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Session
18
Product Strategy III
Capturing Value from Technological Innovation
For companies at the earliest technology life cycle (TLC) stages, before the industry
structure
has been established, the key to success is not so much on competing with established adversaries as it is on developing and defending an industry leadership position as the TLC
unfolds. In Session 16 (Factors in Sustainable
Market Leadership), we found strong evidence that innovativeness per se
is not sufficient to assure industry leadership. On the contrary, the forces of economic, social and
institutional inertia strongly favor the less innovative, more conservative design, even if it is
technically inferior. In this session, we introduce two additional factors that help determine
industry leadership (and thus profitability): the technology’s appropriability regime, and the
innovator’s access to complementary assets.
Readings: ® = required; scan = read
introduction and conclusions; scan inside pages;
(o) = optional;  = Adobe Acrobat File
Scan:
Required for class discussion (®):
Lecture Notes:
Product Strategy
III: Capturing Value from Technological Innovation
Discussion Question (time permitting):
Based on your reading of the assigned article, is
Echelon’s strategy appropriate given:
- its appropriability regime?
- its position relative to the dominant design
paradigm?
- the importance and availability of complementary
assets?
Where is Echelon’s vulnerability?
Assignment 3 (MRS Technology Case) Due/Class Discussion
Solution (to be posted after submission deadline)
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