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Radical Innovation: A Case Study

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According to Leifer (2000), it is very important to understand radical innovation because it transforms the relationship between customers and suppliers, restructures marketplace economics, displaces current products, and often creates entirely new product categories. It may provide a platform for the long-term growth that corporate leaders desperately seek. Radical innovation concerns the development of new business or product lines that are based on new ideas, technologies or substantial cost reductions. Therefore, requires exploration competencies. Incremental innovation usually emphasizes cost or feature improvements in existing products or services and it requires competencies in the exploitation of existing knowledge. Gersick (1991) …show more content…

Many researchers and practitioners are interested in why some firms are more successful at introducing radical product innovations than others. Chandy and Tellis (1998) identify a firm’s willingness to cannibalize as the key variable for differentiating firms with and without strong radical products. Sorescu, Chandy and Prabhu (2003) collect information from the pharmaceutical industry to study the sources and consequences of radical innovation. Their results indicate that most radical innovations come from a minority of firms. Firms with higher per-product levels of marketing and technology support obtain much greater financial rewards from their radical innovations than do other firms. Firms with greater depth and breadth in their product portifolio also gain more from their radical …show more content…

Their empirical study suggests that strategic planning, market analysis, technical development and product commercialization are key determinants of new product success for both really new products and incremental products. However, strategic planning and business and market opportunity and market opportunities analysis may be negatively related for really new products, but it can increase the profitability of incremental products. Conversely, improving the proficiency of strategic planning activities is positively related to the profitability of really new products but negatively related to that of incremental

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