{"id":115930,"date":"2023-10-25T11:58:00","date_gmt":"2023-10-25T15:58:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=115930"},"modified":"2023-11-02T13:12:22","modified_gmt":"2023-11-02T17:12:22","slug":"innovative-strategies-in-business","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/innovative-strategies-in-business\/","title":{"rendered":"Peter Drucker’s Top 3 Innovative Strategies in Business"},"content":{"rendered":"\n

What are the top innovative strategies in business? Is it easy to find a market that has no competition?<\/p>\n\n\n\n

In The Essential Drucker<\/em>, Peter Drucker lays out three different approaches that managers can apply to entrepreneurial endeavors. These include innovations that establish preeminence in a market, those that improve upon competitors’ work, and those that identify a specialty niche with no competition.<\/p>\n\n\n\n

Discover more about these innovative strategies so you can apply them to your business.<\/p>\n\n\n\n\n\n\n\n

Three Innovation Strategies<\/strong><\/h2>\n\n\n\n

According to Drucker, the first of these innovative strategies in business\u2014establishing a commanding lead in the market<\/strong>\u2014is the most popular in the literature on entrepreneurship, but it\u2019s also by far the most risky approach. It requires extensive research, planning, and a willingness to commit all your resources to pushing forward one single gamble. If your innovation succeeds and your organization takes control of a market, your work will only get harder after that. You\u2019ll constantly have to push for the next innovation, and the next, or else your competitors will pass you by and you\u2019ll lose any advantage you may have had.<\/p>\n\n\n\n

The second and somewhat less risky strategy is to identify someone else\u2019s innovation that isn\u2019t being used to its fullest extent.<\/strong> Drucker says this commonly happens in the tech industry, where innovators are so focused on the technology that they\u2019re not paying attention<\/a> to how customers actually use it. The primary catch to riding someone else\u2019s coattails is that when you copycat someone else\u2019s innovation, you have to give your version a distinctive twist that sets it apart from the original. Looking for these almost-successful innovations can let your business open up whole new markets.<\/p>\n\n\n\n

Innovation Case Study: Apple Computers<\/strong>

In Walter Isaacson\u2019s biography Steve Jobs<\/em><\/a>, he shows how Apple Computers made use of both <\/em>of Drucker\u2019s first two innovation strategies<\/a>, though neither method proved as successful or as long-lasting as Jobs may have hoped.

In the first instance, Jobs and his business partner, Steve Wozniak, pooled all their savings to create the Apple I<\/a>, the first home computer with a keyboard that could be connected to a television screen. Their all-in innovation created a splash among computer hobbyists, but their dominance of the home computer market only lasted for a year. When the Apple II came out in 1977, their rival companies Tandy and Commodore released comparable home computers, with other copycats soon to follow.

The next innovation that set Apple apart came when Jobs was given a tour of the Xerox Palo Alto Research Center and saw their new Graphical User Interface (GUI). While Xerox meant to use this interface solely for expensive business computing systems, Jobs saw its potential in the home computer market<\/a> and took the idea back to Apple\u2019s designers. The result was Apple\u2019s Macintosh computer with its point-and-click interface that was far simpler to learn than any competing system. 

Unfortunately for Jobs, the Mac\u2019s other limitations\u2014a slow processor and its incompatibility with other systems\u2014opened the door for Bill Gates at Microsoft to copycat Jobs with the Windows operating system<\/a>, riding Apple\u2019s coattails (to use Drucker\u2019s words) just as Apple had done to Xerox. The lesson is that none of Drucker\u2019s innovation strategies should be seen as a guarantee of long-term market dominance<\/a>.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Drucker\u2019s final strategy is one that comes along rarely but can yield rich rewards. The trick is to identify a niche in a market that isn\u2019t being served and where there\u2019s no competition.<\/strong> Taking advantage of this kind of opportunity usually involves your organization having a specialized skill or body of knowledge that\u2019s otherwise absent in the market you\u2019re exploring. If you spot such a niche and can fill it, it offers a form of monopoly protection\u2014others may be discouraged from competing because the cost to duplicate your business\u2019s specialty may be high. However, if your company successfully establishes a niche monopoly, it\u2019s vital not to abuse that monopoly. Dissatisfied customers create a demand for competitors to step into the game.<\/p>\n\n\n\n

Uncontested Markets<\/strong>

Drucker describes the niche innovation strategy as something that\u2019s incredibly rare and specialized, but in Blue Ocean Strategy<\/em><\/a>, professors W. Chan Kim and Ren\u00e9e Mauborgne argue that uncontested markets may not be so uncommon. However, they require concerted work to locate. Kim and Mauborgne write that these kinds of innovative ideas can be sparked by viewing the market from the customers\u2019 perspective<\/a> and determining whether certain groups are underserved, what types of products or services are commonly bundled together, and what emotional value a business innovation might bring to a market.

In addition to the risk that Drucker proposes\u2014creating competitors by abusing your market dominance\u2014another downside of a niche monopoly is that you may run afoul of antitrust laws<\/a> that prevent one business (or a conspiracy of businesses) from monopolizing a market and exerting undue influence on prices. Large monopolies that must exist for practical reasons\u2014such as utility companies\u2014are often regulated by government agencies<\/a>. If a monopoly is deemed detrimental or in violation of antitrust statutes, the government may mandate its breakup<\/a> into smaller, competing companies, as was done with the US telephone system<\/a>.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

What are the top innovative strategies in business? Is it easy to find a market that has no competition? In The Essential Drucker, Peter Drucker lays out three different approaches that managers can apply to entrepreneurial endeavors. These include innovations that establish preeminence in a market, those that improve upon competitors’ work, and those that identify a specialty niche with no competition. Discover more about these innovative strategies so you can apply them to your business.<\/p>\n","protected":false},"author":14,"featured_media":65669,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,79,14],"tags":[1302],"class_list":["post-115930","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-entrepreneurship","category-management","tag-the-essential-drucker","","tg-column-two"],"yoast_head":"\nPeter Drucker's Top 3 Innovative Strategies in Business - Shortform Books<\/title>\n<meta name=\"description\" content=\"Innovation is a major requirement of all businesses. But how do you practice it? 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