Early warning systems and firm survival

Date of publication: February 27, 2005


Innovation, in the context of invention taken to market, has long been identified as a key factor for growth of companies. This is particularly true for disruptive innovations, which radically change product and industry boundaries. Indeed, disruptive innovations are associated with most long-term success stories. Incumbent companies are adept at incremental innovation, continuously improving existing lines of products in terms of cost and quality, but they tend to perform poorly with disruptive innovation, and end up ceding their leadership to aggressive new entrants. Market research might be cited as a weak contributor to the identification of disruptive innovations as most of the innovations, particularly in the consumer product area, are not disruptive. In a world where turbulence and disruptions become increasingly a fact of corporate life, it is essential that market research develop methods and tools to help management identify those disruptions. The paper develops the required background and discusses a suggested methodology.

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