Teece’s Win-Lose Innovation Model

Developing an innovative product is actually much more complex than it sounds. Many companies have failed along the way while others have been overtaken by copycat competitors. Teece’s win lose innovation model has been developed in order to counteract these type of scenarios and ensure a successful innovation to the market that will yield profits to the business.

Innovators and Imitators

First things first, we need to define the terms Innovators and Imitators as proposed by Teece. Innovators are the ones that launch a new, innovative product to the market. On the other hand, imitators are those market players that copycat the innovator’s idea or a part of it, and market it with improved features and boosted marketing and advertising. As a result, the one enjoying the rewards is not always the one that has brought the product to the market. For this reason, Teece has put forward three unique areas that need to be considered in order for an innovation to be successful.

1. Protecting the idea

The first step you have to take is to protect your idea from copycat competitors. In order to do this, you will need to acquire legal rights and apply for an intellectual property rights protection. You will need to register copyrights and secure patents before your competitors try to mimic your innovation. It goes without saying that all legal work should be performed by experienced legal attorneys.

2. Respond to the market

Whatever precautions you take, market players will attempt to imitate your innovation at some point. When this happens you will need to react fast and respond to the market accordingly. It is highly likely that your competitors will identify some of your weak points and try to make it work to their advantage. For this reason, you will need to carefully analyze what your competition is doing and make any necessary changes to your own products in response.  

3. Reaching scale as soon as possible

When you launch a new product that has caught the market’s attention, it is highly likely that demand will scale up pretty quickly. At this stage, it is extremely important to be able to respond to that demand. If you don’t you might quickly lose market share over those competitors that have the capacity to respond to exponentially increased demand. There are a few options for responding quickly to increased market demand:

  • Scale up in house: This option provides you with increased control over the process including quantities and timings, but it requires significant investment.
  • Outsource: This option will likely help you scale up faster, but you will hand over to a third party some of the control of your process.
  • Combination of in house and outsourcing: This is a middle-ground solution that uses both external suppliers and in-house production in order to mitigate risks.
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