Analysis of Innovate or Die
Assignment #1
Summary
Innovate or Die brings to light the necessity for businesses to expand among their current products. As stated in the introduction of the article, “Companies must have the audacity to attack their core businesses, or competition will. Whether a new product immediately fails or maintains a steady maturity, every product goes through the life cycle: introduction, growth, maturity, and decline. The dreaded decline stage may not hit for twenty years, which is what a company should hope for. In the case that the cycle is extremely short, that’s when you know it’s time to alter your product; whether that be changing the product itself to simply changing the packaging. Everybody likes to hear that something is “New and improved,” even if he or she may not be loyal to the product or the brand. This “New and improved” concept is essentially brand extension. According to the article, Crest has 52 different SKU’s, which means 52 different products that are all part of the same line of products, such as toothpaste, mouthwash, or whitening strips; they all serve a purpose for a clean, healthy, and vibrant mouth.
In class we talked about cannibalization, which means creating a product that has the opportunity to turn more profit than the current best selling item. The word cannibalization automatically sounds negative, but if it’s within the same company, what’s the harm? This can quickly tie into the first mover advantage; being the first in the industry typically results in a decent share of the market because customers initially associated your company with the new product. This works best among game breakers, which are not just simply a brand extension; they are extremely innovative and monopolize the market until others follow their lead and come out a similar product. In this case you want to be the second company to release that game-breaking product and receive a majority of the market share. An example of this is the Crest White Strips.
Summary
Innovate or Die brings to light the necessity for businesses to expand among their current products. As stated in the introduction of the article, “Companies must have the audacity to attack their core businesses, or competition will. Whether a new product immediately fails or maintains a steady maturity, every product goes through the life cycle: introduction, growth, maturity, and decline. The dreaded decline stage may not hit for twenty years, which is what a company should hope for. In the case that the cycle is extremely short, that’s when you know it’s time to alter your product; whether that be changing the product itself to simply changing the packaging. Everybody likes to hear that something is “New and improved,” even if he or she may not be loyal to the product or the brand. This “New and improved” concept is essentially brand extension. According to the article, Crest has 52 different SKU’s, which means 52 different products that are all part of the same line of products, such as toothpaste, mouthwash, or whitening strips; they all serve a purpose for a clean, healthy, and vibrant mouth.
In class we talked about cannibalization, which means creating a product that has the opportunity to turn more profit than the current best selling item. The word cannibalization automatically sounds negative, but if it’s within the same company, what’s the harm? This can quickly tie into the first mover advantage; being the first in the industry typically results in a decent share of the market because customers initially associated your company with the new product. This works best among game breakers, which are not just simply a brand extension; they are extremely innovative and monopolize the market until others follow their lead and come out a similar product. In this case you want to be the second company to release that game-breaking product and receive a majority of the market share. An example of this is the Crest White Strips.