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How Smart Companies Bypass Radical Innovation to Enter and Dominate New Markets

by Constantine Markides (12100)

The economic benefits of the first-mover advantage have been grossly exaggerated. The companies which develop and pioneer radical innovations are rarely the ones which ultimately end up dominating the markets they create. Instead, the major profits in any market tend to accrue to the established corporations which have the skills, resources and mind-set to take niche products and scale them up into mass markets.

With this in mind, established corporations should not even try to develop radical innovations. Instead, corporations should subcontract the creation of new and radical products to start-up firms, and concentrate instead on consolidating the results generated by these start-ups. This is the strategic model already widely used in creative industries to great effect. This same business model should also be picked up on and used in many more industries.

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