Question

Explain why incumbent (established) companies are more likely to pursue incremental innovation, while new companies are more likely to focus on radical innovation.

Answer 1

Answer - The incumbent companies are already the established organisations in the market. They have their products introduced in the market and have already made their space. Hence , now their task is to bring about new changes in the existing products as per the demand and needs of the consumers and behaviour of the market. Thus they need to have the incremental innovation.

While on the other hand , a newly established company , in trying to make its space in the market tries such innovations which tend to throw out the existing competitors from the market. To make this space , they need radical innovation.