Profiting from Technological Innovation: Implications for Integration, Collabora
ID: 345572 • Letter: P
Question
Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy
Innovating firms often fail to obtain significant returns on their investment, giving up the profits to customers, imitators, or other industry participants. “Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy”, analyzes why this occurs, and gives recommendations as to how an innovator should proceed and strategize. Three building blocks that comprise the equation for success are explained, specifically regime of appropriability, dominant design paradigm, and complementary assets. Decision tables and a flowchart are presented for complementary asset integration versus contract.
QUESTIONS
What are the two most important dimensions of appropriability?
Why in the preparadigmatic phase do complementary assets not loom large?
How is distribution a complementary asset?
If the time required to position yourself (relative to the competitor) is short, and the investment required is minor, how should you proceed as the innovator?
Regarding cola in a can and diet cola, why did RC Cola, the innovator fail, losing the market to Pepsi and Coca Cola?
Explanation / Answer
Answer 1:
Appropriability comprises of environmental factors after excluding market and firms structure. Two most important dimensions of appropriability are:
Answer 2:
In the pre-paradigmatic phase, complementary assets not loom large because in pre-paradigmatic stage :
All these factors results in making complementary assets as a critical factor, and therefore, they does not appear large during pre-paradigmatic phase.
Answer 3:
Complementary assets of firms are utilized for creating value for the business in the process of commercialization. These assets of the firms compliment the innovations developed by the firms. As distribution network servers the similar purpose of generating value and complimenting innovation by distributing it through its network. It is considered as complementary assets.
Answer 4:
In the given scienerio, if he time required to position yourself (relative to the competitor) is short, and the investment required is minor, than being a innovator I will proceed by preparing the strategy that will determine the path to position our product in lesser time. First, by scanning regime of appropriability and accordingly proceeding towards dominant design paradigm and than by utilization of complementary assets I will prepare the strategy to be followed for success.
Answer 5:
RC Cola, the innovator fail, losing the market to Pepsi and Coca Cola because its competitors technological advancements. Competitors simply copied the formula developed by the innovator RC Cola, and saved the cost incurred in development of formula.
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