THE HEART OF INNOVATION

       To survive or compete today, you need to have an edge that makes you different. This edge, or innovation, can be a process, a design, a business model or even a marketing approach.
       One way of having a point of difference is by design, like the iPod. An iPod is really "just" an MP3 player - its function is much the same as others. But it's the iPod's greatly improved quality and design that set it apart.
       Closer to home, Red Bull is another leading example of innovation. It began as a caffeinated drink in Thailand favoured by drivers and labourers working long hours and needing an energy boost. The drink's association with this group meant it was looked down upon by those from higher socio-economic classes. It took an Austrian to realise its potential and develop it into an iconic international brand.
       While Red Bull in many countries is still targeted at night workers, it has moved up in status as these workers are often in the entertainment industry. The drink is also used now as a cocktail ingredient, and has also been targeted at young people and extreme sports. It is an interesting case study of how "association" can create brand value and an innovative approach to marketing.
       In terms of innovative business models, a good example is e-commerce and Amazon.com. Instead of people having to go into a shop to buy books, they could do it over the internet. Amazon was able to target a worldwide market, create economies of scale, and increase choice for buyers.
       Although Amazon started as a channel, the business model continued to evolve, with suggested purchases, reviews, online communities and then expansion to a wide range of new business lines. It is a perfect illustration of how innovation is progressive, and not a static situation.
       An example of business process innovation is shortening production time. If one company says it can produce something for me in a month, while another says it can produce it in a week - which would I choose? Naturally I would go for the one that will give me what I want faster. Henry Ford's famous process innovation was establishing the assembly line for the production of motorcars, rather than having each worker producing a single car.
       Although people tend to think of innovation as something new, in fact it can be just a different way of doing something old, such as the knife that rubber tappers use. An innovative company came up with the idea of giving rubber tappers a knife with a removable blade, similar to the blade that fits into a razor. This meant they could replace the blade without replacing the knife, saving money and improving their efficiency as the sharper blade made more precise cuts in the tree to extract the rubber.
       If there is a common theme in all these examples, it is that innovation comes in many shapes and forms. Indeed it rarely conforms to the stereotype of a brand new invention, but rather is an improvement on something that already exists.
       Another important point to remember about innovation is that it is not a single step but can be an evolution. One innovation leads to another.
       In these challenging times it is vitally important to keep thinking of how you can do things differently and better. Once you have taken the first step on the road to innovation you may be pleasantly surprised as to where the journey leads you.
       Virasak Sutanthavibul is an executive vice-president at Bangkok Bank Plc. This is part of a bi-monthly series of articles written by executives of the bank to educate the readers on ways to do business domestically and internationally under current market conditions.