Being Unique in the Market – the Border Between Innovation and Monopoly
Coming up with unique products in the market is a relatively safe method to obtain market share, but this strategy has its risks. First, the company has to invest in research, and second, any product that is new today will be common tomorrow, especially in our world where technological discoveries are something common.
The life cycle of any innovation is the same. First, the product is brought on the market by a company, with a high cost, as the respective company has to cover the research costs. Moreover, they can afford to establish any price as long as the product is unique. If the product is successful, the company will have this advantage for a period, until the competitors are able to analyze the product and to respond with resembling products. While the company still has this advantage, their goal must be to reduce the costs.
The powers of companies offering those products must be access to information, creativity and research. The marketing team also has an important role, as they need to bring the product in front of the buyers as soon as possible. Exploiting the advantage that the company has is crucial, and the product can only be declared successful once it has covered all its research and marketing costs.
Some methods to prevent imitation from the competitors are to release new improved versions of the product, and to decrease the costs. In fact, as soon as the company has offered the initial concept to the buyers, they also need to continue researches, this time, with the goal of decreasing the production costs, as the competition will surely find a method to produce the innovation, for many times, with a reduced costs.
The best example is electronics, whether we are talking about TVs or smartphones. When the devices of this kind that represent innovations are brought on the market, they have huge prices, which are usually affordable only by the exclusive clients, but after a year, when all the producers from the same niche would have their own version, the prices will be reduced.
The Risks of Using this Strategy Exists
One of the risks of this strategy is the monopoly legislation, which might forbid the company to introduce the product on some markets. Another risk might be the rejection of clients. For example, the Smart TV’s that offer Facebook can’t rely on the social media facilities of those TV’s to consider them as innovations. In fact, it is known that the social media features of those TV’s are only used by companies are used only for marketing purpose, and as soon as the device arrives in the house of the buyer, he will try Facebook on TV once, and then to forget about the facility. We have Facebook on our phones, computers and tablets, so the last thing where we need it is our TV’s.
Whether it is risky or not, the strategy of innovation is useful for the image of the company, as even if the product is not useful, the company can use the innovation to increase the brand awareness and to increase the respect of clients.