Out-Innovating is improving your product or service to provide more value than your competitors, either by delivering similar capabilities for lower price or by creating a better experience or result for the customer, even if the price is unchanged or higher.
Apple, of course, is constantly working to out-innovate their many competitors and that is the key thing that has turned them into, arguably, the most valuable company on the planet.
Uber out-innovated the taxi industry by making it more convenient for customers to catch and pay for their ride.
Amazon has repeatedly out-innovated traditional retailers and, for example, over ninety percent of Americans used Amazon to shop for at least some of their gifts this last holiday.
Google and Facebook have out-innovated traditional advertising outlets and now own a huge share of the advertising market formerly owned by television, magazines and newspapers.
This strategy is the ultimate way to be competitive in the market. It’s not easy for competitors to replicate and can create substantial differentiation for customers.
One caveat, whether they decide to out-position or out-innovate, companies won’t maximize their success if they focus entirely on their competitors. The best recipe is to focus first and foremost on your customer and their needs, while being sure to keep your rivals in your peripheral vision.