Punctuated Quilibrium

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Introduction
Innovation is described as the ‘introduction of new things or methods’ (Dictionary, 2013) and can be found in all areas of life from music, to food, to art, to business. In relation to the latter it can be defined as ‘the process of translating an idea or invention into a good or service that creates value or for which customers will pay’ (Business dictionary, 2013). In other words, business innovation must satisfy a new or existing customer need in exchange for an economical need meaning consumers will identify some form of value to the product/service and use it to fulfil a certain desire. There are numerous ways in which companies both large and small use innovation to gain some form of competitive advantage in the market place which include a range of various strategies. Global firms such as apple have used a combination of both radical and incremental innovation in an attempt to push their designs to the forefront of the market and capitalise on the majority of market share. Radical innovation refers to something that ‘transforms the relationship between customers and suppliers, restructures marketplace economics, displaces current products, and often creates entirely new product categories (Leigh, 2000)’; whereas incremental innovation involves ‘modest changes to existing products/services (or processes) to exploit the potential of an existing design’ (Smith, 2010). In Apple’s case they used both these methods over a prolonged period of time to obtain market dominance and this can be linked with the innovation theory of punctuated equilibrium which shall be discussed further in this essay.

Literature Review
As mentioned previously, some large firms use an amalgamation of both radical and incremental innovative techniques in order to create an advantage over their competitors. When a company introduces a product or service to the market through radical innovation it is normally ‘the result of a major technological breakthrough or the application of a new technology’ (Smith 2010) which can be used to exploit either an untapped market to gain customers who were once loyal to the old technology. Radical innovation also ‘provides a platform for the long term growth that corporate leaders desperately seek’ (Leigh 2000) meaning that by in effect creating a new paradigm, a stage has been set which can be built upon, supported by the new customer base which the innovation attracts. This type of innovation ‘involves a high level of novelty because they (companies) employ a new design with new components integrated into a new system architecture’ (Smith, 2010). On the contrary, incremental innovation ‘will build upon existing knowledge and resources within a certain company, meaning it will be competence-enhancing’ (Incremental vs. Radical Innovation). This model relies on continuous gradual improvements to previously established technologies or designs. In this instance firms use their research and development departments to actively search for new ways to tweak and progress existing products/services and make them better to either evolve with the times of keep up with competitors. Many products that are household items are a product of incremental innovation; ‘in the case of electric light bulbs, the original Edison design remained almost unchanged in concept, but incremental product and process improvement over the 16 years from 1880 to 1896 led to a fall in price of the light bulb of around 80%, thus ensuring its widespread use’ (Tidd, 2006). In addition to this, ‘incremental innovations can provide the ability to gain new customers while increasing the income generated by existing customers’ (Fisher, 2007) showing that as products evolve they can continue to attract new customers as well as appease the loyal ones.

While both the methods of radical and incremental innovation reside on opposite ends of the innovation spectrum, it is apparent that they both abide to similar theoretical principles. One of...
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