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If there is a popularity award for a word that captures the imagination of academia, politicians, media and businesses alike, one strong contender that stands out is the word “”. Coupled with “”, it holds the promise of unlocking the gates to the opening of new markets, enhanced firm efficiency and economic growth.

Studying innovation is much like the ancient parable about a group of blind men each touching a different part of an elephant and each satisfied that they understood the true nature of the animal. Innovation literature is vast, both in its scope and depth, with different authors choosing the prudent path of focusing on certain aspects of innovation. The outcome of such focus depends on who the actor is and what the focus is on.

The integrated framework of innovation is a market based approach for understanding innovation, its (market) outcome dynamics and product life cycle, enriched by our understanding of three (mutually non exclusive) fields of study — industrial organization, strategy and innovation.

In the previous chapter we presented the analytical framework of the Integrated Model. The three fundamental questions that the model explains are - is a product located in an integrated innovation space, it is so located and which then provides valuable clues to to do when designing strategy.

Approximately 2000 years ago, the Roman poet Ovid wrote a classic poem called . The 15 books in the poem describe the creation and history of the world in terms of Roman and Greek mythology, where constant transformation of the gods takes place. Today products, activities, firms and indeed whole economies are increasingly witnessing another type of metamorphosis as both product life cycles and geography get compressed.

For an innovator to stay ahead, the road is fraught with constant challenges. Nothing typifies modern capitalism more than the constant churn that takes place at the top, in today’s market place. Schumpeter illustrated this process in his famous observation on the that takes place in modern economies. As he observed in 1942.

While commoditization is an ever omnipresent threat, many established firms see the future of their industry not in terms of commoditization, but of impending irrelevance. Today’s icons are increasingly being thrust aside by new firms and new products. This decline of erstwhile industry dominance need not arise due to disruptive innovations that seen earlier in Chap. 2 and in Chap. 5. Rather, the discussion in this chapter is the struggle that some leaders face, in thwarting of challenges from upstarts. A struggle oftentimes to stay relevant.

In the previous two chapters we witnessed the constant efforts of firms to stay at the top as witnessed in the case of the iPod, or to lead a fight back by continuously innovating (LEGO, Barbie) and the rapid rise and dramatic fall of an erstwhile digital giant (Netscape). In each of the cases, the Integrated Model provided a useful framework for analyses. Yet another threat for firms is that of commoditization. Like the proverbial sword of Damocles, there is a constant and impending threat of commoditization looming over even the most innovative products. When price becomes the lowest common denominator, managers increasingly scratch their heads, wondering not of how to remain a wolf, but how to differentiate themselves and manage to stay in fox territory. .

The commoditization trap seems to be the inescapable destiny of products, even as firms continuously try to differentiate their products in their attempts at standing out. Sometimes better design seems to be one of the few escape routes available, albeit temporary, in slowing the slide towards the end of the product life cycle. Breakthrough innovations hold the only real key to escaping from commoditization.

There exist a significant number of diagnostics tools that could be employed to evaluate and understand an organization’s strengths and weaknesses in the field of innovation management. One basic motivation of the use of these tools is that such diagnostics permit the manager to assess the that exists, whether it be with respect to its competitors or an internal gap - that between its innovation capacity and desired innovation goals (including the organizational preparedness).