Capacity for Innovations

Capsule: The Company would eliminate innovations that are likely to be copied quickly or that have an unattractive economic outlook. It then would implement the remaining innovations in the order of their greatest impact on the volume and profitability of the Company. The Company would innovate all of the innovations that it has the capital and human resources to undertake during the planning period.

The Company would eliminate any innovation that is likely to be copied by competition before the Company reaches an economic breakeven point. The exception to this rule would be an innovation that the Company needs in order to correct an important shortcoming or that is likely to be introduced in the near term by other competitors in the marketplace. The Company may wish to proceed with these innovations in order to prevent a "failure" and the accompanying negative volatility volume loss to competition.

The Company may be facing a limitation on its capacity to pursue even those innovations that have survived the test of economic value. The Company may be limited in its capital resources or in its ability to execute a number of innovations at one time. (See Symptom: "Competitors are Aiming Their Marketing at Narrower Segments.") In this final step of setting priorities for its innovations, it considers its capacity to innovate.

Capacity for Innovations Questions

  • In what order are the potential innovations likely to have the greatest impact on the sales volume and profitability of the Company?

  • Does the Company have the capacity, in capital and human resources, to pursue all of its potential innovations at this time?

  • If the Company is limited in its resources, which innovations will the Company pursue in this planning period and which will it defer into the future?

Basic Strategy Guide Users Go To: Step 19

Summary Points Next: Improve Products and Services

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This section creates and prioritizes ideas for product and service innovation. Your next step is to turn to the Diagnose Pricing section to begin developing new pricing tactics for your target customer segments.