Copycats and ‘Me Too’ products
I wasn’t sure at first if I liked this article. I’ve always taught the line that innovation and new ideas are a key ingredient for business success, from the unique selling point to new product development driven by investment in R+D. Controversially, The Economist makes the case that imitators aren’t necessarily the bad guys.
According to the article, companies often copy and go on to succeed. The iPod was not the first digital-music player; nor was the iPhone the first smartphone or the iPad the first tablet. Apple imitated others’ products but made them far more appealing. The pharmaceutical industry is split between inventors and imitators. Some innovators, such as Pfizer, have joined the copycats, starting generic-drugs businesses themselves. The multi-billion-dollar category of supermarket own-label products (you can read about their boom here) is based on copying well-known brands, sometimes down to details of the packaging. Fast-fashion firms have built empires copying innovations from the catwalk.
History shows that imitators often end up winners. Chux, the first disposable nappies were overtaken by Pampers. McDonalds copied White Castle, inventor of the fast-food burger joint. Some studies show that imitators do at least as well and often better from any new product than innovators do. Followers have lower research-and-development costs, and less risk of failure because the product has already been market-tested.
Excessive copying, of course, could be bad for society as a whole and most people still think innovation must be rewarded with patents. No firm really wants to admit to copying, but some businesspeople are willing to talk about the limitations of innovation. A former chief executive of Dell, a computer-maker, asked “If innovation is such a competitive weapon, why doesn’t it translate into profitability?”
Thought provoking and a good evaluation point.
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