Product and offering innovations are those shiny new devices you see on the shelf. Innovation efforts used to be (or often still are) focused on these kinds of innovations, like Sony’s Walkman, Mars’ Snickers bar (launched in 1930!) or Toyota’s Prius. While all of them required distribution channels, marketing and other support, such innovations are primarily about the product itself. For example, the Prius did not require substantial changes in consumer behavior and only moderate changes in dealer and manufacturing systems (retooling, yes, but not a total change in business models).

Product and offering innovations are sometimes too easy to focus on—‘if we have the best product, customers will choose to buy from us’—because they are tangible, relatively easy to understand and genuinely can provide considerable, obvious value. But today, it is rare that a product or offering innovation on its own is enough to stay competitive for long.