I thought the following snippet maybe obvious to many but it highlighted to me the breadth of what we mean by innovation. Although this discusses scaling to mass markets, it is more than appropriate to scaling in niche markets as well. My experience at DuPont suggests that companies can drive growth by scaling good ideas vs. just inventing them; many in fact felt this was the true greatness of DuPont…..
Costas Markides and Paul Geroski once more write about colonizers and consolidators in Strategy + Business (Issue 35). They now recommend large corporations to stick with what they do best in: operating at large scale. So instead of treating discovery as the only holy grail in I. (as many consultants are advising them apparently), they argue scaling up is actually as innovative as discovery. More importantly, it is also creating a tremendous amount of value. Moreover, the authors also explain the skills a company needs to excel in turning niche markets into mass markets. They are:
1. Focus on the price/performance trade-off :don't focus on creating a technically superior product but compete on a reasonable quality at an attractive price to mass (any size customer segment) consumers
2. Get a bandwagon rolling: alliance strategies, merge with a major rival or use marketing to create the illusion that a design has already become dominant
3. Reduce consumer risk in adopting the new product (universal to any market size)
4. Build a strong mass distribution channel (you want to build a strong distribution regardless of the scale)
5. Create complementary products (or support complementary products from other parties).