A demand‐based perspective on sustainable competitive advantage

Adner, Ron; Zemsky, Peter

doi:10.1002/smj.513

Cited by 349 publications

(262 citation statements)

References 26 publications

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“…Although both result in bottlenecks to value creation, they have opposite effects on the firm"s ability to capture value and create competitive advantage. This finding supports recent calls in the literature that argue for the importance of understanding the dynamics of value creation as a precursor to the analysis of value capture (e.g., Brandenburger and Stuart, 1996;Adner and Zemsky, 2006).…”

Section: Discussionsupporting

confidence: 87%

“…Brandenburger and Stuart, 1996;Adner and Zemsky, 2006); To the best of our knowledge, ours is the first study that operationalizes the environment in this way. By linking the flow of activities among partners to the distribution of innovation challenges across the ecosystem we shed light on a key mechanism 8 of joint value creation and contribute to the emerging literature on ecosystem strategy (e.g., Moore, 1996;Iansiti and Levien, 2004;Adner, 2006).…”

mentioning

confidence: 96%

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Value Creation in Innovation Ecosystems: How the Structure of Technological Interdependence Affects Firm Performance in New Technology Generations

2009

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The success of an innovating firm often depends on the efforts of other innovators in its environment. How do the challenges faced by external innovators affect the focal firm's outcomes? To address this question we first characterize the external environment according to the structure of interdependence. We follow the flow of inputs and outputs in the ecosystem to distinguish between upstream components that are bundled by the focal firm, and downstream complements that are bundled by the firm's customers. We hypothesize that the effects of external innovation challenges depend not only on their magnitude, but also on their location in the ecosystem relative to the focal firm. We identify a key asymmetry that results from the location of challenges relative to a focal firm-greater upstream innovation challenges in components enhance the benefits that accrue to technology leaders, while greater downstream innovation challenges in complements erode these benefits. We further propose that the effectiveness of vertical integration as a strategy to manage ecosystem interdependence increases over the course of the technology life cycle. We explore these arguments in the context of the global semiconductor lithography equipment industry from its emergence in 1962 to 2005 across nine distinct technology generations. We find strong empirical support for our framework. ABSTRACTThe success of an innovating firm often depends on the efforts of other innovators in its environment. How do the challenges faced by external innovators affect the focal firm"s outcomes? To address this question we first characterize the external environment according to the structure of interdependence. We follow the flow of inputs and outputs in the ecosystem to distinguish between upstream components that are bundled by the focal firm, and downstream complements that are bundled by the firm"s customers. We argue that the effect of external innovation challenges depends not only on their magnitude, but also on their location in the ecosystem relative to the focal firm -whereas greater innovation challenges in components enhances the benefits that accrue to technology leaders, greater innovation challenges in complements erodes these benefits. We further argue that the effectiveness of vertical integration as a strategy to manage ecosystem interdependence increases over the course of the technology life cycle. We explore these arguments in the context of the global semiconductor lithography industry from its emergence in 1962 to 2005 across nine distinct technology generations. We find strong support for our arguments.

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Section: Discussionsupporting

confidence: 87%

mentioning

confidence: 96%

Value Creation in Innovation Ecosystems: How the Structure of Technological Interdependence Affects Firm Performance in New Technology Generations

2009

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“…This is also consistent with Adner and Zemsky (2006) stating that in mature markets, when technological quality is already relatively high, users' marginal utilities from technological improvements decrease and firms' profits from vertical innovation shrink.…”

supporting

confidence: 89%

New product development and firm value in mobile handset production

Koski¹,

Kretschmer²

2010

Information Economics and Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.

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“…For example, a more dynamic environment may lower the value of firm specificity and resource heterogeneity through shortening the time in which human capital skills and capabilities add value (Adner and Zemsky, 2006;Miller and Shamsie, 1996). More crucially, proponents of RBV stress not only the importance of initial resource development and exploration, but also the imperatives of continuously maintaining and renewing existing resource, capabilities and knowledge bases in order to protect competitive advantage (Barney, 1991;Penrose, 1959;Kor and Mahoney, 2004).…”

Section: Discussionmentioning

confidence: 99%