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Are you running your business into the ground? Thats what you are doing if you aren’t innovating. It’s “innovate or die” you know. Products have a life cycle. Eventually they die. You have to continually give birth to new products in order to keep your company young, vital and profitable.

Gillette’s Innovation Strategy

Let’s examine the fruits of the innovation strategy for Gillette razor blades. Following is a list of the innovation made by Gillette over the years:

* Safety razor invented in 1895
* Razor marketed specifically to women 1916
* Razor dispenser 1946
* Stainless Steel blades 1963
* Double-blade razor 1971
* Disposable double-blade razor 1976
* Razor with a pivot point 1977
* Razor with a lubricating strip 1985
* Razor with spring-loaded blades 1990
* Razor with microfins 1995
* Razor with three blades 1998
* Manual Razor with battery power 2004
* Razor with five blades 2007
* Razor with rear trim blade 2007

Gillette innovated on a regular basis to provide fresh new products to market. There was only one invention, but a stream of innovations. In 1999 Gillette’s market value was $43 billion dollars.

What Does an Innovation Strategy Look Like?

Your innovation strategy should be an integral part of your business plan. SWOT analysis is an excellent starting place. SWOT stands for strengths, weaknesses, opportunities and threats. Once you know the major factors that will likely impact your business for good and bad, then it is time to make your innovation plan.

Consider how the management of Gillette might have approached innovation in the 1960’s. Their prime product, the safety razor, was no longer covered by patent protection. There were a number of competitors coming into their market space. Management attacked this threat head on. Their plan was to innovate their core product to differentiate themselves from their competition. As a result they introduced a double bladed safety razor in 1971.

This new product was a success, but their competitors soon learned to duplicate it. This threat required continuous innovation to stay ahead of the game. Gillette’s stated strategic innovation goal was to earn 40% of their revenue from products introduced within the last 5 years.

An Innovation Strategy Model

Let’s create a possible innovation plan for Gillette in the 1960’s:

Strengths:

1. Strong products for shaving
2. Strong demand for products.
3. Efficient manufacturing facilities.

Weaknesses:

1. Lack of diversity in products

Threats:

1. Increasing competition against core products.

Opportunities

1. Products for women.
2. Increased the value of products to the consumer.

From our SWOT analysis we as Gillette’s management could make the following innovation plan:

1. Goal: 40% of revenue from products introduced within the last 5 years.

2. Create diversity in the product line by introducing products for women.

3. Develop new products continuously to stay ahead of the competition.

The following action plan was used to accomplish the innovation plan.

1. Commit a significant portion of resources to research and development to innovate new products.

2. Create a diverse group of innovators from different cultures and backgrounds.

Gillette’s actual implementation of their innovation strategy resulted in research and development centers in the United States, Great Britain, Spain and Germany.

Summary

This brief look at innovation strategies has given you an idea of their importance. In addition, you now have a basic understanding of how to implement them. Without innovation a company will gradually succumb to market forces and become obsolete.