Research undertaken on a hundred new business launches (Kim and
Mauborgne, 1998) discovered that 86 per cent of them were standard
market value (me-too) launches, or only offered incremental improve-
ments. These businesses only generated 62 per cent of launch revenues and
39 per cent of profits. The remaining 14 per cent of launches were busi-
nesses that created markets or recreated markets that were already in exist-
ence. These ‘pioneering’ businesses although only 14 per cent of the
sample generated 38 per cent of revenues and a massive 61 per cent of
profits. The clear implication of this study is that organisations that are
driven by future profitability need to have a spread of business across the
portfolio. Companies that find the majority of their businesses or products
are in the settler area are paying insufficient attention to the innovation
process.
The organisation’s policies and practices that
are currently used to support innovation
This consists of identifying current policies that may be in place to support
innovation. It would also review whether any structures or procedures
have already been developed to try and facilitate creativity and innovation.
Internal analysis 99Pioneers
Value innovateMigrators
Improve value High-growth
trajectorySettlers
Me-too
businessesCurrent portfolio Planned portfolioFigure 5.4
The innovation/
value matrix
(Source: Kim and
Mauborgne, 1998)