INTELLECTUAL PROPERTY AND COMPETITITVE ADVANTAGE Rakesh Basant

Rakesh Basant/IIMA/IPadavntage2 Strategic Question  How to leverage IP to reduce costs, increase profitability and market share vis-à-vis your competitors?  To analyze this question, focus on  Conceptual building blocks for analysis  Key strategic issues for building competitiveness with IP  Firm perspective but implications for research labs, public/private

Rakesh Basant/IIMA/IPadavntage3 Expected Learning Points  Ownership of IP may be a necessary but not a sufficient condition for competitive advantage  IP needs to be seen in a larger context of corporate and technology strategies to derive maximum value  Importance of cross-functional groups to develop and commercialize IP  Broad framework for understanding the role of IP in enhancing competitiveness

Rakesh Basant/IIMA/IPadavntage4 Building Blocks  Intellectual property (IP) v/s Intellectual assets (IA)  Not all innovations are protected and all IP commercialized  Technology, an important element of intellectual assets  Knowledge embodied in product, process and practices  Codified v/s tacit knowledge

Rakesh Basant/IIMA/IPadavntage5 Building Blocks…..  Appropriability: Ability to appropriate benefits arising from IA  Perfect appropriability a misnomer  Technology imitation possibilities: complexity, cumulativeness, circumstantial specificity and tacitness  Practices tacit/cumulative - difficult to imitate  Sector specificity: chemicals v/s engineering, life cycle  IPR regime: laws and their implementation

Rakesh Basant/IIMA/IPadavntage6 Building Blocks…..  Product-Process-Practice linkages  Conventional technology/product life cycle (T/PLC) approach v/s simultaneous attention on product and process: sector specificity, T/PLC duration?  Issue of standards, design freedom (sector specific)  Breakthrough, platform, derivative projects

Rakesh Basant/IIMA/IPadavntage7 Building Blocks…..  Complementary Assets Required for Commercialization of IP  Complementary technologies  Manufacturing, Marketing, Distribution, After sales support  Customer relationships  Complementary intellectual property: Patents, trade secrets & brands?  Generic v/s Specialized:Irreversibility, commitment, contracting difficulties, lock-in

Rakesh Basant/IIMA/IPadavntage8 Key Strategic Issues for Competitive Advantage  How to access complementary assets?  The case of CAT scanner: EMI, GE, Johnson & Johnson  Role of various appropriability regimes, asset specificity etc  How to leverage the linkages between the 3Ps?  Get the linkages right, un-bundle to learn and develop capabilities  Avoid over the wall syndrome, participation of manufacturing/marketing in design process

Rakesh Basant/IIMA/IPadavntage9 Key Strategic Issues…..  How to leverage the linkages between the 3Ps...  Process development as an integral part of the product development process to become competitive  Lower manufacturing costs  Accelerated time to market, lead times  Rapid ramp-up  Faster introduction of new products

Rakesh Basant/IIMA/IPadavntage10 Key Strategic Issues…..  Process development as an integral part of the product development process…..  Enhanced product functionality and customer acceptance  Extended proprietary position: appropriability improves, process imitation more difficult and practice most difficult?  Issues of quality, delivery times, defect rates etc.  Role of process-practice interface

Rakesh Basant/IIMA/IPadavntage11 Key Strategic Issues…..  The need of linking the three Ps is very real because  Product Life Cycles are becoming shorter  Hard to manufacture product designs  Fragmented demanding markets  High costs of development  Implications for public sector labs?  Public-private partnership?

Rakesh Basant/IIMA/IPadavntage12 Key Strategic Issues…..  How to leverage the links among various IPRs?  Complementary IP on new features/process/ designs  Patent thickets  Patents/copyrights for software and trade dress for interface?  Combine trade secrets with patents and trademarks  Munificence of patented technology: strategic use for different products/sectors

Rakesh Basant/IIMA/IPadavntage13 Key Strategic Issues…..  How to produce a design that is closer to the customer?  Over the wall syndrome: R&D-Manufacturing- Marketing  How to exploit the relevance of tacit knowledge?  Links between codified & tacit knowledge: the 3 Ps, appropriability  Management of tacit knowledge critical: organizational practices to diffuse (share) - incentives, labour turnover

Rakesh Basant/IIMA/IPadavntage14 Thank You