Innovation is a critical component in business growth and remaining competitive against more prominent players. It can be typical in industries like food and beverage and consumer electronics, which must stay apace with rapidly changing consumer tastes, or it may be thrust upon more stable industries out of necessity.
That necessity often takes the form of disruption, where new products are added to a growing list of choices in a market or a new product becomes popular. It displaces traditional finished goods in the same consumer space.
But disruption plays more than one role in innovation, and one is innovation due to disruption. The other is disruptive innovation.
Innovation Due to Disruption
Few have witnessed the level of unexpected disruption of the last four years, whether a large established entity or a brand-new business just getting started. Of course, the most significant disruption in the previous few years was Covid-19.
Almost overnight, many companies had to shift their business strategies, pivot to new products, and abandon older ones to address the new reality. This event thrust rapid iteration in many industries to respond and create conditions for survival and growth.
Another unexpected disruption in the last few years was the re-emergence of tariffs as a trade policy. These added costs impacted the source of raw materials and components, and businesses had to scramble to secure a new supply or find substitutes for standard components.
The ripple effects of these events triggered massive disruption in global supply chains. Lead times, supplier volumes, and the price of goods were all significantly affected. Businesses were often forced to prioritize and leave some products off their offerings or add new ones quickly.
Innovation due to these disruptions took many forms. Companies substituted making the new materials either temporary or permanent parts of their supply chain. Others created entirely new products and revenue streams to stay in business or grow.
This fast innovation to address disruption was enabled by technology. With Industry 4.0 technologies like IIoT, AI, and machine learning, small companies found a more level playing field due to access to these tools to power agile, quick innovation.
Alongside the forced need to innovate, companies continue to engage in disruptive innovation.
Disruptive innovation occurs when a company targets introducing a new product or service to an established industry. It’s intended to displace older products with more cost-effective and preferable alternatives.
Any size enterprise can utilize disruptive innovation, but it’s an incredibly effective tool for entrepreneurs and new businesses who benefit from ideas but not scale. Smaller companies can compete and even displace larger competitors by tapping into innovation within a product category.
Larger companies often have a strong bias toward stability. Smaller companies and new businesses, unburdened by layers of administrative and siloed department philosophies, can often bring new products to market through strategies like minimum viable product and others.
Smaller players and entrepreneurs can dislodge established products by zeroing on new and disruptive products. They can also use the increase in market share as a launch pad for developing a brand reputation for innovative products.
Resources for Driving Innovation with Disruption
When you’re faced with competing for market share against larger companies, the Henry Bernick Entrepreneurship Centre (HBEC) is here to help with resources, tools, and training.
With academic staff and real-world input from business leaders, we can help you develop business innovation strategies and respond to unexpected disruption with agility.
To find out more about how we can help entrepreneurs and new businesses with their innovation strategies, contact us today.