“Hitting them where they aren’t” outflanks the leader by creative imitation.

Here, the innovator doesn’t create a major new product or service. Instead, it takes something just created by somebody else and improves upon it. This is imitation. But it is creative imitation because the innovator reworks the new product or service to better satisfy customers’ wants and needs. Once the innovator succeeds in creating what customers want, it can achieve leadership and take control of the market.

The perfect example is how IBM became the leading producer of PCs in the 1970s. Apple invented the PC. When the Apple appeared, it was an instant sensation. IBM set to work to outflank the Apple. It asked, “What ...

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