Competition and innovation

A competitive system assumes the willingness of management to accept risks and to adopt new perspectives and methods of business operations. Hence, it is inextricably intertwined with innovation. Competition is manifested through company innovations. Innovations which stem from change in turn result in further change. Since change begets change at an ever increasing rate, a major management responsibility becomes that of recognizing and adapting to a more dynamic business scene.

To date technological changes have had the greatest effect on management thinking. Change, however, is not limited to technology and the physical sciences. Changing methods of marketing are having tremendous impact on competition and our way of life. Consider the competitive implications of the supermarket, self service, discount houses, shopping centers, automatic vending machines, and credit plans. Such process and service innovations will have an even greater impact in the future.

The challenge of innovation in marketing is the unused productive capacity of the firm and the economy. Unused capabilities are among our greatest social and economic wastes. Producing innovations which will result in greater utilization of the capacity is an urgent corporate and national need. It is worthy of the attention of thoughtful executives.

Two aspects of innovation should be distinguished. They are the perception, and the implementation. Innovation refers essentially to a qualitatively different thought perception. The focus of innovistic attention may be a process, a product, or even another idea. Competition, however, is affected largely by the implementation of innovations.

The corporate environment has a great influence on competition and the implementation of innovation. For instance, when there is a corporate climate in which change is anticipated, then competition flourishes and innovations tend to occur freely. In our society there is a rich tradition of expecting change [2]. This anticipation of change results from a conscious belief that changes are useful, helpful, good, and that they will occur. Such an attitude is one of the foundations of aggressive marketing. It is one of the reasons why the American economy has produced the marketing technology which today is being emulated in other parts of the world.

In the United States, then, we have an expectation of competition, in terms of price, products, brands, packages, services, and qualities. Each year we anticipate changes in automobiles, refrigerators, clothing, housing, recreation. We know that there is keen cross-competition among unlike products for consumer dollars. By contrast, however, there are other cultures which are restrictive in their anticipations. They do not expect, hope for, or plan for any changes in any part of their environment. They strive to maintain the status quo. In these cultures, which are resolute against the suggestion of new ideas, new products, and new processes, marketing plays but a minor role. Economic competition becomes devoid of meaning.