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Commercializing user innovations by vertical diversification: The user-manufacturer innovator
Publikationstyp
Journal Article
Date Issued
2015-10-22
Sprache
English
Journal
Volume
45
Issue
1
Start Page
244
End Page
259
Citation
Research Policy 45 (1): 244-259 (2016-02-01)
Publisher DOI
Scopus ID
Publisher
Elsevier
This paper explores a pathway to commercializing user innovations hitherto not studied, namely, the vertical diversification of a user firm into an upstream industry supplying capital goods, and subsequent coexistence of user and manufacturing units. Such coexistence creates synergies regarding innovation, marketing, and financials. It enables the manufacturing unit to benefit from user innovations in its new product development, while the user unit profits from improved tools. Yet, selling the firm's own user innovations risks loss of the competitive advantage originating from use of these innovations. We employ case evidence from firms in the fields of foundation engineering, tunnel construction, tea-packaging, and geological surveying to derive a set of five propositions regarding the conditions under which user-manufacturer diversification is attractive and viable in the long run. These conditions relate to innovation, marketing, the organization, and financial aspects. Our study offers three contributions. We show how user entrepreneurship can originate from established corporations rather than from individual user innovators; we carve out factors that favor the move toward and the success of user-manufacturer diversification; and we link user innovation and corporate strategy by showing how user innovation can affect the boundaries of organizations.
Subjects
Case study
Commercialization of user innovations
User entrepreneurship
User innovation
Vertical diversification
DDC Class
330: Wirtschaft