Why is innovation so important?

Developing products and / or services that people are willing to buy is the foundation of any business.

But when to develop new ones and when to concentrate on those that you already have is challenge.

This is where ‘innovation’ decisions can be complex. I have mixed views on this subject because:

  • Innovation is something that is self-evidently useful and crucial for all businesses. It can often generate significant competitive advantage.
  • Sometimes innovation can mean a deviation from a company’s core business. This may or may not be a good idea. The kind of innovation that pursues legendary new customers in some unknown market that are more willing to buy from us, or a new product that will make us all rich, can be dangerous. It is possible to innovate for the wrong reasons.

This second type of innovation can carry additional risks in that it can be difficult to communicate the idea internally and bring others along whose support will be critical in making the diversification a reality.

Like most business decisions, the use of judgment and not losing sight of what it was that got the business to where it is today are of real value. The role of marketing in this process should not be overlooked: Understanding customers, their needs, their preferences and the alternatives available to them. These fundamentals have never been more important.

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