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.

Mitch

Republished with author's permission from original post.

Mitchell Goozé
Mitchell Goozé is the president and founder of Customer Manufacturing Group. His broad scope of business experience ranges from operations management in established firms, to start-up and turn-around situations and mergers. A seasoned general manager, he has headed divisions of large corporations and been CEO of independent firms, always focusing the company strategy on the most important person in business . . . the customer.

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