Nestle, Coca-Cola, and Proctor & Gamble? You probably do, but have you thought about the many brands each own that are not under a universal name and why?
These are all decades old companies and they strategically expanded their product lines over years. And, they all have an on-going commitment of innovation and acquisition to insuring the company’s longevity.
This is important no matter your company size. A company must commit to its future with innovation and acquisition. For each of these processes the rules for vetting are unique.
This is also true for companies that offer a service and don’t have hard products. When you look at the history of retail, it’s understandable considering the changes technology and society has demanded of businesses.
Why Acquire Instead of Inventing?
A simple answer is that buying the existing product is the quickest and, in many cases, the most economical way to expand product lines with the prospect of achieving desired sales growth.
The price of competitor or an entrepreneurs invention is expected to cover all the development costs and a profit to the seller. When I mention buying is more economical it’s because the purchaser has by-passed the years of development which is a fact many miss.
Success in business is not by accident. Someone within the company saw alignment with their strategic growth initiative and an opportunity to buy a competitor.
Or they saw potential growth by adding an enteprenuer’s invention because it complimented their portfolio of products. Buying puts you into a fast track to increasing a product line but time must be dedicated to researching the viability and potential profitability.
Why Innovate New Products?
Human nature lets us be critical and inventive. A solution exists but can be better. Other situations reveal a solution is needed.
The successful companies I have the privilege of working with have established processes that feed their inspiration of new products. Knowing your end user is not just getting clinical data from an outside company. They have feet on the street and iterations with their end users.
Developing a solution opens up the potential of patents, exclusivity and bigger profits. Investments required are brain power, time, research, lawyers, specialists, and money.
Time is one of the biggest investments. Black & Decker Snakelight is one of the big success stories of product innovation. The patent protected the temporary exclusive position in retail market.
There have been brands that built their reputation on bringing new products to market in volume every year. Do you remember “Ronco” in the 1960’s? I looked forward to their new products which included a product that scrambled an egg inside its shell. The name still has a valuable reputation today.
Why You Need Both Approaches
Every business needs to adapt to changes to remain viable, grow and have a future. Sustaining a brand requires continual product improvement and additions.
Be committed to your business future and establish a process for expanding your product line.
Have questions? That’s understandable. We are here to assist you with branding, package design, store displays and sales tools that separate you from the crowd and support your sales goals.