Chapter

Market Entry Strategies for Innovators: Avoiding Pyrrhic Victories

David J. Teece

in Managing Intellectual Capital

Published in print March 2002 | ISBN: 9780198295426
Published online November 2003 | e-ISBN: 9780191596964 | DOI: http://dx.doi.org/10.1093/0198295421.003.0005

Series: Clarendon Lectures in Management Studies

 Market Entry Strategies for Innovators: Avoiding Pyrrhic Victories

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The distribution of the profits of innovation (among the innovating firm, imitators and followers, suppliers and customers) is influenced by entry strategies for innovators and conditioned by government policies. This chapter discusses approaches to understanding why (and under which conditions) innovating firms may fail to obtain significant economic returns from an innovation while customers, imitators, and other industry players benefit, focusing in particular on the role of (the ownership of) complementary assets, regimes of appropriability, and the evolution (and paradigmatic character) of industry development (in particular the role of dominant designs). Examples and illustrations from Pilkington, EMI, and IBM (among others) are employed to draw lessons for managing technological innovation.

Keywords: appropriability; complementary assets; dominant design; entry strategies; firms; government policy; innovation

Chapter.  8049 words.  Illustrated.

Subjects: Microeconomics

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