The third question to ask yourself is: Where will this innovation fit in your portfolio?
Balancing focus and resources across the three different innovation horizons is key.
Horizon 1 is about improvements to your core – new packs, flavours, formats or formulations. It is about serving the needs of your existing consumers better.
Horizon 2 is for your adjacent opportunities – new categories, products or target consumers. This is about unlocking new audiences or occasions.
Horizon 3 is about transformative growth – including new business models, routes-to-market. These are longer term bets that might even cannibalise your existing portfolio in the short term but provide outsized growth potential in the longer term.
There are differing opinions about exactly how to allocate your resources depending on your appetite for risk but it is generally accepted that a 70, 20, 10 split across horizons 1, 2 and 3 will give you both sustainable short term growth with long-term upside potential.
Remember, renovating and improving your core offerings should command the lion’s share of your resources.
Join us next time as we explore the fourth question: How well do you know your consumers?
