Most
companies focus on matching and beating their rivals. As a result,
their actions tend to take on similar tactics.
What ensues is
head-to-head competition based largely on incremental improvements in
cost, quality, or both.
The more competition within the same space the faster prices fall and what may have been an innovative value proposition of the past becomes a commodity of the future..
Innovation breaks free from the existing mindsets creating fundamentally new market space-that is, by creating products or services to fill unfulfilled needs.
The path of innovation requires a different mind-set and a systemic way of looking for opportunities. Instead of looking within the conventional boundaries that define how an industry uses value, business leaders should look at what new value could be created. By so doing, they can find new market opportunities on the fringes of changing market dynamics.
A Business Week article in Dec. of last year stated: What's up for 2008? Keep an eye on the business schools. Companies are demanding that their managers be more creative and less obsessed with cost and efficiency. The last revolution within executive education was the introduction of Management Science in the 1950s. Will we see the spread of IMâ€"Innovation Managementâ€"in "exec ed"?
And the Big Idea for 2008? Stop competing against your competitors. Your traditional rivals aren't your biggest worry. Disruptive innovation is hitting corporations from outside their business. Verizon (VZ) was forced to open its cell-phone service because Apple (AAPL) and Google (GOOG) smacked it hard. Verizon's new business model will probably generate 10 times the demand for service. You just never know. That's life, in beta.
Is The Social Web Fueling Innovation and Creation of Markets?
In the early stages of the social web we've seen entirely new markets created and flourishing. EBay, Skype and PayPal are a few examples of how new markets were created simply by enabling people to connect to people, converse and create social commerce. The mobile web has also fueled new markets supported by both BIG and mostly small application developers whose products are being mass consumed by users.
The social web has created new markets in the form of application developers designing and selling niche offerings throughout social networks although most are still supported by advertising revenue. The traditional print and Television advertising market has shifted to online markets self created by the migration of more and more people to the web as the primary basis of information and communications. Book publishing has shifted to on line markets created by user centric technology. You Tube gets more views than traditional television and a growing audience. Need more?
So What and Were will the Next Market Creation Be?
Many think in terms of economics when the term "market creation" is used. However before economics can be created there must be a new method of exchange that eventually creates transactions that facilitate economic value (Think of Fed Ex, IPod, ITunes etc.)
Once a new method of exchange is introduced then market makers can take advantage of the new exchange and create economic gain by introducing further value to the method. An example, IPhone created an innovative user interface to the mobile experience which improved the exchange experience. Competitors have followed or tried to copy but the end result is the creation of a new way to exchange conversations, commerce and relationship dynamics within the mobile web. What new markets will follow form?
The social web is adding a significant amount of social exchange in all forms and shapes. These exchanges are the foundations of new markets yet to take shape. Those businesses that look at the value increase in the exchange mechanism and the driving influence of relationships that use these new forms of exchange will indeed create new markets unforeseen, unpredictable and yet knowable. However, the speed at which these new markets will form and rise quickly could be as fast as you can click your mouse or touch an image on your mobile device.
What say you?