Innovation & Continuous Improvement: Competitive & Strategic Advantages

Instructor: Artem Cheprasov

Artem has a doctor of veterinary medicine degree.

This lesson goes over the concepts of innovation and continuous process improvement. You'll learn how they help companies maintain numerous advantages using real-world examples.

Gaining a Competitive Advantage

In business, the hardest thing to do is be competitive and stay competitive. But two things can help. One is innovation, and the other is continuous process improvement. What are these? How can they help?

In this lesson, we go over some examples and scenarios of the competitive and strategic advantages of innovation and continuous process improvement.

Innovation

Innovation, the process of creating a new product, service, or idea is a great way to improve a company's competitive advantage in a plethora of ways.

First, innovation can increase brand value and recognition. Apple was a pretty well-known company back in the early 2000s. But the use of Apple products was really limited compared to today as it was seen as an almost fringe competitor to Microsoft, Dell, and other PC-based hardware and software companies.

But what happened in 2007? The iPhone came out. The iPhone was not the first smartphone, but it was innovative in the way it perfected technology with user interface and design thinking. Apple's brand value, reach, and recognition skyrocketed from there. You don't see people camping outside of Microsoft stores, do you?

In fact, Apple demonstrated another strategic advantage of innovation. Innovation breeds more innovation. Think of the tablets that came after the iPhone. Or what about the smartwatch? One innovative process and product sparked a revolution of more products and a greater competitive advantage over rivals who were too late to the game.

This, of course, led to a third major advantage to innovation: increased profits.

To summarize, innovation offers a competitive and strategic advantage to any company because it:

  • Increases brand value, reach, and recognition
  • Opens up newer avenues for even more innovation
  • Boosts profits

Continuous Improvement

But does your company always need to innovate to boost its profits? Not necessarily. Continuous process improvement, incremental positive changes to an established method or technology, can yield numerous competitive and strategic advantages as well.

We'll turn to one of Apple's competitors for an example of this. Microsoft offers Microsoft Office. This suite of products has been in continuous improvement for over 30 years in one form or another! Is Microsoft Office seen as some sort of massively innovative software suite? Not at all.

But think about this. What is the best known, equally effective, alternative to Microsoft Office? If you had trouble coming up with an answer, there's a reason why. It's continuous process improvement.

Microsoft has been constantly improving and perfecting its product line in a way that has made it near impossible for competitors to gain a significant enough, innovative enough, advantage fast enough so that Microsoft could be dethroned.

Thus, continuous process improvement helps:

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