Competition and collaboration issues in technology development and deployment

textIn today's marketplace firms have to become specialized in specific technological aspects in product development due to intensifying competition. Further, the increasing complexity of offerings make firms become more dependent on other value-chain contributors such as providers of complementary and component technologies. Therefore, in addition to the inherent market of appeal of product, a successful introduction may depend on the firm's interactions with suppliers and even "competitors". These interactions with other firms in the marketplace present a unique set of challenges to firms. In this dissertation, we explore how a firm's approach to interacting with supply chain partners and/or competitors may depend upon how its product provides value to customers. In the first essay, we look into how a firm should design the interdependence between a durable good and a consumable such as a printer and a cartridge and utilize the benefits of an industry of generic consumable suppliers. In the second essay, we analyze the different approaches that firms adopt while commercializing their technologies to competitors in a networked environment (such as telecommunications). We identify the impact of the competitor's development capabilities on the trade-off between the increased competition and network benefits. In the third essay, we explore situations in which firms collaborate to develop a component innovation that they later market individually; they codevelop and jointly market; and they choose to individually develop and market. We consider how competitive strategies between development partners should consider the influence of supplier formation on the investment incentives of an OEM. In summary, this dissertation examines how the management of interactions with supply chain partners and competitors can play an important role in technology development and deployment. Our results highlight key trade-offs and provide insights for managers who are involved in developing and deploying new products.Information, Risk, and Operations Management (IROM

Development and deployment drivers of clean technology innovations

Despite the existing challenges in the capital market, technological and market uncertainties, the current business environment may be fertile for innovative firms that could find affordable and scalable clean technology innovations. Navigating innovation management process for any clean technology project is a practical issue that requires attention of financial and non-financial factors affecting technology development and deployment. Such endeavor has precipitated many of the complex questions involved with clean technology industry. This article surveys literatures on resource-based view of the firm, operations management, innovation and technology management, and clean technology. The article identifies key drivers - operations, market and regulatory - of clean technology projects, and further demonstrates their interrelatedness within a comprehensive integrated conceptual framework of development and deployment. This integrated framework contributes to our understanding of innovation management process for clean technology firms, including supply and demand sides

COLLABORATIVE PRODUCT DEVELOPMENT WITH COMPETITORS TO STIMULATE DOWNSTREAM INNOVATION

Open innovation through collaboration could be beneficial for various reasons, but participating firms must also consider the strategic consequences of their formation on the supply chain. This study is concerned with how open innovation through inter-firm collaboration and strategic alliances may generate value for competing suppliers by stimulating the adoption of the new component innovation by the downstream supply chain. The analysis specifically examines three types of firm interaction representing different levels of open innovation. First, in the joint venture, fully integrated suppliers would develop and market the component. Second, in the development alliance, partially integrated suppliers share the development outcome, but compete in marketing. Finally, independent suppliers do not form any kind of collaborative formation. The findings reveal that the value of open innovation comes not only from technology development, but also how well it stimulates the downstream OEM to invest.Collaboration, strategic alliances, open innovation, competitive strategy, new product development, supply chain management

Sequential Product Development and Introduction by Cash-Constrained Start-Ups

Firms developing novel and innovative products regularly face a canonical product development and introduction problem: introduce a proven and immediately available product, or delay product introduction until the successful development of an advanced version. Limited access to resources for the development of an advanced version adds another wrinkle to this problem, particularly for cash-constrained startups. For such startups, introduction of an on-hand product can generate additional funds to support the development of an advanced product. However, the lower performance of the on-hand product can negatively impact the perception of the firm’s future products — i.e., cannibalize the payoffs of the advanced product — and lower future profitability. In this paper, we study this trade-off between revenues that an on-hand product generates for R&D funding and the cannibalization effect it has on future products. We characterize the optimal introduction timing of the on-hand product as a function of the financial resource constraints, the interdependence between these sequential products and the cost of development. Comparison of these results with that of an established firm (with no such cash constraints) show important differences between the optimal product introduction strategies of a startup and an established firm. Specifically, while it is always optimal for an established firm to accelerate the launch of a better quality on-hand product, a startup might find it optimal to delay its launch. We translate our analytical findings into a managerial framework and illustrate these results using examples from the pharmaceutical and medical devices industries

Sequential Innovation by Start-Ups: Balancing Survival and Profitability

Start-up firms, which are by nature cash-constrained, often consider launching an immediately available product to generate funds for developing more advanced products. However, this release could have an adverse effect on the perception of the firm’s future products. A key decision for the start-up firm in such an environment is: when should the first product be released? In this paper we consider the product development and introduction decisions for a start-up which has a product that is ready to launch and is also developing a more advanced product, whose launch readiness is uncertain. We model the tradeoff between the adverse effect of a first version on overall profitability and the valuable stream of revenue it generates for R&D funding. We characterize an optimal policy with cash thresholds to determine when the firm should launch the first version and whether it should continue development. We derive managerial insights by studying these cash thresholds under various technological and market scenarios. Our analysis underscores a fundamental difference between how a start-up and an established firm view commercialization: a start-up would delay the launch of a good first version longer while an established firm (without bankruptcy considerations) would accelerate its launch

Sequential Product Development and Introduction by Cash-Constrained Start-Ups

Firms developing novel and innovative products regularly face a canonical product development and introduction problem: introduce a proven and immediately available product, or delay product introduction until the successful development of an advanced version. Limited access to resources for the development of an advanced version adds another wrinkle to this problem, particularly for cash-constrained startups. For such startups, introduction of an on-hand product can generate additional funds to support the development of an advanced product. However, the lower performance of the on-hand product can negatively impact the perception of the firm’s future products — i.e., cannibalize the payoffs of the advanced product — and lower future profitability. In this paper, we study this trade-off between revenues that an on-hand product generates for R&D funding and the cannibalization effect it has on future products. We characterize the optimal introduction timing of the on-hand product as a function of the financial resource constraints, the interdependence between these sequential products and the cost of development. Comparison of these results with that of an established firm (with no such cash constraints) show important differences between the optimal product introduction strategies of a startup and an established firm. Specifically, while it is always optimal for an established firm to accelerate the launch of a better quality on-hand product, a startup might find it optimal to delay its launch. We translate our analytical findings into a managerial framework and illustrate these results using examples from the pharmaceutical and medical devices industries