Is it better to be the market leader, innovating to stay ahead of competitors — and perhaps even the marketplace itself? Or, are those companies with follower strategies in a stronger position for success when the risk of an innovative new product or service introduction is largely borne by the leaders?
A recent business book review in TIME Magazine highlights two authors’ separate answers to this question and got me thinking about our own clients’ approaches. (Read the full TIME Magazine article.)
While I’ve never asked this question outright, in looking at our clients’ product and service portfolios, it appears that many employ a combination of innovation and imitation, and are successful, in part, because of such a strategy.
Sometimes, this innovation comes in the form of a truly “game changing” offering. Businesses with a disciplined approach to creating a new experience for their customers or answering a problem in a wholly unique way can enjoy real distinction in their marketplace — translating not only into a sound leadership position but better bottom lines.
Other times, companies introducing follow-up products and services have an opportunity to improve upon the innovator’s offering. While first-to-market is an enviable position, leveraging insights from a market leader’s success — or failure — can also deliver benefits within an existing marketplace or adjacent ones.
And, of course, there are often “me-too” products and services in a business’ portfolio that are offered to provide customers one stop to meet their needs. These “me-too” products, however, don’t dominate the offering for those companies who understand how important differentiation can be to long-term business success.
So, to innovate or imitate? The answer may lie in a balance of both for your business, too.