Analysis of mix of innovation projects

In the area of new product innovations, there is a need to analyse the mix of new products to see if the new product relates to the present product mix and to the company's innovation strategy position. Cooper (1998) identified four types of companies in innovation strategy development:

1. Prospectors - the industry innovators.

2. Analysers - the fast followers.

3. Defenders - the holders of secure positions.

4. Reactors - the responders to competitive pressures.

His analysis of their project types is shown in Table 2.6.

The emphasis here is on products but it is indicative for all innovations. There are companies seeking innovations that will change the company; others that wish to innovate in their present area and situation. Souder (1987) called these respectively promotive and restrictive organisations. In the promotive organisation, growth and innovation were the important goals; acquisition and product

Table 2.6 Project types by business strategies

Project type

Prospector

Analyser

Defender

Reactor

New-to-the-world (%)

30

6

7

0

New-to-the-firm (%)

15

16

17

B

Additions to existing

22

42

40

4B

product line (%)

Improvements to

11

16

11

13

existing products (%)

Repositionings (%)

B

B

9

11

Cost reductions (%)

15

17

21

12

Number of firms

30

22

22

4

Source: From Product Leadership: Creating and Launching Superior New Products by Robert Cooper. Copyright © 1998 by Robert G. Cooper. Reprinted by permission of Perseus Book Publishers, a member of Perseus Books, LLC.

Source: From Product Leadership: Creating and Launching Superior New Products by Robert Cooper. Copyright © 1998 by Robert G. Cooper. Reprinted by permission of Perseus Book Publishers, a member of Perseus Books, LLC.

diversification were cited as means. Growth and innovation were ranked higher as goals than market share maximisation, profit maximisation and company stock (share price) maximisation. In restrictive companies, market share, stock price and profit maximisation were often ranked higher than growth. It is important to see that the mix of proposed innovation projects fits into the company's overall desire to be a prospector, analyser, defender or reactor.

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