*Exploring the Different Types of Innovation for Firm Competitive Advantages DOI: http://dx.doi.org/10.5772/intechopen.111820*

#### **Figure 1.**

*Classifying technological innovation.*


#### **Table 1.**

*Examples of the different innovation types.*

capabilities to compete in the market. As an example, Gillette blade innovations have been competence-enhancing for Gillette. They helped Gillette deepen its existing capabilities. Another competence-enhancing technology is software languages which build on existing capabilities and skills. New software programming languages enhance the skills and capabilities of existing software programmers and software engineers. Competence-destroying is when avionic systems in an aircraft replace fight engineers. New technology has displaced the flight engineer. Another example of competence-destroying was in the agricultural area where plows driven by horses were replaced by a tractor. The skills required to develop harnesses etc., became redundant, and these people could not be skilled to build tractors. A further example of competence destroying is the switch from coal-fired power stations to renewable

energy sources like wind, solar etc. The skills required to design, build and operate coal-powered power stations are different from that required for renewal energy sources, and as such, these skills will become obsolete.

While firms are faced with new and emerging technologies all the time, they must decide how they are going to react. They can either react by introducing other new and emerging technologies into the market, or they can develop new competencies and capabilities through other types of innovation. Firms can also compete based on novel combinations of existing technology products; this is referred to as architectural innovation, which one may argue is a subset of product innovation. Firms, however, do not need to rely solely on product or technology innovation to compete. These other types of innovation include process innovation, where firms look at new methods and techniques on how they produce the products they sell, adoption of process innovation thus allows firms to improve how soon they can take their products to market; process innovation can also improve the time to market and the cost to produce specific products so while some firms may not be the product technology leader they have mastered process innovation and can compete on aspects such as time to market and cost for example. On the other hand, other firms may choose yet other ways of competing; this may include, for example, organizational innovation, where firms experiment with different business models, and how they can take products to market, organizational innovation can also include, for example, centralized or decentralized structures. In terms of a centralized structure, the firm adopts a central organizational structure through which all decisions are made, whereas, in a decentralized structure, decision-making is distributed throughout the organization. Marketing innovation is another innovation opportunity where the firm uses marketing as a means of creating competitive advantages; this involves using different marketing communication channels to get products to the market or marketing data to exploit gaps in the market so the firm can react accordingly. Another innovation opportunity is service innovation, where firms develop value-added products and services to increase their existing portfolio of value-added offerings to the customer. As an example, firms can focus on how they conduct after-product sales services, so here they are competing on better servicing the market they already have.

Transformational innovation is when whole industries or society is transformed, and this could be either technological or non-technological. For example, the whole world was subject to transformation through the COVID-19 epidemic. It is not something that was anticipated, but it is an unexpected shock to the industry and society and firms, and markets must react either through technological or non-technological innovation, which in such a case is probably competence enhancing and competence destroying. Other examples include, for example, the creation of the internet, the invention of the aircraft, the invention of automobile vehicles, etc.

Having painted the innovation landscape, it is prudent to dive further into the different types of innovation. Section 2 explores the different types of innovation.
