An extreme over-simplification of what it takes to innovate, yes.
Yes and, extremely useful when you need to keep it simple.
Twiddle one, or two, or all three of these factors and you're underway.
New target, existing need, existing occasion.
Existing target, new need, existing occasion.
Existing target, existing need, new occasion.
I could go on.
New target, new need, new occasion is highly appealing as it's the least likely to cannibalise existing volume.
But it's also the hardest for the business to achieve and the brand to stretch to.
(Although taking a peak at the new-new-new is always a useful exercise to help you draw the boundaries of what is desirable, feasible and viable.)