https://www.techtarget.com/searchcio/definition/radical-innovation
Radical innovation is an invention that destroys or supplants an existing business model.
Unlike architectural, incremental or disruptive innovations, radical innovation completely blows up the existing systems and processes to replace them with something new. If a market can clearly delineate between a before and after a single point in time or technological progress event, it's probably the result of a radical innovation.
Radical innovations are high-risk and high-reward endeavors. They create entirely new markets, so companies that develop them can be unmatched for a long time in a market as others try to play catch-up. Conversely, they often rely on untested ideas so they might fail entirely if no market is found. Because of this, some companies might be wary of radical innovations and tend to shy away from them in favor of safer, incremental advancement.
Innovation is important to any business that wishes to grow. Not all innovations are equal though. Innovations can go from very small developments with small effects to extremely large ones that completely change a business landscape. This spectrum of possibilities is often called the innovation continuum.
In this context, an innovation can be a technological advancement, a new business process, a new marketing strategy, and the like. It's important to note that any business will adopt a clearly superior technology, so true innovation often combines a new technology with a new business strategy.
While there is no hard and fast rule about the innovation continuum, it is often presented with the following levels:
Academics and thought leaders draw delimitating lines between disruptive and radical innovations. According to them, the primary difference is that disruptive innovation starts out at the lower end of a market and then rises up the value chain to replace the incumbent player over time. Radical innovations completely replace a market top to bottom, quickly, and are therefore quite rare.
In most usage though, disruptive innovation and radical innovation have a more subjective distinction. They are often used interchangeably in casual contexts. All will generally agree that radical innovation wholly replaces an existing design, process or system to create something substantially new and unique.
There have been many breakthrough technologies that profoundly changed how humans live, for example, iron tools, synthetic ammonia fertilizer, semiconductors, and the Internet. In a business context though, a radical innovation combines technological development with a business strategy to take advantage of it.
Amazon has produced at least two radical innovations: its data-driven e-commerce-only business model and in its Amazon Web Services (AWS) platform.
Amazon was not the first company to sell items online, but it combined online technology with business strategies to radically change how consumer shopping would be done. It was able to save money by not having a physical store presence and using lean (just in time) ordering. It also focused on the customer experience with one-click purchasing and using data to make recommendations.
AWS was another revolutionary product. They were able to create an entirely new market for cloud computing by offering virtual machines on their existing hardware's extra capacity. This is an excellent example of radical innovation because it combines many factors to fill a business and consumer need. Amazon had a problem of excess capacity on their servers and wondered how to make money from it. With the technological advancements of high-speed internet connectivity and computer virtualization, and the yet unrealized consumer need for small cheap internet servers, Amazon took that excess capacity and radically innovated the cloud computing market.
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22 Nov 2023