Thanks for the comment Henner. I know these discussions, and also the example you mentioned. You can always go higher and then you will end up with "I want to live a happy life".

You (as a company, designer, PM, etc.) need to define on which level you can and want to innovate. The solution always depends on and relates to the user need you are going to address.

I would not say that you as a drill-making company should immediately switch into tape-making. But you possibly could ... (in case the market changes, your customers leave, your billings drop, etc.).

The drill example just illustrates that you may not only be in a competition with other drill-makers. As long as you realize this and know the goals and needs of your customers, you are already on the right track.