Radical innovations certainly get lots of buzz. They’re what get people talking and create the biggest stir.
But low-cost, “disruptive” strategies can also address a niche need that can be innovative and profitable. Cutting down on some features in order to offer a product at a lower price is a tried strategy of innovation, but one that requires careful planning and forethought.
Thinking in innovative ways about altering a current product or service to offer it at a lower price does work for many businesses – think about Dell and Nucor. Scott Anthony, suggests that there are three questions a company attempting this kind of innovation needs to ask themselves before launching such a venture.
1. Is it still “Good Enough?” If you must strip so many features from a product that it no longer delivers what customers need, then the lower cost won’t have enough of an appeal. If the cell phone can’t be heard, it’s not “good enough.”
2. Will this product be different from the market leader’s next innovation? If a large company with years of experience in the market is in the process of making high featured, lower cost alternatives, then an upstart will have little success.
3. Is there a feature to the lower cost product that utilizes a new process? If so, there’s a greater chance of success.