Question

Topic: Other

Horizontal Innovation Versus Vertical Innovation

Posted by Anonymous on 10/13/2008 at 5:19 AM ET 125 Points
Can somebody give me simple and clear definitions of Horizontal Innovation and Vertical Innovation? Would appreciate if you could also cite examples. What's the difference between the two?
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RESPONSES

  • Posted by Inbox_Interactive on 10/13/2008 at 7:49 AM Member
    Innovation or integration?
  • Posted by Jay Hamilton-Roth on 10/13/2008 at 8:43 AM Member
    Is this a homework assignment? If so, please see guideline #5 at https://www.marketingprofs.com/ea/guidelines.asp
  • Posted by saul.dobney on 10/13/2008 at 8:47 AM Member
    Horizontal innovation applies across markets and is often connected with cost and differentiation strategies. Vertical innovation is per market and is related to segmentation and niche strategies.

    The balance is always whether to target all the market, or a specific sector where an innovation may have more value but fewer people interested in it.
  • Posted by saul.dobney on 10/14/2008 at 5:00 AM Accepted
    Vertical innovation would not just be the flour, but also the service and downstream elements. So it could be a pre-mix, part-baked bread etc. It could be packaging innovation for specific uses or industries. Vertical is like the prongs of the fork digging in to specific market sectors and uses.

    Horizontal works across industries. For instance a different milling method, revised distribution across all industries etc
  • Posted by steven.alker on 10/15/2008 at 9:15 AM Accepted
    It’s to do with vertical markets and marketing, and their various different trade definitions, which always complicate the issue as against the wider application of your products across all potential and all possible users.

    In your industry or any industry, you develop products which are based on technology and processes so that you gain some kind of advantage in the marketplace – better performance, lower costs, and better shelf life and so on. If you can develop a product which has a wide range of potential applications in different markets, then you have something which is truly a horizontal development – because it applies to the total spectrum of your existing and potential customers.

    If on the other hand, you develop a product which has a competitive advantage (Any of the above and perhaps more, because we are specialising) within a narrow market, such as, for example the development of specific yeasts or growth cultures, for the bio-pharmaceutical industry, that is a true vertical innovation. You might revolutionise the production of a novel antibiotic because your culture overcomes some limitations of the old agar growth medium, but no-one is likely to find an application for this specialised development in cake manufacturing or the sale of bulk flour!

    Hope that helps

    Steve Alker
    Xspirt
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