How to Drive Product Innovation with Lean Methods

Introduction 

Production innovation is defined as “the development and market introduction of a new, redesigned or substantially improved good or service” (Im, Montoya, & Workman, 2012). As such, in the definition, four key elements stand out which explain what product innovation entails. Innovation in the first case is said to be a modified version of an existing product range. This means that a firm or a company has invested in improving key attributes of a product in a quest to make a product more competitive. The next thing entails the creation of a new model within the existing product range. This new model may be the subject of intensive research and design within a company (Lundvall & Christensen, 2009). The new model, therefore, thrives on the prevailing product range that the company has invested in. The third definition of product innovation centers on the creation of a new product outside the existing range but in a related field of technology. As one moves through the above options so does the degree of risk-taking and innovative effort. This is not to say that “developing new products is better than incremental improvement; that would depend on the business circumstances of a particular firm” (Angelmar, 1990). However, it pinpoints the increasing degree of commitment. 

Background 

From a competitive viewpoint, product innovation is deemed a viable tool for attaining competitive advantage. This, in many cases, is coupled with price reductions on existing products, the development of new customer services, and new communication and distribution programs” (Nelson Villaverde Chavez, 2015). The competitive advantage is observed on the magnitude and speed of market acceptance. However, product innovation is sustained in the long run through a large yet stabilized market share which the specific product can maintain against other competitors’ products. 

Notable product innovations often avail the basis for new firms or businesses. For example, Apple built an entity around consumer electronics and software. However, through the smartphone product dubbed iPhone, the company has managed to dominate the smartphone market globally. The iPhone is said to be a brainchild of Apple’s founder Steve Jobs. Launched on June 29th, 2007, the iPhone brand has grown remarkably over the years with continued improvements and technological advancements. The product was forged through the combination of a “widescreen iPod with touch controls, a revolutionary mobile phone, and a breakthrough internet communications device” (Nielson, 2018). The desire to emerge as a novel electronics company in the competitive world saw the company plunge into the smartphone market which has revolutionized communication. By accepting that internet is a core epicenter of communication, Apple through iPhone has captured the importance of interaction for its many users. 

As aforementioned, innovation lays emphasis on improving existing products or the developing of a substantially improved product (Kaiser, 2002). This was captured in the development of the iPhone by Jobs who was concerned with the struggle of many Apple device users. Music lovers, in his thinking, would be forced to carry two devices; a mobile phone and an iPod. With the advancement of the mobile phones, many other products such as digital cameras had started to bear the brunt of the production of mobile phones with inbuilt cameras. Apple was determined not to allow such fate to befall its primary selling product in the early 2000’s- the iPod (Nielson, 2018). It is this thinking that brought about the development of the iPhone that had the iPod attributes as well as the mobile phone. The success of this innovation was fueled by consistent customer interaction. Apple had an elaborate platform globally that netted views from many of its enthusiastic consumers. It is through such engagements that companies can easily capture adequate reviews and shortcomings of their innovation’s prototypes. It is prudent for entities to invest in research and development which is responsive to the market. This helps in the creation of viable products that are profitable and sustainable within the market in the long run. 

Product Development 

Product development is an integral part of the product innovation and product lifecycle. In many cases, new products are created with the sole purpose of replacing redundant ones in the market (Zhang & Duan, 2010). When introducing a new product into the market three steps must be factored in. These are market research, product development and testing, and feasibility study. Market research entails the gathering of data or information from the market for the sole purpose of understanding the present preferences and tastes of the consumer market. It is also used with the intent of filling gaps within the business world. The market research has to be both primary and secondary. The primary market research is raw and incorporates a number of sampling methods. The secondary market research focuses on the utilization of already gathered data by other companies such as marketing research companies, magazines, journals et cetera. As noted, Apple focused on the market research in order to understand the essence of a multipurpose smartphone that can bring convenience to an end-user. 

Product development and testing are critical to the innovation process. This is because the company or firm must ensure that its innovation functions as expected. In many cases, companies can quickly make a prototype which can be introduced into the market for testing (Tsai, 2009). A selected sample of consumers can be allowed to use this prototype with the intent of experimentation and evaluating the product that it meets the expected standards. The reviews by a diverse consumer base can make the company incorporate necessary adjustments into the product. This is critical for the sustainability of the innovation in a diversified market (Tsai, 2009). For product innovation to thrive there must be concerted efforts focused on experimentation and intense monitoring. This demands that company’s look into possible technologies that may make future versions of the product much useful or even marketable. Apple’s research team in the early 2000’s had started working on touchscreens which were eventually embraced by the smartphone market. The innovation was subject to experimentation and testing in the market (Dorhmel, 2017). The experimentation is a process of product development which ought not to be taken lightly by any entity keen on transforming its target market. The experimentation should be backed by the critical market survey and a number of pilot studies to ensure that a product churned out eventually is what the market needs. 

A feasibility study is an integral element in product development and innovation. This entails the focus on financial and legal restrictions which may face the launch of the new product on the market. It is at this phase that the company is forced to focus on pricing, sales focus, overall profitability and production estimates (Reinders, Brezet, & Diehl, 2014). These concerns must be addressed beforehand as they will reduce the risk involved with the innovation. Apple understood this effectively when it wanted to launch the iPhone. Initially, the company had intimated partnering with Motorola with the intent of creating a smartphone that mirrored iPhone. Dubbed ROKR, the smartphone failed to hit its expected sales mark. However, a thorough feasibility study and a new partnership with AT&T, Apple was able to enjoy substantial revenues that were the foundation of its success story in the smartphone industry (Dorhmel, 2017). It is at the feasibility study that many companies fail to understand the legal aspects associated with intellectual property rights (IPR). Many companies have faced legal wrangles with their developers over the rights of various innovations. 

Product Innovation Advantages 

Many entities prefer the redesigning of existing products due to its low-costs. The refurbishment of existing products only delves on boosting the utility and competitiveness of a product. The redesigning may also be informed by the shift in organizational objectives or technological infrastructure. The iPhone has evolved over the years with different models. This was fueled by the economies of globalization, technology, and competition. Additionally, the company has focused on embracing consumer familiarity. This means churning out of products that can fit into the lifestyles of the target markets. It is noted that “consumer familiarity with products is positively correlated with financial performance and market share” (Angelmar, 1990). Some studies on Apple have appreciated the company’s ability to create an iPhone loyalty across the world with every launch being characterized by global selling spree. This is because iPhone users continue to yearn for more improvements an already familiar brand which is the iPhone. 

The process of innovation where products are redesigned, improved or refurbished is advantageous in many respects. This is because there is more clarity on the direction of a company and its innovation is taking. Buoyed by the confidence of its previous variants, an innovation can thrive in an existing market effectively. This model also enjoys lower risks and uncertainty. Case in point, Apple faced utmost risks when producing iPhone for the first time. The company was faced with much skepticism from possible partners who did not adequately capture the idea behind the innovation. However, by introducing a new model over the years, the brand has grown to an extent it can absorb any market shocks effectively. 

Conclusion 

Product innovation is critical for any entity that seeks to be competitive and economically viable in the long run. The innovations are also vital to ensuring that companies are in touch with market reality. Therefore, they must be backed by market research, product development and testing, and feasibility studies. All these factors go a long way in fueling viable innovations. Apple through its iPhone brand has managed to capitalize on the advantages accrued to smart innovation. The iPhone brand has grown over the years and has continued to do so due to its broad loyal consumer base. Its product innovation model provides the perfect blueprint for many companies particularly those in the technological field. 

References 

Angelmar, R. (1990). Product innovation: A tool for competitive advantage.  European Journal of Operational Research ,  47 (2), 182-189. doi:10.1016/0377-2217(90)90277-i 

Dorhmel, J. (2017, June 30). Relive 10 years of amazing iPhone innovation | Cult of Mac. Retrieved from https://www.cultofmac.com/461109/today-in-apple-history-celebrate-10-years-of-iphone-goodness/ 

Im, S., Montoya, M. M., & Workman, J. P. (2012). Antecedents and Consequences of Creativity in Product Innovation Teams.  Journal of Product Innovation Management ,  30 (1), 170-185. doi:10.1111/j.1540-5885.2012.00887.x 

Kaiser, U. (2002). Product Innovation and Product Innovation Marketing: Theory and Microeconomic Evidence.  SSRN Electronic Journal . doi:10.2139/ssrn.310404 

Lundvall, B.-A, & Christensen, J. L. (2009).  Product innovation, interactive learning and economic performance . Emerald Group Pub. 

Nelson Villaverde Chavez, F. (2015). Innovation in the Enterprise: Market Orientation as an Important Factor towards Product Innovation.  The International Journal of Management Science and Business Administration ,  1 (11), 21-33. doi:10.18775/ijmsba.1849-5664-5419.2014.111.1003 

Nielson, J. (2018, January 8). 10 Innovation Lessons From Steve Jobs And Apple: Story of the iPhone [And The Theory of Integrative Innovation] - The Innovative Manager. Retrieved from https://www.theinnovativemanager.com/innovation-lessons-steve-jobs-apple-story-iphone/ 

Reinders, A. H., Brezet, H., & Diehl, J. C. (2014).  The power of design: Product innovation in sustainable energy technologies . Hoboken, NJ: Wiley. 

Tsai, K. (2009). Collaborative networks and product innovation performance: Toward a contingency perspective.  Research Policy ,  38 (5), 765-778. doi:10.1016/j.respol.2008.12.012 

Zhang, J., & Duan, Y. (2010). Empirical study on the impact of market orientation and innovation orientation on new product performance of Chinese manufacturers.  Nankai Business Review International ,  1 (2), 214-231. doi:10.1108/20408741011052609