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Please use this identifier to cite or link to this item: http://hdl.handle.net/10362/3945

Título: The strategic deployment of quality-improvement innovations
Autor: Costa, Luis Almeida
Dierickx, Ingmar
Issue Date: 2005
Editora: University of Chicago Press
Resumo: While most of the literature on innovation has been concerned with the firm's research and development decisions, this paper addresses the question of how to deploy an innovation to fully realize its rent potential. More specifically, we use a game theoretic model to study the deployment of quality-improving innovation, i.e., innovations that enhance the quality of an existing (or basic) product. Three deployment strategies are compared: captive use, where the firm uses the innovation to enhance the competitive position of its product; licensing where the firm shares the innovation with competitors; and independent selling, where the firm incorporates the innovation in a complementary product or service which is sold separately to consumers. We identify three concerns that affect the deployment decision: achieving cost efficient production, ensuring coordinate pricing of the basic and enhanced products, and mitigating competition within products. Furthermore, we study how the interplay of these efficiency and competitive considerations favors certain deployment options relative to others
Descrição: Journal of Business, Vol. 78 Issue 3, p1049-1072
URI: http://hdl.handle.net/10362/3945
ISSN: 0021-9398
Appears in Collections:NSBE: EG - Artigos em revista internacional com arbitragem científica

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