Concentric Innovation: A Guiding Relationship with Value Chain Marketing

Abstract

Business history and literature are rich with examples of organizations across various sectors launching products and services that drive success for the firm. Numerous factors contribute to their success, and the literature has extensively documented them. However, one key factor driving sustained success is innovation. Organizations built on a foundation of innovation remain continuously relevant to their customers. However, not all innovations lead to success—some, despite their brilliance, fail to propel organizations forward. This suggests that certain types of innovation foster success, while others may not. Through the course of this research and an in-depth analysis of various business cases, it was noticed that certain innovations are so powerful that they reinforce the entire organization. These innovations are consistently observed in all successful organizations. What makes these innovations unique is their ability to drive further innovation across the business, creating a chain reaction that fuels continuous transformation. Moreover, their impact extends beyond the organization itself, strengthening the entire value chain and fostering innovation at a broader level. For example, IKEA introduced rectangular packaging boxes to address transportation and logistics challenges. This innovation, in turn, inspired the manufacturing unit to design products that could be disassembled to fit into these boxes. Since then, IKEA has continued to innovate around this concept, shaping its approach to storage, inventory management, manufacturing, and retailing—all optimized for rectangular packaging. This illustrates that a single, core innovation can drive numerous other innovations within an organization and beyond, influencing other members in the value chain. Such innovation can be referred to as ‘Concentric Innovation’.