By Robert W. Bradford
Note: This article was first published in Compass Points in April 2003. The info is still relevant today, and it will be nostalgic reading the examples from 2003. Part One was an introduction to this series from Bradford’s article The Easy way to Innovate is – the Hard way! In Part Two we discussed the First reason that competitors do not copy innovations: They are unable to copy the innovation. In Part Three we discussed the Second reason that competitors do not copy innovations: They choose not to copy the innovation. In Part Four we will discuss the Third reason that competitors do not copy innovations: they are prevented from copying by someone else.
The third reason why competitors may not copy us is that they are prevented from copying by someone else. Usually, this is a legal situation (as in the case of a technology covered by patents), but it may be driven by other forces as well. While many companies rely on this tactic in support of their strategic dominance, it has one major flaw: the prevention that makes this tactic effective is outside of your control, and may only be temporary in nature. The very best use for this tactic is to give you a head start on the next innovation, since — at some point — it may be possible to get so far ahead of your competition that they effectively give up on the direction you have taken. Some of the more interesting examples of this kind of prevention lie outside of the classic cases, where there is legal protection of intellectual property. These often occur because of pressure — real or imagined — brought to bear by customers of your competitors. For example, you may sell your products through distributors who are adamantly opposed to direct sales by their suppliers. In such a case, an innovator who starts selling directly to customers ends up taking a risk that competing companies are unwilling to take — the risk of cutting off the distribution channel that makes up most of their sales. In this situation, it is the customer who is preventing the copying — but the results are nearly the same as if you had a patent on direct sales.
So, what can we do to take advantage of understanding the difficulties of copying innovations? Simply put, we must throw as many of these obstacles in the way of our competitors as we can. The chart to the right is a basic outline of ways to take advantage of these ideas.
Innovation is a great way to differentiate your company and attain higher than average profitability in your business. Too many companies get on an innovation treadmill by improving their offerings in predictable, copyable ways. With a little care, you can innovate strategically, and truly put your company in a position that yields long-term advantage in the marketplace.
How can your company take advantage of understanding the difficulties of copying innovations? Attend the Simplified Strategic Planning Seminar for more in-depth instruction on this subject as well as all other aspects of Simplified Strategic Planning.
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