Chapter 8
Innovation
The intention behind the innovation strategy is to ‘jump’ the system to a higher perceived use value ($PUV)/price position through the creation of novel product solutions. Product innovations can have a dramatic effect on the market in a relatively short time period, although producing innovations usually requires a long period of research and development activity, change to production systems, productising scientific breakthroughs, acquiring patents, etc.
For the innovation strategy to be successful, the firm would typically need to be able to charge premium prices, to recoup the additional R&D costs. This would work where there is a segment of demand that is willing to pay to get the unique benefits conferred by the ...
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