Limited Strategic Innovation: Coping with the Complexity of New Product Development

Industrial innovation is a highly valued element of advanced economies which is expected to result in faster economic growth and the social and economic benefits associated with it. But innovation is principally a strategic issue for individual companies and may not be of the quality or quantity required to meet the requirements of particular macroeconomic policies. There is a pressing need to understand better the new product development process within the firm in order to appreciate why managers are rarely responsible for radical innovation. The currently fashionable portfolio approach to business management emphasises the need to administer the product mix as an integrated whole. The problem of accommodating innovative products within the firm's established product mix or portfolio is considerable in view of the need to obtain synergystic effects from the multiplicity of marketing mix components involved. The array of marketing mixes managed by the company comprises its marketing portfolio, a concept which suggests an alternative framework within which corporate innovative strategies can be understood. Analysed within this framework, several practical examples indicate that many companies seek limited, strategic innovation rather than radical new product development. The article suggests that such companies are as marketing‐oriented as they currently need be and that their constrained strategies of innovation make good sense in view of the limits of the product development process as a means of reducing uncertainty.