ABSTRACT
Innovation diffusion relates to the speed and extent to which a supplier’s market is likely to adopt new products, services and/or processes. This depends on several factors, including aspects of culture, competition, profitability, capital investment, protectionism and regulation. Typically it can be measured by the number of product launches and/or rate of version control in any given market. The Innovation Diffusion Matrix requires the buyer to assess the relative strength of competitive forces within the supply market, with that of innovation diffusion. There are four competitive approaches available to the buyer depending on the type of market: latent markets, dynamic markets, static markets, and protective markets. Procurement is regularly required to work with suppliers to improve existing products and services. This model helps buyers to analyse the supply market that they are sourcing from and to formulate competitive strategies for getting improvements in product functionality, service, quality and/or cost.
