Improving a Competitor's Product

Sometimes the best, least expensive, fastest, and least risky way to introduce new products is to copy or improve upon a competitor's new product introduction.

Many companies, large and small, consciously adapt a strategy to "follow the leader" when it comes to new product introduction, pricing, and other business changes. It saves scarce funds for expensive R&D and for educating the target buyers.

However, companies that successfully adapt this new product strategy have to:

• be able to move quickly to commit company resources to capitalize on a competitor's new products
• compete in product categories where innovation does not necessarily depend upon proprietary technology, large capital improvements, and preemptive patents to protect new ideas
• often settle for less sales potential than the innovator
• be careful of losing marketing focus and spreading the company too thinly over too many segments of the market

For example, a small, local, snack food company could bring out a less-expensive version of a new baked tortilla chip, following the lead of Guiltless Gourmet and Frito-Lay in introducing a baked (not fried) tortilla chip. Or an independent, local car repair shop could institute a 20-minute "quick lube" oil change service at a slightly lower price than national chain shops.