Patents as a Competitive Advantage? Analysis of the German Watch Manufacturer Junghans

Abstract

This paper investigates the relevance of patents as a competitive advantage with regard to the luxury industry. Within the framework of an explorative research design, more than two thousand patents were analyzed, using the international patent classification (IPC) to cluster those patents. The analysis shows that the sole ownership of patents as a resource is not sufficient to achieve business success. In addition, the findings suggest a two-sided relevance of patents within the luxury goods industry as two main groups can be identified: First, traditional manufacturers focusing more on craftmanship, secrecy, and tradition than on novelties and patents. Second, large business groups and high technology businesses dominating the IPC group G04 and emphasizing on the latest technology as well as on patents. Furthermore, the internationalization is also reflected in the patent applications: European patents within category G04 have gained in importance over the last 20 years, while national patents have declined.