I've had this philosophy for a while. It was borne while I was at Whirlpool and one of the basic components we had to provide for product ideas was "sustainable competitive advantage" which was another way of saying the idea had to be protected by patents. No way. Can't do it. At least you can't do it reliably. Hope is not a strategy.
So, how to win? Always innovate. Apple. HP. Google. P&G. Wal-mart.
If you don't? Sears. Priceline (remember them?). Ford.
Are you guaranteed to win? No. Ask Maytag. Gateway. GM.
But I can't think of a single successful, long term company that has succeeded and NOT innovated.