Product Innovation – Gaps, Challenges and the Competitive Advantage

The moniker product innovation is regularly used in the business realm but a lot of people don’t know what it means. It is quite often confused with innovation, well, it is broader than that.

In a nutshell, product innovation refers to the development or improvement of products in a way that tries to solve problems for consumers, customers, companies or society at large.

This means that it is not about just developing a new product, a business can improve the quality of pre-existing products and call it product innovation.

In the second episode of All Things Tech, All Things Business, Echo Kenya indulges you on the technicalities of product innovation, what it means, the competitive advantage, and how it can be used to solve customer problems.

The episode is especially ideal for entrepreneurs and companies looking to scale and appeal to more customers. Its timeliness is unmatched considering the millions and millions of products rolled out to the market every year.

Why is product innovation important for companies? 

Time and again, innovation has proved to be the main economic driver for industries. In regards to product innovation, a survey by McKinsey suggests that 25 percent of the total revenue profits of a company come from the launch of new products.

Having a portfolio of good products is what drives growth and brings more profit. What’s interesting is that products are easy to scale, with a little research, companies can differentiate their products to match the contemporary needs of the modern consumer.

There are many resources out there that be put together to form a product, particularly in the tech industry. 

According to Comark Onani, Co-Founder, CTO-Scale Kenya, product innovation is an ever-changing process – one that involves testing one tool and determining if it fits the consumer. 

“If it doesn’t, you try a better tool. In between this combination, you will strike one that will basically be your product,” says Comark.

Comark’s idea is simply what product innovation is – a process to finding a solution to a problem. A successful product innovation entails carrying out market research (gathering information about people’s needs and wants), then developing a concept.

The next step is developing the product based on the concept and testing it. Determine the flaws before launching it. This will provide you with the ground reality of the product while opening up room to a more competitive idea.

The final two stages involve assessing the market gain and refining the product for launch. This is where you do final research of the market to fathom whether the requirements are still the same or have changed. This is where you pick your target customers and find the most profitable way to launch.

The Competitive Advantage

The gap in product innovation mainly arises from the knowledge. Successful companies have always exploited the lacking knowledge to gain a competitive advantage. Any business looking to get ahead of its peers must:

• Develop a new product that answers the needs and wants of their consumers or creates new demand for them.
• Consistently improve on their core products and make incremental innovation.
• Redefine the competition by taking existing products to new channels or markets.

These three key goals can bring a long-term revenue stream for a company, but if done correctly. The trick is to find an equilibrium to the approach: new products, improvements, and targeting new markets. Focusing only on one of them is a mistake we see even in big companies.

A good case example is Apple. This giant smartphone maker has maintained its competitive advantage since 2007. Since its inception, apple iterated on its innovati