Game Changer

CHAPTER 14Innovation: Seizing a Step‐Change Opportunity

With contributions from Camille Brege, David Langkamp, and Ricard Vila

A company can disrupt its industry, reshape demand, and gain a significant advantage over its competitors by launching a new product with an innovative technology or by approaching its market in an innovative way. This game‐changing product or service gives the company immense degrees of freedom to reset their pricing strategy, particularly when the product offers usage value that is far higher than its substitute value or the Next Best Competitive Alternative.

But those degrees of freedom go to waste if the company doesn't recognize them and exercise them in the market.

Breakthrough innovation that disrupts an industry does not always make the headlines, as the story of a company we call Emerald Engineering exemplifies.¹ Most people would not recognize the company name unless they lived close enough to read its factory sign, despite likely having used Emerald's white‐labeled devices. It was barely a household name in the families of its employees. But within Emerald's multibillion‐dollar industry, it had a leading market share and a strong reputation for quality. Its ongoing success and stability had made Emerald look like a well‐oiled machine, but intensifying competitive pressure and slower industry growth had caused the machine to sputter.

That's ...