Process innovation vs Product innovation

angazaMuch of what is written about innovation focuses on product innovations, especially in the high technology world. While these innovations are often significant, it must be recognized that often a breakthrough or significant product innovation cannot succeed without a process innovation as well. This was true when Haloid/Xerox introduced their first copier, the 914, to a modestly interested market and then innovated with a finance process that allowed customers to pay per copy.

The Silicon Valley Business Journal, published an article highlighting a similar situation. Angaza Design developed a significant innovation in low-cost, solar-powered LED lamp and phone charger. The problem was that the East African customers who were their target market could not afford to spend $50 thus limiting their market penetration. Their process innovation? They reduced the purchase price to $10 plus a pay as you use the energy it generates.  This made the product affordable to 90% of the population instead of just 10%.

Obviously without the product innovation, nothing would have happened, but without the process innovation to go along with it, you would have another product innovation that died.

Mitch

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2 Responses to Process innovation vs Product innovation

  1. Pingback: The Thirst For Innovation | Andraz Tori Blog

  2. Lukas says:

    Mitch,
    Fast Company recently had an article on what they called “servicizing” products (http://www.fastcodesign.com/1671633/how-to-think-about-turning-your-products-into-services). Two examples that they give — jet engines and residential solar — are similar to the ones you cite above. Financing seems to be pivotal for the penetration of solar PV both in urban CA and rural Tanzania.

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