To uncover innovation opportunities in business we can start from two main approaches.
External focus to uncover opportunities from Macro Trends and unserved customer needs, or an Internal focus approach to maximise existing resource and business offerings.
Uncover Innovation Opportunities
UNCOVER is the first step in the USER innovation process used by iSWATs.
Each External or Internal approach has its Pros and Cons and involves different tools & resources.
External Focus – Macro Trends and Customer Needs
Pros:
- This approach aligns with external customer needs and market demands, enhancing the likelihood of achieving a product-market fit.
- It allows for the identification of unmet needs or gaps in the market, potentially leading to unique and innovative solutions.
Cons:
- It necessitates a significant investment in market research and customer insights.
- There is a risk of becoming too focused on current & short-term market trends, thereby missing opportunities for disruptive innovation.
Uncover Innovation Opportunities Successful Cases:
A noteworthy example is Tesla Inc. Recognising the growing global concern about climate change and the shift towards renewable energy, Tesla heavily invested in research and development, seizing the opportunity to innovate in the electric vehicle market. Their high-performance electric cars, such as the Model S and Model 3, have not only met the unaddressed needs of consumers seeking sustainable transportation options but have also revolutionised the automotive industry.
Unsuccessful Cases:
On the other hand, failures usually occur when companies become too focused on current market trends, missing out on opportunities for disruptive innovation. Kodak is an example of this. Despite being a pioneer in digital photography, the company failed to recognise the disruptive potential of digital cameras and continued to focus on its film business.
Internal Focus – Existing Business Resource and Offerings
Pros:
- Leverages existing resources, capabilities, and expertise, potentially leading to more feasible and sustainable innovation.
- Allows for the identification of underutilised assets within the business that could be leveraged for growth.
Cons:
- There is a risk of becoming too inward-focused and missing out on changes and opportunities in the external market.
- Innovations may not align with customer needs if the focus is purely on internal capabilities.
Uncover Innovation Opportunities Successful Cases:
This approach is often successful in companies with strong internal capabilities and resources that can be leveraged for innovation. For instance, Amazon was able to leverage its robust e-commerce platform to expand into new areas like cloud services (AWS) and content streaming (Amazon Prime).
Unsuccessful Cases:
However, failures can occur when this approach is taken too far, leading to a company becoming too inward-focused and missing out on external market opportunities. Blackberry is a classic example of this. Despite having strong capabilities in secure email services, the company failed to recognise the shift in consumer preferences towards smartphones with a broader range of applications.
Strategic Choices considering Business Context
The choice between an External focused approach and an Internal focus approach depends on several factors, including the company’s development stage, business positioning, leadership vision, and company culture.
Companies must carefully consider their own unique circumstances, strengths, and weaknesses when deciding on their innovation strategy.
Uncover Innovation Opportunity Research & Strategy Development Steps
- Identifying the Scope: Define what factors will be included in the research and establish the parameters.
- Data Collection: Use the tools mentioned to gather data on the identified factors.
- Data Analysis: Analyse the collected data to identify trends, opportunities, and threats.
- Interpretation: Draw conclusions from the analysis about how these factors could influence the business or innovation opportunities.
- Strategy Development: Use the insights gained to inform business strategy and decision-making.
Next, we will introduce a range of different tools and resource to help you conduct these analysis to successfully uncover growth opportunities.
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