Wednesday, June 23, 2004

Orchestrating marketwide change

Traditional mechanisms used to launch products — such as targeting unique customer segments or developing compelling value propositions — don’t work anymore. Chakravorti recommends to innovators in the HBR of 2004 to use game theory and orchestrate a marketwide change of behavior, unraveling the status quo so that a large number of players adopt their offerings and believe they are better off for having done so. He says by understanding how social, commercial, and physical networks behave, innovators can develop new tactics. Furthermore innovators should:
- reason back from a target endgame,
- complement power players,
- offer coordinated switching incentives, and
- preserve flexibility in case its initial strategy fails.
Do you agree that traditional product innovation strategies are becoming extinct?