The 4Ps Innovation Space Model | Product |Process | Position |Paradigm Innovation

What is the 4Ps Innovation Space Model?

The 4Ps Innovation Space model was developed by two professors, John Bessant and Joe Tidd, from Exeter University in the United Kingdom.

The 4ps innovation space model comprises the 4 P’s, namely; Product, Process, Position, and Paradigm innovations, and clarifies how comprehensive the company innovation is. The model focuses on these four broad categories and subcategories consisting of the axis, starting with incremental innovation and ending with radical innovation.

According to the extent of change, the common classification for innovation according to novelty is incremental innovation and radical innovation.

Incremental Innovations and Radical Innovations

What is Incremental innovation?

Incremental innovation involves the process of the improvement, enhancement, and further development of existing services, products, or processes. The main reasons for incremental innovations include; meet new customer need, becoming competitive, repositioning the product/service, cost reduction, product differentiation, adaptation for introduction into new markets, or adaptation to new circumstances such as new policies and standards.

What is Radical innovation?

Radical innovations involve a complete design of new products or services, or processes, a total overhaul of exciting products to have a completely new product,s and often involve significant change and innovation. Radical innovations often arise because of changing policies, needs, and technological advancement. Radical innovation can also be done for new market ventures.

In short, the more you move away from the known, the more you go from incremental innovation towards radical innovation.

 

Incremental Innovations and Radical Innovations Compared

Type	Incremental Innovation	Radical Innovation
Product Innovation	New versions of established car models. E.g., Toyota v8 to a new model of the same.	Invention of electric cars e.g. Tesla – high-performance electric car
Process Innovation	Improved range of banking services delivered at branch banks	Online banking and mobile banking
	Improve retail logistics for faster delivery	Video Conferencing Meetings, e.g., with Skype, Zoom
Position Innovation	Improved retailing logistics	Online shopping or
	Changing the target market	Addressing underserved market – E.g., Universities are now offering classes online to reach out to new, underserved markets.
Paradigm	Rolls Royce – from high-quality aero engines to service company offering ‘power by the hour.’	Grameen Bank and other microfinance models -rethinking the assumptions about credit and the poor
	IBM – moving from machine maker to service and solution company	Linux, Mozilla, Apache – move from passive users to active communities of co-creators

Types of Innovations Innovation

The four broad categories of innovation types are the;

• Product or service innovation;  What we as an organization offer the world
• Process innovation; the way we create and deliver the product or service that we are offering
• Position innovation; who we offer the product or service to and the story we tell about it.
• Paradigm innovation;  the way we think about what our organization does and who we do it for. The paradigm is sometimes called the business model Innovation.

Mapping 4Ps Innovation Space Model

Product Innovation of 4Ps Innovation Space Model

Product or service innovation can be defined as creating and subsequent introduction of a product or service that is either a new or an improved version of previous products or services. It is, therefore, involves introducing new products, enhanced quality, and improving its overall performance.

The key drivers of product innovation include technological advancements,  outdated product design, changes in customer requirements, competitions, etc…  Product innovation is often generally felt by the customer and can result in a greater demand for a product.

In summary, product innovation involves;

1. The development of a completely new product or service.
2. An improvement or enhancement of the performance of the existing product or service.
3. Addition of new features to an existing product or service.

Innovation Space Product Innovation Example

There are many examples of product innovation available; A new model, often an existing car such as a new Toyota model, is incremental product innovation. Toyota does it a little better.

A new car concept with electric cars such as a Tesla was a radical product innovation. Tesla does it differently.

Process Innovation of 4Ps Innovation Space Model

Process innovation refers to a type of innovation an include changes in the equipment and technology used in manufacturing (including the software used in product design and development), improvement in the tools, techniques, and software solutions used to help in supply chain and delivery system, changes in the tools used to sell and maintain your good, as well as methods used for accounting and customer service.

Process Innovation Examples

Improved retailing, logistics. The goods reached the stores two weeks after ordering instead of four weeks. This is incremental innovation. We do it a little better than before.

The customers are ordering the goods online, and we are delivering the orders directly to the customer’s address. The stores are bypassed in the value chain. It is a radical innovation. We are doing it differently.

Position Innovation

Position innovation is the change in the context in which the products/services are introduced or, in other words, where the target of the offering lies and what the story told about it is.  The dividing line between these is often blurred, and innovation in one dimension often brings others’ changes.

Position Innovation Examples

Airlines segmenting service offerings for different passenger groups. For example, Virgin’s upper-class,  British Airways premium economy, etc. This is incremental innovation. There are slight improvements in meeting passenger needs.

Low-cost airlines such as Ryanair opening up air travel to those previously unable to afford it. Here they have created a new market. They also disrupted the existing market. Some passengers switched from the expensive airlines to the cheap ones. This is a radical innovation. Ryanair changed the framework of the industry. They radically changed the rules of the airline industry.

Paradigm Innovation

Paradigm innovation refers to the change in the underlying mental culture and models that frame what the organization does or how the company frames what it does.This category is often the hardest to handle as it is an expression of our understanding. An understanding we would like customers to appreciate.

Paradigm Innovation Examples

A bank sets up a 24 /7 hotline as many of the bank’s customers have begun to travel abroad. It is incremental innovation in our business model. The services expanded. We consider who we are, therefore on, then do it a little better.

Grameen Bank is lending money to poor people in developing countries. It has always been a no-go market for traditional banks. If you, as an employee, lent money to this segment of customers, you are fired. It is a radical innovation.

Grameen Bank has mentally redefined itself and rethinking the assumptions about credit on the poor, have identified them as a market. Grameen Bank has a totally different business model.

Criticism /Disadvantages of 4Ps Innovation Space Model

• An interesting question arises when one tries to relate how new innovation research with the new to whom question like

Is it new if it is new to the company but not generally within the industry as such?

Is it new if used in another industry, but not in the one we are part of?

It should be entirely new for all, like the Internet and online shopping was in the mid-nineties.

The model does not provide a precise answer to the new to whom question you or the group you are part of. You have to define that yourself.

• Is it incremental innovation or radical innovation? There is a blurring of the transition between the two extremes. It can be challenging to determine if it is theory one or the other of the four categories we are talking about; they can overlap each other.
• There is no correct solution to the criticism mentioned above, but the good thing about the model is that it continually forces you to discuss where your innovation takes place and how much you innovate. You will be in the process of using the model to get a clear understanding of where your innovation focus has to be placed.

Mapping Innovation Space; The 4Ps Innovation Space