The strategic management of re‐innovation

Abstract

Abstract Most studies of the management of the technological innovation process cover the range of activities that culminate in the commercial introduction of a new product. In certain sectors of industry, however, especially those characterised by extended product lifecycles, continued competitiveness depends on vigorous and continuous product improvement, i.e. on the process of ‘re‐innovation’ to satisfy evolving user requirements. Ongoing research at SPRU has investigated the process of re‐innovation in a number of industry sectors, and the paper presents material relating to two of the characteristic patterns of re‐innovation identified in this research. The first characteristic pattern is re‐innovation combining the existing with the new. Two brief case studies are presented. In both cases, the manufacturer and customer gained significant benefits from this re‐innovation strategy. For the manufacturer there were reduced development and testing costs, scale and learning curve benefits, distributed inventories of spares and servicing experience. For the customer there were familiarity benefits and reduced entry risks associated with proven reliability of parts and sub‐systems. The second, and more general pattern of re‐innovation is based on the concept of the ‘robust design’. This is a basic design which has sufficient inherent technological slack or flexibility to enable it to evolve into a significant design family of variants. Product design families offer the producer economies of scale in R&D, manufacturing, marketing and sales and servicing. They offer the user learning from experience, the enhanced possibility of user‐inspired modifications, a wider range of price/ performance packages and rapid adaptations to changing environments. Robust designs can effectively combine economies of scale with economies of scope; they are strategically more flexible than leanly configured designs which satisfy only transient user requirements.