It’s essential to provide strategic guidance to the innovation process, so in this chapter we take a look at six essential forces that are driving the changes that are occurring across much of today’s world. While these may not be the most pressing issues for your company, chances are that some combination of them will have huge influence on your situation, on the strategic choices you make, and thus on your approach to innovation.
Driving force #1: commoditization
In 1992 Wal-Mart passed Sears to become the world’s number one retailer. How did Sears allow this to happen? First, Sears suffered from the arrogant assumption that it was invulnerable, and then its leaders fundamentally misunderstood the key competitive dynamics in the market (which I refer to as the mindset problem), and allowed Wal-Mart to out-innovate them in three critical performance dimensions: cost of goods, cost of distribution, and pricing. In essence, Wal-Mart mastered one of the six critical forces that drive today’s economy, commoditization.
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Author:Langdon Morris
