Abstract:
Profiting from technological innovation requires both the development of new products and the capture or appropriation of profits from them. For new product development, ...Show MoreMetadata
Abstract:
Profiting from technological innovation requires both the development of new products and the capture or appropriation of profits from them. For new product development, the interplay of marketing and R&D has been intensively researched. In contrast, for capturing value, this interplay has been largely neglected in the literature. To fill this gap, we study choices by marketing and R&D managers regarding activities aimed at appropriating profits from new products. We study, in detail, how managers perceive the effectiveness of product-related patents, overall patent portfolio size, marketing, sales and services quality, lead time, and contributions to open standards. We conducted discrete choice experiments with 143 managers working in R&D or marketing functions in upper and middle management in a leading communications equipment firm, and analyzed the resulting data by comparing marginal effects of rank-ordered mixed logit models between the two groups. We find that choices of R&D and marketing functions on how to capture the most value differ strongest on the mechanism that is perceived as most important by R&D managers, “lead time advantages.” Top management needs to consider and deal with these diverging perceptions when formulating business strategies on value capture.
Published in: IEEE Transactions on Engineering Management ( Volume: 59, Issue: 4, November 2012)