PRODUCT INNOVATION AND IMPERFECT COMPETITION IN THE ITALIAN FRUIT-DRINK INDUSTRY

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: (i) 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 (ii) demand pull only may be insufficient to trigger innovation: an efficient retailing system, costs of failure and production efficiency may influence the firm's strategic approach to innovation.


Issue Date:
2003
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/34298
Published in:
International Food and Agribusiness Management Review, Volume 06, Issue 1
Total Pages:
14




 Record created 2017-04-01, last modified 2017-08-25

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