Demand innovation: GM’s OnStar case

Abstract

A new form of business innovation, a response to the current challenges to growth initiatives, is being pioneered by a handful of farsighted companies. These companies have shifted their approach from product innovation to demand innovation. Such new‐growth businesses focus on growing new value by discovering new forms of demand. For example, in the mid‐1990s, engineers within several GM business units realized that technological advances might enable the creation of a new business focused on the needs of drivers. The crucial factors in GM’s success have been its ability to look at customers’ driving needs from a fresh perspective and its decision to serve these needs through a business design that leverages GM’s unique hidden asset – its unequaled installed base of vehicles.