Product Performance Innovation
Product Performance innovation is another classic (and rather broad) form of innovation, as it covers those innovations that allow you to outperform competitors on the attribute or benefit level. As the authors briefly allude to, attributes in and of themselves are difficult to defend. As we have seen in our work with means end chains, strategy comes from chains of meaning and are therefore highly defensible. When unidimensional, "one-trick pony" brands are surpassed by competitors on that "one trick," it can be extremely hard to recover. In fact, it could be argued that a competitor can simply leverage all of your past marketing to slingshot past you on that attribute. Product performance is certainly a core type of innovation, but one which must be used judiciously.
From The Ten Types of Innovation:
Product Performance innovations address the value, features, and quality of a company's offering. This type of innovation involves both entirely new products as well as updates and line extensions that add substantial value. Too often, people mistake Product Performance for the sum of innovation. It's certainly important, but it's always worth remembering that it is only one of the Ten Types of Innovation, and it's often the easiest for competitors to copy. Think about any product or feature war you've witnessed–whether torque and toughness in trucks, toothbrushes that are easier to hold and use, even with baby strollers. Too quickly, it all devolves into an expensive mad dash to parity. Product Performance innovations that deliver long-term competitive advantage are the exception rather than the rule.
Still, Product Performance innovations can delight customers and drive growth. Common examples of this type of innovation include: simplification to make it easy to use an offering; sustainability to provide offerings that do no harm to the environment; or customization to tailor a product to an individual's specifications.
As evidenced throughout this Lesson, we might tend to disagree with Keeley and the other authors who take a narrow view of sustainability and represent it as only a part of product performance. Sustainability can infuse strategy everywhere, open entirely new opportunities, and represent new spaces for innovation in many cases.
Product Performance Innovation in the Sustainability Space
It may seem like almost a lifetime ago, but there was a time when hybrid drive technology, first commercialized by the Toyota Prius, was downright revolutionary. Toyota had enough of a product performance advantage, and perhaps more importantly, committed to the Prius' success, that the Prius model continues to account for about half of all hybrids sold in the US, with Toyota owning nearly 64% of the US hybrid market.
Please watch the following :50 Prius commercial.
Video: Toyota Prius - Commercial (:50)
FLIR has dominated the worldwide thermal imaging market for decades, typically selling highly specialized imaging solutions for thousands or tens of thousands of dollars each. FLIR describes their approach to core markets as such:
Pioneers in thermal imaging, we were founded in 1978, originally providing infrared imaging systems that were installed on vehicles for use in conducting energy audits. Today our advanced systems and components are used for a wide variety of thermal imaging, situational awareness, and security applications, including airborne and ground-based surveillance, condition monitoring, navigation, recreation, research and development, manufacturing process control, search and rescue, drug interdiction, transportation safety and efficiency, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives threat detection.
What FLIR accomplished with the FLIR One was taking technology that was overwhelmingly inaccessible to the average consumer and making it available (first) as an add-on hardware component for the iPhone for around $200. While there was an initial early adopter "gadget geek" audience that knew FLIR, it eventually began to gain traction as a wider audience that recognized that the FLIR One could have far greater and more practical applications.
One of those applications is the ability to bring thermal imaging's application in energy auditing to the forefront. While professional energy audits might rely on thermal images of the interior and exterior of the home generated from one of FLIR's $10,000 units, more DIY-inclined homeowners began to realize that they could do ongoing energy audits using the FLIR One as they build, retrofit, or remodel their homes.
Please watch the following 9:51 video. Energy use application begins at 5:24 in the video.