Principles of TRADITIONAL INNOVATION
Let us remember that the current one (of the Incumbents) is not the original concept of the Market: indeed
the Disruption is bringing the Market
towards its original dimension.
That is, the current Market is a “distortion” of the original Market. The Market that was observed by Adam Smith, who was based on the Law of Supply and Demand (Business thrived with satisfaction of real people’s needs). A Market that was born with the human being, and still in force a few decades ago.
Substantially the Market in decline, whose substantial novelty is to have been taken over by the “Financial Capitalism”, is based on a transgression of the laws of S&D (that is, it stopped following the needs of the Customers to create artificial needs, based on a emotional level).
And we emphasize that the Disruption is developing spontaneously in the Market precisely because of the problems created by the “revolution” operated some decades ago by the outgoing Market (in a sense the current radical change is a counter-revolution compared to that practiced in the past from the outgoing Market).
<see ‘Towards a solution: the recovery of the Supply and Demand principle’>
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The problem for Incumbents is that
the Principles of the current Market (in decline),
if they allowed them to prosper for several decades,
now in a Market Disruption phase,
BECOME STRONG LIMITS FOR THEIR BUSINESS.
The problem is compounded by the fact that the current big Companies of the Market have been formed with a mindset and structures that now prevent them from changing to adapt to the incoming Market. <see The Company Immune System: why the big Companies cannot develop real innovation >
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Among the Companies that develop “traditional” strategies it is easier for followers to arrive at success based on low-cost strategies (a feature which, in itself, is not at all disruptive), but they do not attempt to develop a Disrutpive innovation: in that way them manage to circumvent the problem of the extremely reduced spending of the Customers (due to the Economic Crisis).
Disconunt Supermarkets and Ryanair belong to this category. Or, in general, “Chinese” products.
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Recalling that the purpose of this article is to identify the characteristics of the two Business modes, that of the declining Market (Sustaining innovation) and that of the new Market of Disrutpive innovation, here below are identified some keypoints.
See the summary table of the keypoints of the two different forms of innovation, with which it is possible to assess which forms of innovation are present in each Business Comparative table of Keypoints of Disrtuptive at Sustaining Innovation Comparative table of Keypoints of Disrtuptive ad Sustaining Innovation
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In this case – that of Sustaingng Innovation – the Keypoints of Market strategies are substantially “tricks” with which the Big Business players have been able to circumvent so far a fundamental rule of the Market: the Law of Supply and Demand. These are expedient based on psychological strategies aimed at inducing behavior in the Customers; “non-proper-correct” moves towards competition (from the point of view of the dominant ethics); and agreements with the Government (to obtain laws in their favor), etc.
We also remember that the basic problem of the Incumbents is that these Rules come into conflict with the request of the new Demand (of Disrutpive innovation), and therefore irremediably lead to the failure of the strategies based on them.
This is because the new Demand that cannot be circumvented by any “expedient” (this for many reasons, the most important of which is that the current crisis has enabled the Customers to no longer be able to spend on buying products – “designed in abstract” by Marketer – who are absolutely unable to meet their real problems – and who have too high purchase and operating costs).
For customers, the negative qualities of this type of strategy are, for example,
1. Over-developing of products (and therefore high costs) <see The Over-serving/Under-serving problem of the Incumbents>
2. Planned obsolescence, which requires the Customer to change products after a few years because they can no longer be used. <see Beyond the Planned obsolescence, towards a long/endless durability>
