Process innovation vs Product innovation


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Much of what is written about innovation focuses on product innovations, especially in the high technology world. While these innovations are often significant, it must be recognized that often a breakthrough or significant product innovation cannot succeed without a process innovation as well. This was true when Haloid/Xerox introduced their first copier, the 914, to a modestly interested in market and then innovated with a finance process that allowed customers to pay per copy.

The Silicon Valley Business Journal, published an article highlighting a similar situation. Angaza Design developed a significant innovation in low-cost, solar-powered LED lamp and phone charger. The problem was that the East African customers who were their target market could not afford to spend $50 thus limiting their market penetration. Their process innovation? They reduced the purchase price to $10 plus a pay as you use the energy it generates. This made the product affordable to 90% of the population instead of just 10%.

Obviously without the product innovation, nothing would have happened, but without the process innovation to go along with it, you would have another product innovation that died.



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