Porters 5 Forces with Kraft Foods
THE FACTORS THAT INFLUENCE THE DISTRIBUTION OF PROFIT FROM INNOVATION IS;
First - the industry evolution, in the early stages of an industry, a variety of products solution maybe introduced with no clear leader. And once the market chooses the winning set of product characteristics, less design heterogeneity is possible and the competition becomes more prices based. The early phase often amounts to standard competition (David and Greenstein, 1990).
The second factor is the appropriability- this hinges mainly on the nature of the technology and the accessible legal mechanism to protect an innovator. It clearly deals with the firm’s strategy and organization as a means to appropriate value from innovation (winter, 2006).
The third is the complementarity, for many electronic products, widespread acceptance depends on the availability of related goods that enable or enhance their functionality. For instance, computers need software, and the DVD players need pre-recorded movies. The innovating firms must decide whether to produce such complement internally or to rely on others to do so (teece, 1986).
Also in an outsourced supply chain, a lead firm coordinates a partner network to maximize the market value of its innovation. The lead firm is responsible for maximizing the profit that divides with its partners and suppliers.
Lastly in dynamic, the highly networked industry such as the information technology and electronics, these are additional factors that come into play. each innovation at the core of a new product offering, is likely to require access to and coordination with other innovations to provide to users. the technology at the heart of electronic products have a high rate of change, so the entry barrier are always short lived and management must be capable of recognizing and responding to the changing market characteristics. (teece et al., 1997).
The difference between the ipods and the notebook pcs is:
• Software does not figure in
First - the industry evolution, in the early stages of an industry, a variety of products solution maybe introduced with no clear leader. And once the market chooses the winning set of product characteristics, less design heterogeneity is possible and the competition becomes more prices based. The early phase often amounts to standard competition (David and Greenstein, 1990).
The second factor is the appropriability- this hinges mainly on the nature of the technology and the accessible legal mechanism to protect an innovator. It clearly deals with the firm’s strategy and organization as a means to appropriate value from innovation (winter, 2006).
The third is the complementarity, for many electronic products, widespread acceptance depends on the availability of related goods that enable or enhance their functionality. For instance, computers need software, and the DVD players need pre-recorded movies. The innovating firms must decide whether to produce such complement internally or to rely on others to do so (teece, 1986).
Also in an outsourced supply chain, a lead firm coordinates a partner network to maximize the market value of its innovation. The lead firm is responsible for maximizing the profit that divides with its partners and suppliers.
Lastly in dynamic, the highly networked industry such as the information technology and electronics, these are additional factors that come into play. each innovation at the core of a new product offering, is likely to require access to and coordination with other innovations to provide to users. the technology at the heart of electronic products have a high rate of change, so the entry barrier are always short lived and management must be capable of recognizing and responding to the changing market characteristics. (teece et al., 1997).
The difference between the ipods and the notebook pcs is:
• Software does not figure in