Innovation Streams



organizations can create competitive advantage for themselves if they have a distinctive competence that allows them to make do or perform something better than their competitors a competitive advantage becomes sustainable if other companies cannot duplicate the benefits obtained from the distinctive competence let's take a look at innovation streams technological innovation however can enable competitors to duplicate the benefits obtained from a company's distinctive competitive advantage it can also quickly turn a company's competitive advantage into a competitive disadvantage companies that want to sustain a competitive advantage must understand and protect themselves from the strategic threats of innovation over the long run the best way for a company to do this is to create a stream of its own innovative ideas and products year after year consequently we define innovation streams as patterns of innovation over time that can create sustainable competitive advantage an innovation stream begins with a technological discontinuity in which a scientific advance or unique combination of existing technology creates a significant breakthrough in performance or function technological discontinuities are followed by a discontinuous change which is characterized by technological substitution and design competition technological substitution occurs when customers purchase new technologies or replace older technologies discontinuous change is also characterized by design competition in which the old technology and several new technologies compete to establish a new technological standard or dominant design discontinuous change is followed by an emergence of a dominant design which becomes a new accepted market standard for technology dominant designs emerge in several ways one is critical mass meaning that a particular technology can become the dominant design simply because most people use it no matter how it happens the emergence of a dominant design is a key event in the innovation stream first the emergence of a dominant design indicates that there are winners and losers technological innovation is both competence enhancing and competence destroying companies that bet on the now dominant design usually prosper by contrast when companies bet on the wrong design or the old technology they may experience technological lockout which occur is when a new dominant design prevents a company from competitively selling its products second the emergence of a dominant design signals a shift from design experimentation and competition to incremental change a phase in which companies innovate by lowering the cost and improving the functioning and performance of the dominant design this focus on improving the dominant design continues until the next technological discontinuity occurs

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