Abstract
This paper focuses on the viewpoint necessary for creating innovative value by developing and selling new technological products or services which customers perceive as valuable. Existing theories on successfully developing new business tend to focus on firm efficiency, which brings a company strategic benefits and decreases strategic costs. Since a firm efficiency view is likely to result in cost saving and the production of commodity products rather than the introduction of new innovative products or services, however, customers tend to perceive little innovative value from it. This can lead to sluggish sales of durable goods, leading Small and Medium-sized Enterprises (SMEs) in durable goods industries to serious situations, such as bankruptcy. Sustainability of those SMEs depends on developing and selling innovative products or services that customers perceive value from. Before considering firm efficiency, SMEs in declining industries, therefore, must follow two steps in a framework for innovative value: (1) Identify the industrial structures and routinized actions associated with a firm efficiency view, which have obstructed the creation of innovative value. (2) Pursue different actions, such as the creation of differentiated benefits of products or services for a target market that competitors have neglected. The effectiveness of this framework is shown through case studies of SMEs in declining durable goods industries where industrial structures or actions with a firm efficiency view have been an obstruction of the creation of innovative value.
