While cases of disruptive innovation tend to get all the attention, adjacent innovation is another strategy that shouldn’t be ignored. Instead of trying to reinvent the wheel, companies can leverage the things that they do well to reach new audiences in different industries. This type of innovation, responsible for everything from eyeglasses to Teflon, may be the right approach for you.
Learn more about companies who have innovated across industries and how you can imitate their strategies and their successes.
#1 Amazon Goes from Books to IoT Devices and Beyond
Now that Amazon has become such a ubiquitous part of our lives, it can be easy to forget that it began as an online bookstore in Seattle. As the company expanded, they eventually started selling music and clothes, built a third-party marketplace and patented the 1-click purchase option before introducing Amazon Alexa and their own smartphone.
The rise of Amazon is a prime example of the power of adjacent innovation. Keep in mind that when Amazon launched in 1994, Barnes and Noble and Borders were still thriving retailers. Once Amazon was able to corner the book market through home delivery and low prices, they didn’t stop there. They found new ways to leverage their model across different industries.
Today, the company continues to collaborate with other industries to find new ways to deliver products, technology and content to customers. In fact, their pursuit of innovation has taken them full circle and back to retail locations. The business giant that has played a part in the demise of traditional retail stores is now using innovation to reinvent the customer experience and make stores relevant again.
#1 GM Creates a Financial Branch
General Motors is a great example of a company finding new ways to use their expertise. In 2010, GM purchased AmeriCredit Corp and officially launched a financial services branch of their business. This allowed GM to enter a new industry and use their car knowledge to provide customers with better loan and lease agreements through GM Financial.
As a result, GM was able to streamline the loan process, offer special deals and profit from the interest on loans. Eventually, they expanded to also offer construction and real estate loans and insurance for car dealerships. Instead of only focusing on creating disruptive technologies, they were able to draw on their core competencies to expand into other industries in a way that supported their main business.
#3 1-800-Got-Junk? Expands into the Moving Industry
When 1-800-Got-Junk was looking to expand, it made sense to use their strengths to enter the moving industry. With 162 franchise locations across the world, the company clearly knew how to handle a fleet of trucks, run a call-center, recruit employees and provide a superior customer experience. That made it relatively easy to go from simply hauling away junk to offering expert moving services through their new company, You Move Me.
While they weren’t necessarily introducing anything revolutionary to the moving industry, they were taking a successful model and infrastructure to make a more into an adjacent business. The same innovations that helped them create a junk removal business were easily applied to the moving industry and You Move Me earned $17 million in its first year.
Consider Adjacent Innovation for Your Business
Disruptive innovation may be the headline grabbing version of innovation, but it isn’t the right approach for every business. Investing time and resources in adjacent innovation can help you take advantage of core competencies in a low-risk way that still yields large results. Think about ways you can use existing distribution channels for new products or how collaborating with another industry could improve your customer’s experience. You may be surprised to see how your strengths can reach across industries to drive innovation.
To learn more about corporate innovation check out the pocket guides, eBooks and case studies at the prooV Learning Center.