Sustaining Innovation

Definition

Sustaining innovation refers to improvements made to existing products, services, or processes that enhance their performance or value, typically in ways that current customers expect. These innovations often focus on making incremental changes that better serve existing markets, thus maintaining a company's competitive advantage. Sustaining innovation is crucial for established companies to continue thriving in their sectors and can help them fend off emerging threats from disruptive innovations.

5 Must Know Facts For Your Next Test

1. Sustaining innovations can be categorized as either low-end or high-end improvements, addressing the needs of different customer segments.
2. These innovations do not create new markets but rather enhance the performance of products in established markets.
3. Companies often invest heavily in sustaining innovations to meet evolving customer expectations and remain competitive.
4. The ability to effectively implement sustaining innovations is critical for long-term business success and profitability.
5. Sustaining innovation is often contrasted with disruptive innovation, which targets new customers or market segments with innovative approaches.

Review Questions

• How does sustaining innovation differ from disruptive innovation in terms of market impact and customer focus?
  • Sustaining innovation focuses on enhancing existing products or services to meet the expectations of current customers, typically leading to improvements that maintain a company’s competitive edge. In contrast, disruptive innovation targets new or underserved markets with simpler solutions that may initially underperform compared to established offerings. While sustaining innovations serve to refine and optimize what already exists, disruptive innovations can create entirely new markets and value networks.
• Discuss the importance of sustaining innovation for established companies in maintaining their market position.
  • Sustaining innovation is vital for established companies as it allows them to continually improve their offerings in response to customer needs and preferences. By focusing on refining existing products and services, these companies can solidify their market positions and fend off competition. Failure to invest in sustaining innovations may leave businesses vulnerable to emerging threats from disruptive innovators that can capture market share by providing alternative solutions.
• Evaluate how an organization can balance its resources between sustaining innovation and exploring disruptive opportunities for growth.
  • An organization can balance resources by implementing a dual strategy where it allocates dedicated teams and budgets for both sustaining innovations and disruptive opportunities. This approach allows companies to innovate incrementally while simultaneously exploring radical changes that may open up new markets. Leadership should encourage a culture of experimentation and risk-taking for disruptive initiatives while ensuring core products are continuously improved, creating a sustainable growth framework that capitalizes on both types of innovation.

Related terms

Disruptive Innovation: Disruptive innovation is a process by which a smaller company with fewer resources is able to successfully challenge established businesses, often by offering simpler, more affordable solutions.

Incremental Innovation: Incremental innovation involves small, gradual improvements to existing products or services, rather than creating entirely new offerings.

Market Penetration: Market penetration is a strategy aimed at increasing the market share of an existing product or service within its current market.