Many examples exist in which firms that developed groundbreaking new products that met customer needs failed to turn these products into profits. An often cited case is EMI's introduction of the computerized axial tomography (CAT) scanner (Martin, 1984). In 1972 EMI developed the first CAT scanner for generating cross-sectional views of the human body, considered by many to be the greatest advance in radiology since the discovery of X-rays in 1895. EMI started to successfully commercialize the product, but soon its competitor GE took over market leadership. Even though EMI developed the groundbreaking technology used in CAT scanners and was able to offer the first working product, it dropped out of the market completely after a few years. This famous case illustrates that firms have to excel in creating value—for example, by developing new technology that fits customer needs— as EMI did— as well as capturing value by translating created value into profits—as EMI failed to do—to be ultimately successful. How some firms manage to capture more value than others, even if on a par or at a disadvantage with created value, is a question central to practitioners and researchers in strategic management and innovation management. My dissertation addresses this question by empirically analyzing managerial challenges in capturing value.
KeywordsResearch Objective Strategic Management Innovation Management Discrete Choice Experiment Managerial Challenge
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