Product Innovation And Imperfect Competition In The Italian Fruit-Drink Industry

Topics:
Product Development and Design
Tags:
Business Operations,
Research & Development,
Product Innovation,
Marketing Research,
Marketing,
Management,
Leadership,
Innovation,
Competitive Market,
Strategy
Source:
IAMA (International Food & Agribusiness Management Association)

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Overview: In this paper, the case of the Italian fruit-drink industry is presented to discuss the strategic issues of product-innovation in imperfectly competitive markets. In particular, three main topics are addressed: the incentives to the adoption of innovation-based strategies, R&D investments in imperfectly competitive markets and the role of vertical coordination. To address the topics, a brief description of the industry, a game-theory conceptual framework and a strategic analysis of the marketing channels are proposed. The major conclusions can be summarized as follows: product-innovation strategies are the result of an evaluation of the option value of the R&D investments, the risk of failure and competitors' strategies; and demand pull only may be insufficient to trigger innovation: an efficient retailing system, costs of failure and production efficiency.

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Format: PDF | Size: 332KB | Date: Aug 2003 | Pages: 14

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