It’s often been said that innovation is everything when it comes to operating a business. From technology to health care and even food service, fresh ideas and constantly adaptable product and service profiles are needed if a business has any hope of growing and staying profitable.
Constantly innovating, though, is always the tricky part, as it’s not as easy as it may sound. Trial and error can often weigh more heavily to the error side, and a business may be written off for dead if it fails to produce a new hit after a couple years. However, occasionally a dying or stagnant brand can be resurrected from the dead because of a hit product, or series of products. Here are three brands that have used innovation as a shot of adrenaline to get their business jump-started once again.
1. Taco Bell
It’s been a rough couple of years for Mexican fast-food retail chain Taco Bell, which is operated by Yum! Brands, Inc. (NYSE:YUM). In early 2011 a scandal erupted over the meat content in Taco Bell’s seasoned beef. According to a lawsuit filed in Alabama, research of Taco Bell’s seasoned beef indicated less than 35% beef content, which is well below the minimum requirements set by the U.S. Department of Agriculture to label a product as beef. Taco Bell fired back with a scathing assessment of its own, but the PR damage had been done.
But rather than sitting on its laurels, Taco Bell took to the taste buds of millions of Americans and innovated its way out of certain disaster. On March 8, 2012, Taco Bell combined its fast-service Mexican-food brand with PepsiCo, Inc. (NYSE:PEP)‘s Doritos brand to create the Doritos Locos taco. Sales of Doritos Locos tacos have been phenomenal, with the company selling about 1 million of the delectable morsels every day and accounting for approximately one-quarter of all taco sales. The love for Doritos flavored chips even spawned a second collaboration, with the companies introducing the Cool Ranch Taco last month.
These tacos come with about a 40% pricing premium to standard tacos, providing the margin boost needed to help Taco Bell rise from the doldrums — not to mention another nice plug for the Frito Lay-branded Doritos owned by PepsiCo, Inc. (NYSE:PEP).
After powering many people through the 1960s with the small but popular Volkswagen Beetle, the company found its demand waning in the 1980s and 1990s. According to The Wall Street Journal, by 1992, Volkswagen had sold just 49,000 cars in the U.S., total, and had been thinking about pulling out of the region altogether.
However, things changed in drastic fashion in 1998, when Volkswagen reintroduced the Beetle with new, sleek styling and a fresh look aimed at hitting a younger market. The design didn’t just fit the bill based on its relatively inexpensive price — it touched a nerve with consumers who loved the car’s style.
So far in 2013, with the Beetle getting yet another stylistic update, as well as Volkswagen’s offering of a diesel engine option for fuel-efficiency lovers, sales of the Beetle are up 114% over the first quarter of 2012, demonstrating the strength of innovation.
For the company as a whole, it’s found success well beyond just the Beetle, which was its jumping-off point. According to its U.S. March sales release, Volkswagen sold 37,704 units, a 3.1% increase over the year-ago period, and also its best performance in 40 years.
3. Apple Inc. (NASDAQ:AAPL)
Perhaps no company rose from the grave, so to speak, more prolifically than Apple Inc. (NASDAQ:AAPL), after its introduction of the revolutionary iPod in 2001. A lot of this had to do with the innovative capability of co-founder Steve Jobs, who turned the company into a digital giant that transformed the way we work and play.
One aspect that can’t be forgotten about Jobs’ tenure as CEO was that plenty of trial and error was involved in the procuring of Apple Inc. (NASDAQ:AAPL)’s success. The Apple III, QuickTake 200 camera, and Motorola ROKR phone with built-in iTunes were all examples of Apple Inc. (NASDAQ:AAPL) products that flopped miserably.