Auckland University’s research into market innovation reveals opportunities for NZ businesses
Companies need to shape, not predict, the market new research from Auckland University has revealed.
A three-year research project into market innovation showed that instead of gradually creating new products and services, businesses need to look at everything that impacts what they make and how it’s used, and shape that wider ecosystem. Often this will mean businesses need to collaborate with each other, even occasionally with their competitors.
The research that was conducted by Professor Kaj Storbacka and Associate Professor Suvi Nenonen found that New Zealand businesses “seem to have the fundamentals of what it takes to shape markets, but very few are doing it, which is likely resulting in many lost opportunities and product failures.”
Nenonen, also the Graduate School of Management’s Direct said: “people are beginning to realise that, with the pace of change and digital disruption, you can no longer predict the market, but you can innovate and shape it.
“You can reconfigure the playing field. The old rules say you have to reactively adapt to the environment that you are part of. The new playbook says: seek to proactively adapt that environment to yourself, so it works better for you and others,” Nenonen said.
“Market innovation is not simply a matter of ‘build it and they will come’. Rarely, if ever, will a new technology be so radical and compelling that it spontaneously calls into being a market. Just like the car needed roads and the iPad needed wireless technology, innovations generally need certain conditions to make them viable. These conditions often involve a while lot of different players, from suppliers and partners to support infrastructures and regulators.”
Neonen added that creating a minimum viable product (MVP) is not enough to create new markets. “Firms now need to identify the ‘minimum viable system’ their product needs,” she said.
The research showed market innovation pays and leads to sales growth, improved financial performance and market share, and that it can “grow the pie” across sectors.
Professor Storbacka added: “our call to shape markets represents a 180 degree turn for those with a traditional business education. It requires a profound shift in mind-set about how the market works and therefore how to best grow your business.
“That shift is from fighting for a bigger market share, or piece of the pie (zero-sum game), to baking a bigger pie for everyone (positive-sum game) via systemic innovation,” he said.
Related stories:
Insurers rise to the challenge of change
Fintech continues to gain popularity among banks, insurers
A three-year research project into market innovation showed that instead of gradually creating new products and services, businesses need to look at everything that impacts what they make and how it’s used, and shape that wider ecosystem. Often this will mean businesses need to collaborate with each other, even occasionally with their competitors.
The research that was conducted by Professor Kaj Storbacka and Associate Professor Suvi Nenonen found that New Zealand businesses “seem to have the fundamentals of what it takes to shape markets, but very few are doing it, which is likely resulting in many lost opportunities and product failures.”
Nenonen, also the Graduate School of Management’s Direct said: “people are beginning to realise that, with the pace of change and digital disruption, you can no longer predict the market, but you can innovate and shape it.
“You can reconfigure the playing field. The old rules say you have to reactively adapt to the environment that you are part of. The new playbook says: seek to proactively adapt that environment to yourself, so it works better for you and others,” Nenonen said.
“Market innovation is not simply a matter of ‘build it and they will come’. Rarely, if ever, will a new technology be so radical and compelling that it spontaneously calls into being a market. Just like the car needed roads and the iPad needed wireless technology, innovations generally need certain conditions to make them viable. These conditions often involve a while lot of different players, from suppliers and partners to support infrastructures and regulators.”
Neonen added that creating a minimum viable product (MVP) is not enough to create new markets. “Firms now need to identify the ‘minimum viable system’ their product needs,” she said.
The research showed market innovation pays and leads to sales growth, improved financial performance and market share, and that it can “grow the pie” across sectors.
Professor Storbacka added: “our call to shape markets represents a 180 degree turn for those with a traditional business education. It requires a profound shift in mind-set about how the market works and therefore how to best grow your business.
“That shift is from fighting for a bigger market share, or piece of the pie (zero-sum game), to baking a bigger pie for everyone (positive-sum game) via systemic innovation,” he said.
Related stories:
Insurers rise to the challenge of change
Fintech continues to gain popularity among banks, insurers
