Chinda Eleonu
Professor Horwitz
SI 482
28 September 2020
In my opinion, an entire company can be built on a single innovation. There are
numerous companies today that started with a single product or service, but expanded their
offerings over time. A prime example of this is the large conglomerate known as Amazon.com.
While Prime users today know the giant for its bustling eCommerce offering, the platform
started out of Jeff Bezos’ own garage as a online bookstore back in 1995. Bezos originally chose
to focus the business on books due to the large global demand, low price per book, and the large
variety of physical books available. Starting out as one of the many companies during the
Dot-com bubble innovating as a web commerce, Amazon made the most of their platform with
multiple expansions as time went on. In 1998, the company started selling CDs and DVDs. In
contrast to traditional brick and mortar stores, Amazon allowed customers to listen to song clips
and receive recommendations based on their mood. Innovations like these continued with time,
such as their third party seller marketplace in 1999, opening their platform to a huge volume of
buyers and sellers, to their launch of the now commonplace loyalty program, Amazon Prime.
An innovation requires numerous external factors in order to reach its fullest potential.
The main three factors that are key in development of value are the loyalty of customers, the
presence of competitors, and the surrounding macroeconomic conditions. Customer and user
demand for products and services from businesses are major drivers of all types of innovation.
For an innovation to be successful, there must be customers whose needs will be satisfied by the
offering’s value proposition. To do this, it is important to identify the ideal customer for the
offering, which can be done through multiple channels, for example, focus groups, surveys, or
existing data. Next, open and competitive marketplaces inspire firms to offer new and improved
product offerings through innovation. Many strong corporations today started out as entrants into
highly competitive markets, such as when Google, a late entrant, replaced Bing as the world’s
top search engine. Lastly, macroeconomic conditions are key in the success or demise of an
innovative idea. Regulations in effect influence how firms can innovate through restrictions, such
a. In addition, the government utilizes several policy instruments to support innovation, such as
grants, tax incentives, and guarantees for debt financing.
As a company matures, the goals of its innovations shift from uncertain and ill-defined
targets to well-articulated design objectives. This is because in the early stages, the market needs
for an innovation can only be stated with a broad uncertainty. However, as time progresses, these
uncertainties dwindle with the increased reliance on research and development, resulting in less
innovation but more functional improvements. Reaching maturity, firms are now fully
specialized, so any significant innovations are likely to occur outside of the original offering.
Some of Apple’s main competitive advantages are the ease of use for its products, their
brand equity, and their digital hub. First, the ease of use that Apple products provide users is
unrivalled within their industry, as the company focuses on usage as the main goal when
designing a product. New users will rarely, if ever, need to consult user manuals or guides with
this simplistic approach incorporated into each product. Next, the high level of trust that Apple
has built within their industry is a major source of competitive advantage. Apart from their ease
of use, Apple is marked by their incredible customer service, technical elegance, and premium
quality. Due to their strong customer loyalty, millions around the world will line up for the
release of a new Apple product, regardless of the price. Lastly, the interrelationships between
Apple’s products via their ‘Digital Hub’ is a key factor in their success. With products such as
the iPhone, Macbook Air, and Apple Watch, sharing the same software and applications, the
decision to purchase a subsequent Apple product when considering an additional device comes
naturally to consumers. Apple’s ease of use and interrelationships both contribute to the
company’s powerful brand equity, which will keep customers devoted to Apple’s entire product
catalog.