isom 1380 module 2

• innovators-runs after every new gizmo
• early adopters-sees the value of the new tech and willing to pay a high cost to purchase and use the tech
• early majority-not willing to bear a high cost
• late majority-higher standard, use unless absolutely necessary
• laggards-do not want to have anything to do with new tech

• understand their expectations
• if the previous group does not buy it, it affects the adoption of the later groups

innovators and early adoptors are willing to try new tech, they are techies and visionaries,  they view new gizmos as power tools

while the early majority are more conservative, they are pragmatic and want useful tools

• demonstrate to early majority that the innovation help them as opposed to showing that the innovation is cool
• provide support services such as manuals, customer service, set-up assistance; these lower the cost of using innovations
• concentrate on a vertical marketing strategy;
• bowling alley strategy-niche market, start off small, be number one and leverage success (don't need to be everything to everyone)
• choose customers with need, eg. segway for people in law enforecement

low rate of market growth; accelerated market growth(take-off stage, customer base shift to early majority); slowing of market growth

• estimate demand growth over time
• when difference group of customers adopt new products at different points in time
• financial attractiveness of product at different time
• rigtt promotional and pricing strategy

• less learning or switching cost for customers
• lower cost for retailers, eg. if Blu-ray is the dominant design, retailers don't need to have HD-DVD in store
• learning effects for firms; more R&D and better functionality
• network externality

the value of  product is affected by the total number of other people using the product

internet bandwith

• online gaming
• xbox
• blu-ray disc
• microsoft design
• mobile phone operating system Android

• installed base(existing customers), eg. number of people who have bought Sony Playstation
• complementary goods, eg. number of games available on Playstation
• QWERTY keyboard does not enable people to type in the highest speed, yet it won

• european union(EU) regulators chosed GSM over other competing standards for the mobile phone market
• US regulators chose the NTSC color standard in TV broadcasting

take a very long time to decide on mobile phone standard, eg. US market VS EU

when the number of adoptors cross certain threshold, the network externality become significant and one tech wins

• Technological functionality, eg. lomega Zip drive
• complementary good(alliance)
• Information, eg. a product becomes more popular when people know it sells well; changes customers purchasing decisions
• installed base
• intellectual property, eg. Qualcomm snapdragon processor

• does it provide a competitive advantage?
• does it have commercial value

• patents 
• copyrights
• trademarks
• trade secret

• provide incentive to innovate; recoup investment; ow imitators can easily copy
• disclosure of how the innovation works lead to an increase in the current knowledge base; encourage others to make improvement; the idea is not lost to humanity

• utility(functionality, can be obtained for process or invention)
• design
• plant

• only a concrete expression of an idea can be patented
• commercial value is not accessed during patent application, eg. a dog watch can be patented
• patent specification-describe how the invention works
• patent claims
• if the invention uses company resources, the company gets the patent

• novel
• non-obvious
• useful(functional)

• not disclosed before; dippin' dots cannot apply for patent for its ball-shaped ice cream cuz it has been selling the ice cream before application
• not invented before
• substantially different from what is existing

• eg. change in size of an existing device
• substituing one material for another
• *subjective

• an idea
• laws of nature or naturally occurring substances

• genetically-re-engineered organisms
• computer software-the code is copyrighted and the algorithm is patented
• business model, eg. Reverse shopping at priceline.com, one-click shopping at Amazon

• Paris convention for the protection of industrial property-equaluty for foreign nationals and citizens with regard to patent rights
• Patent Cooperation Treaty-inventor can apply for patent in one country and delay filling for 2.5 years
• European Patent Convention-one filing

• document when the invention was made
• hire patent attorney
• conduct a patent search
• file an application
• obtain decision from us patent and trademark office

• pros: prevent competitors from infringing
• cons: may be invalid cuz applicant is likely to infringe on others' claims

obtain many patent for one product, eg. the Sensor razor of Gillette, prevent competitors from developing a competing product

• amazon vs barne&noble
• polariod vs kodak
• *punishment depends on whether the infringer know he is infringing

• a company that buys patents and used the threat of litigation to motivate infringers to license them
• NTP threaten RIM

• slow imitation
• foster company growth, eg. Qualcomm; licensing revenue
• facilitate the legal protection of intellectual property
• increase bargaining power over suppliers, eg. Nokia patents on speakers
• help new firms raise money

• not always effective at deterring imitation, competitors may invent around the patent
• gain may be greater by keeping it a trade secret since a patent only provides a 20 year protection
• pace of change may make patent irrelevant
• difficulty proving infringement

• artistic, literary or musical work
• whether it is artistic is irrelevant
• has to be recorded in some kind of medium

• copyrights are much easier to obtain
• less expensive form of protection

the author, unless the work is done for fire, then the copyright foes to the entity commissioning the work

• by putting the work in tangible form
• by registering the work at the copyright office(provides the right to sue for copyright infringement)

• protect the source code, object code, microcode, screen displays
• hard to enforce, hence dummy information is included to trace copiers

• technology makes it easy to infringe
• eg. Napter, Youtube are websites that allow sharing of music and videos
• recording device such as TiVo and XM Inno

• Coca-Cola formula
• KFC fried chicken recipe
• manufacturing process of drugs
• customer lists
• Google's page rank algorithm

• the secret cannot be patented
• market life of a product is longer than 20 years
• the patent would be hard to enforce
• the patent would be narorw

• reverse engineering is possible
• the market life of the product is close to 20 years
• the patent is easy to enforce
• the patent would be broad

• known only by people in the company
• have an economic value
• reasonable measures to keep the information a secret, eg. non-disclosure agreement and non-compete agreement

• signed by employees, investors etc. to prevent them from bringing IP to competitors
• exactly what info to be kept secret
• legitimate use of the information
• what must be done with any documents/materials transferred to the employee both during and after employment
• compensation for non-disclosure

• prevent employees from working for competitors
• compensation 
• eg. former employee in HSBC cannot work with CitiGroup

• devices that identify the provider of a product or service
• protect brand names

• words
• numbers and letters, eg. 23andme, 1800free411
• logos, eg Nike
• sounds, eg. hulu of Yahoo! and lion roar of MGM
• fragrances
• shape(protected by both patent and trademark)

• obtained by using the trademark or by registering with USPTO
• valid for 10 years
• registration allows the right to sue

• provide negative right, enforced through legal action
• difficult for startup to undertake against large companies
• although the court ruled in Chewy Vuitton's favor in the lawsuit between Louis Vuitton and Haute Diggity Dog, Walmart is pressured by LV to stop putting Chewy Vuitton on shelf

• requirement to manufacture in EU
• disclosure prior to one year or any disclosure

• The Berne Convention-minimum level of copyright protection
• The Madrid Protocol-covers trademark in 70 countries

• free-market approach; creative destruction; survival of the fittest
• State-sponsored approach; providing subsidies to solar power companies and not to wind power companies

achieve most efficient outcome in the long run

• uncertainty for a long period of time until creative destruction plays out
• other countries that follow state powered companies could lead to these companies dominating the market

• less uncertainty-government favors certain industries over others tilts the balance in their favor
• faster outcome

• bias the market
• creative destruction is compromised, only short term advantage 
• government decisions are unlikely to be as good at identifying efficient outcomes

• basic: increase the understanding of a topic without an immediate commercial application
• applied: meet a specific need

activities that apply knowledge to produce useful devices, materials, or processes

• useful innovations
• university collect royalties on inventions funded by taxpayer; rapid increase in establishment of technology transfer offices
• contribute to innovation through publication of research results

• own laboratories
• science parks and incubators
• grants for public or private organizations

in India genetic testing for the sex of the baby is forbidden to prevent infanticide

• best suited to idea generation
• foster creativity and experimentation

• better investment decisions and more efficient implementation
• enhance efficiency and coherence across R&D activities

• obtain financing 
• spread R&D over large volume
• economies of scale
• learning effect
• able to risk on large projects.eg Boeing can power aircraft-building projects

• lower R&D efficiency due to loss of managerial control; it becomes difficult to coordinate all part of the companies
• more bureaucratic inertia-good ideas get stuck in the middle of hierarchical structure
• more strategic committment tie firm to current technologies; Icarus paradox: that which you excel at can be your undoing; eg. Kodak thought films were far superior than digital cameras
• small firms more entrepreneurial

• reluctance to question the status quo
• overconfidence
• carelessness

• more reliant on skilled labor
• less concentrated
• young
• less captial intensive

• formalization
• standardization
• centralization

• the degree to which firms utilizes rules and procedures to structure the behavior of employees
• substitute for managerial oversight
• employees stunted by rules, the rigid structure may stifle creativity

• the degree to which activities are performed in a uniform manner
• facilitates smooth and reliable outcomes; eg. Dell reazlies PC will become commodity and that price is more important than product innovation, replicate optimal manufacturing model, more standardized, cut wastage in supply chain
• limit creativity and experimentation; employees not given automony on how to produce

• the degree to which decision-making authority is kept at top levels of the firm
• ensures project match firm-wide objectives
• avoid redundancy; 3M applied centralization to cut wasted resources
• maximize economies of scale

R&D activities are more market oriented, as employed by Microsoft

• high formalization and standardization
• good for operational efficiency, reliability
• minimize variation-ensure uniform high quality
• stifle creativity
• eg. Dell

• low formalization and standardization
• free flowing
• encourages creativity and experimentation
• may yield low consistency and reliability in manufacturing 
• eg. google

• some divisions organic while some are mechanistic
• GE-treat certain divisions as separate companies while R&D done on corporate level is shared across divisions
• Apple-set up organic divisions for new product development
• USA today-hire new people for online newspaper

• a new product development team that operates nearly autonomously, unhampered by bureaucracy, with considerable decentralization
• eg. several aircraft designs from Lockheed Martin's Advanced Development Program

• a network of loosely connected firms whose activities are not tightly integrated, who coordinate through shared objectives and standards
• pursue more flexible configurations
• lose control over the final product,eg. the 787 Dreamliner from Boeing has defect due to the battery it used, which was made in Japan