BSM 600 Chapter Notes - Chapter 6: Symbian, Lead Time, Trade Secret
12 Mar 2017
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Quest for ca firms invest in innovation. Nv: creation of new product/process via devt of new knowledge/new combo of existing. Nn: initial commercialization of invention by producing/mktg new good/service or by using a new method of production. Once introduced, innovation diffuses via people buying (demand side) or via competitors imitating (supply side) Innov can be from single invention or combo of many. No consistent evidence that more rd or more product introductions are (+) associated w profitability. Depends on value created by the innovation and the share of that value that the innovator is able to appropriate. E. g. if industry huge competition like personal computer, greatest value customers (pay for less than the value they derive) Regime of appropriability: conditions that influence the distribution of returns to innovation. Strong: innovator is able to capture a substantial share of value, e. g. pfizer viagra. Weak: other parties derive most of the value. 4 factors that determine appropriability regime: property rights.
