Innovate like a start-up

N°292b – Synopsis (8p.) – Innovation Strategy
Innovate like a start-up
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The rise in power of digital innovations is often perceived as a threat to the established players. In the face of start-ups, how can they reinvent themselves to win the race for innovation?

Tourism, transports, mass retail, financial services… These sectors of activity, like many others, underwent drastic transformation in only a few years. Players coming from nothing, like Airbnb or Uber, have emerged and succeeded to impose themselves to the market in less than a decade, challenging the position of long-established leaders.

The rise of new entrants is a dynamic that has always existed, and has long been integrated in any competitive analysis. But the rapid and exponential evolution of new technologies has enabled digital start-ups to seize significant market share before existing leaders could even react. Indeed, the battle seems unfair. On one side, established organizations, efficient and well anchored processes, staff trained to proven practices, and the need to preserve the existing while securing an immediate profitability for the shareholders. On the other, a myriad of “pirates” entirely focused on the search for disruptive innovations, accepting a high level of risk, betting everything on their quest for market share—even at the price of often abysmal losses in a first phase. How can one resist in such conditions?

Yet, there are examples of established leaders that not only managed to defend their position, but even succeeded at reinforcing it in the current upheavals. General Motors, for example, figured out how to reinvent itself after the economic crisis and is now a player in the disruptive segment, like Tesla and Uber. The car manufacturer can boast of having developed the first electric sports car that is affordable by middle classes, of having tested the greatest number of driverless cars in California, and of having obtained more than 2 billion dollars in financing through an entry from SoftBank into the capital of GM Cruise, a division dedicated to the development of autonomous vehicles.

Indeed, established leaders have valuable assets to face the start-ups, such as their self-financing capacity, a solid brand image, the relations established with their customers, comprehensive databases fed with their past and current activities, etc. How can they take advantage of these assets to reconcile the race for innovation and the preservation of their profitability?

In this synopsis:
– Are you fully leveraging the value of your data?
Competing with start-ups on the field of innovation
– Making use of external entrepreneurs

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