Business is about moving forward. It’s about developing a continuously improving business. I don’t think I need to go on about this. Hopefully we all get this now. You can’t just sit back, serve your customers and count your takings. You need to understand the market, see what your competition are doing, listen to what your customers want, anticipate where things are going and make changes to your business so that your offering is still relevant. Actually not just relevant but exciting and enticing!
There are primarily two ways of doing this, either through imitation or innovation. Standing still isn’t an option, so to move forward you can either take the best of what is out there or try to innovate and come up with something truly original, truly new.
Both of these approaches require you to understand the market, your competitors and your customers. Imitation stops here though and looks to take the best on offer and consolidate that into an offering that fits with the businesses customer mix. Imitation is relatively easy and fast, imitation is cheaper because you know what you’re going to try can be done. The implementation risk is smaller, however the market execution risk is higher.
There are many examples of Innovators and Imitators. The following two examples show the difference in sales an innovator enjoys. Firstly look at the Apple iPod and Microsoft’s Zune. The Zune by all accounts is a perfectly acceptable piece of hardware but sales have never taken off. Since launch Apple had sold 170m iPods by the end of 2008, Microsoft in comparison had sold 3m.
The other example is the way Nintendo have innovated against Playstation and Xbox with the Wii. Instead of competing on hardware specs they did something different and developed a whole new gaming experience and in the process captured the largest share in this competitive market. While Xbox and Playstation battle it out by being very simple, Wii has extended there sales by being different. In 2008 sales were Wii 10.2m units, Xbox 4.7m units and PS3 3.5m units.
There are regional imitation examples, look at Redbull and in many markets you will find local imitators, V for instance in New Zealand. Another local beverage example can be found in the competitive beer market. Lion Nathan has had a huge success with Steinlager Pure and has reinvigorating a stagnant brand. But with this success comes imitators, Independent Liquors “NZ Pure” taking things a little too far perhaps - clearly copying not only Steinlager but also dropping a Heineken star reference into their design too.
Innovation clearly requires more effort. Once you have looked at the best that the market is offering you need to stop and sit back. You need time to think and play with your business and your products or services. You need to think about what would make your customers lives easier, better, faster, cheaper. What is really important to them. This process take some time but it’s surprising what you can do relatively quickly and for relatively little investment.
What you do need however is a commitment to make that investment in time. To stop and challenge the team to do something better. You can’t do innovation alone, it’s better to do it with a small team to bounce ideas around, stretch yourselves and be creative. A number of businesses have innovation processes that allow their teams to work on whatever they think will add value to the organisation. Google has 20% time - a full day a week you can devote to a project that will make google better. WL Gore, the manufacturers of GoreTex have a similar programme. You can read a great case study of their innovation culture in fastcompany
Imitation can be a valid strategy in some circumstance. Perhaps if you’re looking to just be a regional competitor. You might be operating in a small country or small town, in this situation imitating and taking the best of Brand X or Brand Y to remain current and competitive is a valid strategy. That is until an innovator comes to operate in your market and then you’ll be a step behind and in trouble.
The point I’m making is you have a choice, we all need to choose how we move forward. Do we imitate or innovate. This is a choice for settling for the status quo or striving for greatness. One path will lead to survival the other path could revolutionise your business.