one-off activity. A successful, profitable innovation 
can see a firm through for a while, but long-run survival depends on new products to balance 
its future portfolio ( Chapter 2 ), replace declining products and cater for new customer needs. 
Many businesses are caught out because management has failed to use the profits from 
current innovations to develop more innovations for future markets. Today’s breadwinners will 
eventually dry up as competitive forces intensify over the product’s life cycle. New products – 
tomorrow’s breadwinners – are necessary to maintain the firm’s position in the marketplace. 
One win is insufficient; multiple wins are necessary for corporate longevity. 
Summary 

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