The Power of Peripheral Innovation: A Case Study of AmorePacific’s Cushion Foundation

OVERVIEW:The locus of innovation can be found in either the core or the peripheral components of a product. Most innovation literature has focused on innovation in core product components because improvements in peripheral components were believed to have only a minor effect on overall innovation or market outcomes. However, AmorePacific’s “cushion,” a liquid foundation–saturated sponge in a compact, demonstrates that peripheral innovation can create significant competitive advantage: the company’s innovative sponges and puffs, peripheral components of its cosmetic products, generated sales revenue of $542 million in 2014. AmorePacific’s case suggests a four-step framework for implementing peripheral innovation. First, find customer hassles latent in the core components. Second, address those pain points by improving usability through peripheral components. Third, create synergy between the core and peripheral components. Finally, minimize costs associated with changes to peripheral components.