Introducing a new product/service which customers are not yet familiar with, either by pioneering a novel technology or changing the quality of an existing good, could ensure a business a high market share. This is because it is considered an early mover. Companies that employ this strategy are also able to charge high prices in the short term for their products and services, as they recover their capital investment before competitors enter the market.
Organizational restructuring often involves an improvement in internal processes. Changing the way things are done within an organization, could bring about dramatic reductions in costs. New ideas in this form, could involve an elimination of non-value adding activities and improving the efficiency of value-adding activities. The same thinking could be extended to service delivery, where companies can improve their customer interaction and satisfaction by remodeling the channels through which their products reach the end-user. In recent times, many organizations are interacting directly with customers using corporate websites and smart phone applications to sell products, gauge customer satisfaction and promote new products.
Customer value is assumed to increase when a product does what it says it will at prices consumers perceive to be a bargain. The innovative business strategy concerns itself with producing goods that meet identified customer needs, at estimated market prices. Most organizations that pay attention to customer value enjoy the loyalty of satisfied customers making repeat purchases. This often ensures capacity utilization, higher productivity, increased market share and profit maximization.
Improving or replacing existing processes or products could have a positive effect on the level of efficiency attained by an organization and the quality of its end product. An efficient production system usually implies that, there is a drastic reduction in wastes and raw materials used. If a new idea improves the quality of products or services an organization offers, it can opt to differentiate its products, thereby creating a niche market from which it could earn abnormally high profits.
Most organizations can innovate; new ideas can always be employed in majority of companies to improve processes, products and services. There has also been a development of specialist firms that are able to provide professional advice, on how to utilize innovative techniques to achieve super profits. These firms could provide long term solutions for companies that need to continually innovate to survive.
Using business innovation to earn super profits could involve any or a combination of organizational restructuring, introduction of a new or improved product/service, paying attention to customer value and changing the way things are done within an organization to achieve higher levels of efficiency and quality. It is advisable for organizations to seek professional advice when employing innovation as a strategy.