Sustaining Innovation

Definition

Sustaining innovation refers to improvements and enhancements made to existing products, services, or processes that help a company maintain its market position and satisfy the needs of its current customers. This type of innovation is crucial for businesses as it allows them to refine their offerings, respond to customer feedback, and keep up with competitors while ensuring profitability.

5 Must Know Facts For Your Next Test

1. Sustaining innovation typically focuses on higher-end market segments, where companies seek to improve performance or quality for existing customers.
2. Companies often invest heavily in sustaining innovations to retain competitiveness, which may lead to higher customer satisfaction and loyalty.
3. Examples of sustaining innovation include upgrading smartphone features, enhancing software capabilities, or improving manufacturing processes.
4. While sustaining innovations are essential for maintaining market share, they may also divert attention from pursuing disruptive innovations that could capture emerging markets.
5. In many cases, large organizations excel at sustaining innovation but struggle with radical or disruptive innovations due to their established practices and resource allocation.

Review Questions

• How does sustaining innovation differ from disruptive innovation in terms of market focus and customer impact?
  • Sustaining innovation primarily targets existing markets by enhancing the performance of current products or services to satisfy existing customers. In contrast, disruptive innovation aims to create new markets with simpler, more affordable alternatives that can attract new customers, often displacing established products. While sustaining innovations help companies maintain their competitive edge, disruptive innovations can change the industry landscape entirely by addressing unmet needs or introducing novel solutions.
• Discuss how a company's technology strategy can leverage sustaining innovation to gain a competitive advantage in the market.
  • A company’s technology strategy can leverage sustaining innovation by aligning product development with customer feedback and market trends, allowing the firm to continuously improve its offerings. By investing in research and development focused on refining existing products, companies can enhance their value proposition and differentiate themselves from competitors. This approach not only helps in retaining current customers but also attracts new ones who are looking for superior options in a crowded marketplace.
• Evaluate the long-term implications of focusing heavily on sustaining innovation over radical innovation within an organization.
  • Focusing heavily on sustaining innovation can lead to short-term success by enhancing existing products and satisfying current customers. However, this approach may also create vulnerabilities if the organization neglects radical innovation opportunities. Over time, reliance on sustaining innovations can result in stagnation, making it challenging for companies to adapt to market disruptions. Organizations must strike a balance between maintaining their current offerings and exploring breakthrough innovations that could redefine their competitive landscape and ensure long-term survival.

Related terms

Disruptive Innovation: Disruptive innovation describes innovations that create new markets by offering simpler, cheaper alternatives, often displacing established market leaders.

Incremental Innovation: Incremental innovation involves small, gradual improvements or upgrades to existing products, enhancing performance or efficiency without changing the core design.

Radical Innovation: Radical innovation refers to groundbreaking changes that significantly alter industries or create entirely new markets through innovative concepts or technologies.