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Pathways to market leadership thru innovation

All companies know that new product success is vital to the growth and prosperity of the modern corporations.

Obviously, rate of innovation is stated as “very critical” for the future business success as it is rated as a top requirements to increase profitability and growth among most European companies. This rate and requirements is even higher than cost cutting or merges & acquisitions.

According to the Product Development Institute (Best Practices in Product Innovation: What Distinguishes Top Performers), developing and launching with success a steady stream of new products is not as easy as it sounds to be. Indeed, only one product concept out of seven becomes a new product winner; and 44% of businesses’ product development projects fail to achieve their profit targets!

Nevertheless, exceptional performance in product development is no accident at all. It is the result of a disciplined and systematic approach based on best practices, looking at ways to differentiate your product & your firm from others positioning.

So, let’s have a look to the 3 key factors that all these successful new product development are sharing. So called ‘Value disciplines’, they are the main paths to deliver customer value: Product Leadership, Operational Excellence and Customer Intimacy. We will demonstrate how getting the right mix right between these three can propel a business to a leading position within their sector. Then, we will take some proven examples from the semiconductor market.

Definition -

Product Leadership: What your customers are looking for is the best product. Your team and your company culture should be completely dedicated to innovation and quality. In a market usually dominated by me-too competition and “Red Ocean” landscape, you should be very strong in innovation on technologies, services and be highly strong in branding. You should be able to shorten implementation time and bring high performing solutions. You must also be as much as possible aware of what your competitors are doing and make sure you are completely focused on staying one step ahead. Your goal is to capture a greater share of your market, at acceptable price.

Operational Excellence: Operational excellence covers the capability to implement reliable and high quality solutions against a competitive market price. Your customers just want a good product at the lowest possible price.  You should not try to come up with new or better products, you just have to focus on producing more volume at a lower cost.

Customer Intimacy: In high competitive market flooded with products or services like yours, customer intimacy represents the ability to develop high competitiveness thru the understanding of customer specific situation. Your customers want more than a standard product or service; they want customized solutions. So, the mission of your teams is to know as much as possible about your customers’ businesses, problems and habits in order to build successful relationships so you can deliver the correct products, services and/or solutions over time. Your action are focused on best “customized” customer service to build high satisfaction and long term relationship.

 Fig. 1: Value Disciplines trihedral

Innovation is the “combination” of inventive practices for these 3 pillars in order to meet and exceed the market expectations. As a company, you should be able demonstrate excellence for at least one of these 3 pillars.

Once you have selected a primary or secondary pillar, they will be the core of yourvalue proposition. Your value proposition is simply the translation of these key pillars into more specific benefits in your offer providing pains relievers and gains creators to a targeted audience, in a way to fill a need in your market in a unique way.

You may indeed find an unmet need in the market or you may realize that you need to find a better way to differentiate from your competitors that could be to reshape the boundaries of an existing market with a differentiated offer.

As a result, you may decide to promote a different attribute of your product, or you may find entirely new opportunities to create new products and services.  Either way, you’ll strengthen your business in both the short and long term.

Example in Product Leadership

In modern wearable and medical applications, integration and miniaturization is a “must have” for differentiation and brand leadership. Many companies have built a strong brand reputation by focusing their new product launch on product leadership by using their stakeholder’s leading edge products and technologies. For example, Integrated Passive Devices (IPD) have recently been widely used into wearable and wireless module applications as undisputed enablers of strong differentiation and market authority for companies who decided to get rid of their discrete passive circuits surrounding the main IC of their products.

Providing improved performances (more output power), thinner designs and up to 80% board space reduction, Integrated Passive Devices (IPD) also contributes to shorten the time to market and lower engineering expenditure. This technology definitely provides high product supremacy and strong operational excellence to customers introducing this design approach into their applications:  by simplifying the complexity of the design, RF IPD offer shorter time to market, lower engineering cost, on top of improved performances and undisputed integration.

For instance, leading edge medical applications requiring high integration will have no choice than introducing Integrated Passive Devices and ASIP technologies as a “must have” in order to enable the mass production of emerging applications such as smart pills or wireless contact lenses.

Fig. 3: RFID Microchip pills

In above example, the innovation path went thru technology integration (product leadership) and customer intimacy, to access the regulation rules and get the market authorizations.

Price and operational excellence are not the main criteria at first. Technology superiority is. Addressing first innovators and early adopters, it would later on scale to a wider market. By replacing other diagnostics methods for which the cost of ownership and logistics issues may be important, this innovation could rapidly find a skyrocket market traction.

But, more than the product, the main important path to innovation is your business model. Innovation also goes thru the way you are selling the “product”, the channels, the target customers, the service, etc…This is definitely the most important lessons of successful innovations. Sketch your innovation with the lean canvas is most probably the first job you have to do before drilling each box of the canvas. These boxes are in fact the pillars of the Value Disciplines trihedral. In other words, product leadership should not be addressed only through the bias of technology, but mainly thru the bias of business model. Look at AirB&B, BlaBlaCar, Uber, Zalendo…these are true examples!


 So, successful innovation, is the combination of product leadership, customer intimacy and operational excellence with always one or two of these value disciplines to be the strongest of the company as guidelines of its strategy and value proposition. It will be also the foundation of its branding strategy. 

In this article, I tried to demonstrate, also thru an example that innovation does not only means having the best technology, but the most important is the way you deliver your value proposition. So, it is also a matter of means and execution.

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