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INNOVATION STRATEGIES FOR CREATING COMPETITIVE ADVANTAGE
Twelve innovation strategies permit catalyzing open innovation processes so that innovation moves out of the confines of R&D labs and becomes integral to the way companies design their futures.

B. Bowonder, Anirudha Dambal, Shambhu Kumar, and Abhay Shirodkar
OVERVIEW: Innovation strategy helps a company in three ways: exciting itscustomers, outperforming competitors, and building a new product portfolio. The literature describes many frameworks for innovation strategy but offers little detail about how to implement them. This paper identifies 12 ways of visualizing innovation strategies: platform offering, co-creation, cycle time reduction, brand value enhancement, technology leveraging, future-proofing, lean development,partnering, innovation mutation, creative destruction, market segmentation, and acquisition. These strategies allow 100 leading global companies to dominate their markets and outperform the competition through innovation. KEY CONCEPTS: innovation strategy, customer excitement, competitive leadership, portfolio enrichment.

Enormous strategic opportunities are emerging as we stand at the intersection ofincreasing globalization, rapid technology changes and newer lifestyles (1). Innovation has become the major differentiator in the competitive race (2) and innovative companies have learned to sustain themselves over long periods of time. Companies like Bayer, GE, IBM, P&G, Siemens, and Unilever, as well as newer companies such as Apple, Google, Intel, Microsoft, and Nokia have also mastered themantra of sustained growth and rewritten the rules of the game through a series of innovation strategies (3). The literature identifies a number of strategy frameworks that successful companies have used to create innovative business models, products and services and use them to create competitive advantage. These include:

B. Bowonder was, at the time of his death on December 8, 2009, the Deanat Tata Management Training Centre, Pune, India. Prior to this he was ITC Chair Professor of Strategic Management of Technology at the Administrative Staff College of India at Hyderabad. He was a member of the editorial board of the Elsevier journal Technovation and held a Ph.D in engineering from the Indian Institute of Science, Bangalore. bowonder@tata.com Anirudha Dambal is a management traineeat Tata Management Training Centre, Pune. anirudha.dambal@gmail.com Shambhu Kumar is a research associate at Tata Management Training Centre, Pune. shambhu@tata.com Abhay Shirodkar is a management trainee at Tata Management Training Centre, Pune. abhay.shirodkar@gmail.com
May—June 2010
0895-6308/10/$5.00 © 2010 Industrial Research Institute, Inc.

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Marketleadership (4) Fast cycle time (5) First-mover advantage (6 ) Customer experience management (7 ) Business model innovation (8) Co-creation (9) Disruptive innovation (10) Value chain analysis (11) Blue Ocean strategy (12) Life cycle approach (13) Open Innovation (14) Bottom of the pyramid (15)

The literature shows that strategies of innovation help a company in three ways (16 ):

Table 1.—Companiesin the Study 3M Airbus BMW Bayer Boeing BP BSF Canon Colgate Corning Daimler Dell Disney Dow DuPont eBay Eli Lilly FedEx GE Genencor Genentech Genzyme Google Henkel Honda HP IBM IDEO IKEA Intel Kellogg McDonald’s Mitsubishi Motorola Nike Nokia NTT DoCoMo Philips Procter & Gamble Raytheon Research in Motion SAP Shell Unilever Siemens Southwest Airlines Tetra Pak Toyota UPS Volvo Whirlpool and more.• • •

Providing new offerings or experiences that excite the customer. Staying ahead of the competition in the marketplace. Entering into new market segments or creating new businesses. The presence of so many different frameworks for strategic innovation can be confusing, and it would help if we could distill some basic guidelines from all of these approaches. This paper aims to develop...