Incremental & Discontinuous Innovation Models
Destiny Mckoy
Southern New Hampshire University
Rourk
MBA 580
04/27/2024
AXP Internal Dec 6, 2024 1
Potential Risks and Benefits: Overview
• Incremental innovation is more often associated with minor improvements
• The corporation employing this type of innovation gradually modifies its products in subtle ways.
• A company's internal operations and productivity can be significantly impacted over time by incremental
innovation.
• In discontinuous innovation, products are presented to customers that necessitate a shift in their present
behavioral pattern.
• The corporation chooses to introduce a new product in the market.
AXP Internal Dec 6, 2024 2
Potential Risks and Benefits: Incremental Option
Increasing sales and earnings for current goods and services incrementally
A gradual approach produces necessary software more quickly.
The approach is more adaptable than discontinuous
Because it just requires small changes to an already-existing product or service, testing is simpler.
Feedback from customers can help quality steadily improve.
Nevertheless, the process is extremely intricate.
Incremental innovation develops and safeguards business models
AXP Internal Dec 6, 2024 3
Potential Risks and Benefits:
Discontinuous Innovation
Customers might not embrace or accept the new, drastically altered
product or service right away, which is a risk.
The current market is likely to be disrupted by the method.
It also upends the established business models and conventions in
the industry.
On the other hand, it can propel a business to the top of its industry.
It draws in new consumers for the novel product, potentially yielding
enormous financial gains.
Internal opposition from staff members who could be used to the
current procedures or technology
AXP Internal Dec 6, 2024 4
Competitor’s Products and Services
The primary competitors of the organization are BMW, VW, and
Toyota.
BMW is progressively raising its sales by a large amount.
At 4% of the market, BMW now holds a respectable market share.
By December 2023, BMW will have generated significant revenue of
Euro 1,55,498 million.
BMW to be among most valuable firms in the world as a result.
Conversely, Toyota holds an 8% market share value.
In the most recent period, VW's net profit was $4.0 billion.
AXP Internal Dec 6, 2024 5
Competitor’s Products and Services
VW makes more money than our business does.
Our company's net income is 0.5, far less than that of Toyota, BMW,
and VW.
Compared to other rival organizations, my organization has fewer
computers and sensors.
Additionally, my company's cooperation is not like that of the rival
businesses.
Our company must keep an eye on competitors to ensure it
maintains its competitive edge.
AXP Internal Dec 6, 2024 6
Competitor’s Products and Services
Comparative data demonstrates the fiscal improvement over time.
The organization's competitors are expanding their operations to new locations
globally.
The projected growth by 2030 for each of my rivals is substantial.
These enhancements have the potential to strengthen and bolster their financial
foundation.
BMW have managed to coordinate its growth and competitive strategies with the
impacts of the outside variables.
Strategic prioritizing of supplier strength and competitive competition in the
automotive and motorbike industries is necessary, nevertheless.
AXP Internal Dec 6, 2024 7
Capability to Pursue Innovation
The automobile sector is undergoing a change propelled by
innovation.
In order to introduce cutting-edge innovations to the market,
automakers are making significant investments in research and
development.
Although our organization has the necessary technologies, more work
still needs to be done.
Given the technology of our competitors, our business needs to make
greater investments in acquiring cutting-edge technology.
As a result, more computers, sensors, and information systems are
required to help our organization compete favorably.
AXP Internal Dec 6, 2024 8
Capability to Pursue Innovation
Current technology is used in our business to;
Store critical data related to emergency services
Driver support
connectivity for smart homes
One example of technology that can be purchased is connectivity for
the internet of things.
AXP Internal Dec 6, 2024 9
Innovation Approach
I would advise my business to use the gradual innovation strategy.
My research has demonstrated how affordable and manageable the
gradual method is.
Before starting the innovation, R&D division will have enough time to
gather the necessary data.
By gradually introducing new technological features to one model
before expanding to a wider range of products, the corporation
should pursue incremental innovation.
This strategy lowers the risk of a botched product launch by enabling
the business to gauge consumer reaction to new technologies before
investing in a new product line.
AXP Internal Dec 6, 2024 10
Innovation Approach
Additionally, the marketing division will have enough time to maintain
a steady flow without losing clients.
Because the company would invest gradually, the incremental
method will also facilitate easy financing of the invention.
Estimated sales growth of 7% is predicted for the year after the
adoption of the invention.
It is also anticipated that the company's financial capacity will
eventually increase.
AXP Internal Dec 6, 2024 11
References
Kang, J., & Kim, S. J. (2020). Performance implications of incremental transition
and discontinuous jump between exploration and exploitation. Strategic
Management Journal, 41(6), 1083-1111.
Kim, F. D., & Srivastava, R. K. (2024). Backcasting from the Future: Strategies
for Accelerating and De-Risking Discontinuous Innovations. California
Management Review.
Wiener, M., Gattringer, R., & Strehl, F. (2020). Collaborative open foresight-A
new approach for inspiring discontinuous and sustainability-oriented
innovations. Technological Forecasting and Social Change, 155, 119370.
AXP Internal Dec 6, 2024 12