The Product System Innovation Checkup is a tool and part of the Ten-Types-Of-Innovation macro method (also described here). The sixth of the Ten Types Of Innovation describes innovations that do not concern individual products, but are characterized by the combination and bundling of several products and/or services.
Product-system innovation can consist of individual products being modular, working together or being integrated. Value and utility can also be generated by making connections between offerings that normally have nothing to do with each other.
Example: In Taipei, you can make purchases on the subway, and you can use your cell phone to order groceries over the Internet. These can then be taken from the cooler of a vending machine at the exit point.
With product system innovations, you build your own benefit ecosystem that delights your customers and is difficult for competitors to copy.
Bundling products, or combining related offerings and selling them in a common package, is the most common model of a product system. In the 20th century, technology corporations in particular worked with just such models. They have developed platforms, spurring other companies to make their offerings compatible with the platform.
Other product system innovations are based on extensions to existing products or combinations of services and products. It is not always necessary to produce all the components of the system itself.
Successful product system innovations in practice:
– Mozilla: The non-profit organization became famous with Firefox. The web browser is based on an open-source platform that allows independent developers to program countless suitable plugins. In 2012, 450 million people worldwide used Firefox.
– Oscar Mayer: Lunchables are packages of crackers, meats, cheeses and desserts – products that are also offered individually by Oscar Mayer. Packed together, they are handy break snacks for school children.
– ELFA: In 1948, Swede Arne Lydmar designed a modular storage system consisting of a cabinet, shelves and sliding doors. The possibilities for variation and combination are limitless for customers in practice.