The main sources of competitiveness of enterprises in the Republic of Croatia is the innovation potential. If there is a general consensus on the importance of innovation for effective and sustainable development of enterprises. When it comes to the manner of construction of the innovation potential there are many dilemmas. Innovation is generally accepted as a key factor in the competitiveness of the organization. Their importance is even stronger thanks to modern processes such as shortening product life cycle increase, technological capabilities, rapidly changing customer demands that can greatly increase, and the very global competitiveness. The development of new products and services is crucial for the growth and survival of innovation. More favorable industry position achieved competitive positioning which enables the company above-average industry profits in the long run. Profit industry is greater if the industry has a stable competitive structure, a more favorable position to suppliers, customers and substitute industries and lower the risk of entry of other complex company. On the other hand, industries' profitability is lower if the industry has a variable and undefined competitive structure.